Sun Life 2010 Annual Report Download - page 55

In 2011, we will continue to launch innovative and customer focused products reflecting each market’s specific and evolving needs
over time. We will also enhance and diversify distribution management, implementing best practices in such areas as agency
recruitment and training, and further expanding alternative channels such as bancassurance and telemarketing. Continued
enhancement of risk management and operational efficiency will also remain a priority to further streamline the operations and enhance
the platform that supports future growth across the region.
Corporate
Our Corporate segment includes the results of SLF U.K. and Corporate Support operations that include the Company’s reinsurance
businesses as well as investment income, expenses, capital and other items not allocated to Sun Life Financial’s other business
segments.
Our reinsurance businesses consist of life reinsurance and run-off reinsurance. On December 31, 2010, we sold our life reinsurance
business. This business consisted primarily of reinsurance of individual life, with additional coverage including critical illness, group,
corporate-owned life insurance, and longevity. Our run-off reinsurance business is a closed block of reinsurance assumed from other
insurers. Coverage includes individual disability income, long-term care, group long-term disability and personal accident & medical on
the health side, as well as guaranteed minimum income and death benefit coverage.
Financial and Business Results
Summary Statement of Operations
($ millions) 2010 2009 2008
Premiums 841 849 851
Net investment income 995 504 1,056
Fee income 93 34 33
Total revenue(1) 1,929 1,387 1,940
Client disbursements and change in actuarial liabilities 1,288 1,231 1,138
Commissions and other expenses 398 280 87
Income taxes (5) (108) (285)
Non-controlling interests in net income of subsidiaries 1–1
Dividends paid to preferred shareholders 93 79 70
Common shareholders’ net income 154 (95) 929
Special items(2) –27 (825)
Operating earnings 154 (68) 104
(1) Including consolidation adjustments related to activities between segments.
(2) See Non-GAAP Financial Measures.
Net income for the twelve months ended December 31, 2010 in
the Corporate segment was $154 million compared to a loss of
$95 million for the same period last year. In Corporate Support,
losses for 2010 were $37 million, compared to $64 million in
2009. Losses were lower in 2010 primarily due to improved
results in the run-off reinsurance business and the favourable
impact of tax benefits in Corporate Support, partially offset by
investment gains which favourably impacted results in 2009.
Results for 2009 also included restructuring charges to improve
operational efficiency.
Corporate Support 720 (64) (37)
SLF U.K. 209 (31) 191
Common Shareholders’ Net Income by Business Unit
($ millions)
2008 20102009
SLF U.K.
SLF U.K. has approximately 1 million in-force life and pension policies, which constitute a run-off block of business. While our U.K.
operations supported the capability to sell new business, we refocused our approach in 2010 to focus solely on providing products and
services to existing customers. Most administrative functions have been outsourced to external service providers, which are managed
by an in-house management team.
For the year ended December 31, 2010, SLF U.K. reported net income of $191 million compared with a loss of $31 million in 2009.
Earnings in SLF U.K. were higher in 2010 largely as a result of the favourable impact of the Lincoln U.K. acquisition and a tax benefit
associated with a favourable judgment received by the Company.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2010 51