Sun Life 2015 Annual Report Download - page 41

Sales in International in 2015 were US$511 million, a decrease of 46% compared to 2014. Life sales were US$61 million, a
decrease of 37%, reflecting our more selective approach to pricing. International wealth sales were US$450 million in 2015 compared
to US$849 million in 2014.
In-force Management
SLF U.S.’s closed block of individual life insurance products consists of approximately 128,000 policies, primarily participating whole
life and term insurance. Our In-force Management operations are focused on optimizing profitability and capital efficiency while
continuing to provide high-quality service for customers.
In-force Management’s reported net income and operating net income were US$84 million in 2015, compared to US$199 million in
2014. The reduction in net income mainly reflects the impact of actuarial assumption updates and management actions. Net income in
2015 included the net adverse impact of actuarial assumption updates and management actions compared to the positive impact of
actuarial assumption updates related to the release of a future funding cost liability, and economic reinvestment assumptions and
future mortality improvement assumptions changes in 2014. As well, results in 2015 reflected positive credit experience, net realized
gains on the sale of AFS assets, the positive impact of changes in interest rates and credit spreads, a change to post-retirement benefit
liabilities, and favourable tax items related to prior years, partially offset by unfavourable mortality and policyholder behaviour
experience. Net income in 2014 also reflected net realized gains on the sale of AFS assets, and other experience items, partially offset
by the impact of decreased interest rates and unfavourable mortality.
2016 Outlook and Priorities
SLF U.S. will continue to focus on achieving sustainable, profitable growth by becoming a leading provider of U.S. group benefits and
driving growth in the international high net worth life insurance market. Successfully integrating Assurant EB will be a key priority for us
over the next two to three years.
In the United States, health care reform is expected to increase the need for medical stop-loss coverage as more employers decide to
self-insure, accelerate growth in voluntary benefits as employers’ costs continue to rise and as employees become more accustomed
to purchasing their own benefits, and expand the distribution landscape for supplemental insurance products. The international high net
worth market is growing, partially driven by the increasing population of affluent citizens leading global lifestyles as well as increasing
demand for trusted financial protection and wealth transfer products.
SLF U.S. will leverage the capabilities we have built over the past several years and will acquire through the Assurant EB transaction,
to drive sustainable growth and focus on enhancing profitability by executing the following components of our strategy:
• Driving growth in stop-loss by continuing to leverage our market-leading expertise, expanding distribution, developing differentiated
products and services, and capitalizing on new market opportunities.
• Continuing to execute recent pricing and expense actions, investing in service and claims operations, and leveraging new
capabilities from Assurant EB to enhance the performance of the group disability, dental and life insurance businesses.
• Continuing to leverage and invest in our Group Benefits large case capabilities, including the Sun Life Center for Healthy Work and
integrated absence management offerings.
• Capitalizing on the strong voluntary capabilities that Assurant EB will deliver after the acquisition closes, with a particular emphasis
on the broad product portfolio and enrolment solutions.
• Building market share in International by improving the customer experience and enhancing our life insurance products and
capabilities.
• Continuing to seek opportunities to optimize the In-force Management business through effective risk and capital management
while continuing to serve our customers.
SLF Asset Management
Business Profile
SLF Asset Management is our asset management segment composed of MFS and SLIM.
MFS is a premier global asset management firm with investment offices in Boston, Hong Kong, London, Mexico City, Sao Paulo,
Singapore, Sydney, Tokyo and Toronto, which offers a comprehensive selection of financial products and services. Drawing on an
investment heritage that emphasizes collaboration and integrity, MFS actively manages assets for retail and institutional investors
around the world through mutual and commingled funds, separately managed accounts, institutional products and retirement
strategies.
SLIM is an institutional investment management business and has operations based in the U.S. and Canada. SLIM delivers
customized fixed income solutions, including liability-driven investing, and a suite of alternative, yield-oriented asset classes, including
private fixed income, real estate, and commercial mortgages.
Strategy
The SLF Asset Management strategy is to design and deliver investment products through MFS and SLIM, that will deliver growth in
traditional active asset management as well as liability-driven investing and alternative asset classes.
MFS continually strives to deliver superior investment performance and distinctive service to its retail and institutional clients. The core
tenets of MFS’s investment approach are integrated research, global collaboration and active risk management. MFS also seeks to
deepen relationships to become a trusted client partner.
SLIM designs and delivers investment solutions for institutional investors through a comprehensive set of asset management
capabilities that allow clients with liability streams to meet their investment objectives through customized fixed income portfolios and
alternative asset classes.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2015 39