Sun Life Financial Inc.

Good morning, ladies and gentlemen. My name is Adam, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Sun Life Financial Q1 2021 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. The host of the call is Yaniv Bitton, Vice President, Head of Investor Relations and Capital Markets. Please go ahead, Mr. Bitton.

Thank you, Adam, and good morning, everyone. Welcome to Sun Life's earnings call for the first quarter of 2021. Our earnings release and the slides for today's call are available on the investor relations section of our website at sunlife.com. We will begin today's presentation with an overview of the first quarter results by Dean Connor, Chief Executive Officer of Sun Life. Following Dean's remarks, Manjit Singh, Executive Vice President and Chief Financial Officer, will present the financial results for the quarter. After the prepared remarks, we will move to the question and answer portion of the call. Other members of management will also be available to answer your questions this morning. Turning to slide two, I draw your attention to the cautionary language regarding the use of forward-looking statements and non-IFRS financial measures, which form part of today's remarks. As noted in the slides, forward-looking statements may be rendered inaccurate by subsequent events. And with that, I'll now turn things over to Dean.

Thanks, Yaniv, and good morning, everyone. Let me start by saying we're thinking about our friends, colleagues, clients, and their families in India as the country faces this most extraordinary wave of infections. While our India employees have been working from home since the start of the pandemic, we know that this has been a very difficult time for all of them. We're working with our local teams and health officials to provide additional care and support for our people. We made a donation to India Red Cross and supporting local charities to help vulnerable people with some of the basics, such as groceries. More broadly, while we're not on the other side of this pandemic yet, there is every reason to be optimistic as the rollout of vaccines builds momentum around the world. Turning to slide four, reported net income of $937 million for the first quarter was up significantly over the prior year on favorable market-related impacts. Underlying net income grew by 10% to $850 million, and underlying earnings per share grew 11% over the first quarter of last year. We generated a strong underlying return on equity of 15.3% in the quarter. Our capital and cash positions continue to remain healthy, and along with a low financial leverage ratio of 22.7%, provide flexibility and opportunities for capital deployment. I want to step back for a moment on the quarter's results and talk about something that has been a long-time priority for Sun Life, and that is sustainability. Our approach to sustainability focuses on what we know best, financial security, healthier lives, and sustainable investing, and we're embedding that into our business. For example, in February, we announced the creation of 34 affordable housing units in as part of a new 300-plus unit apartment building we're finishing in the Regent Park neighborhood of Toronto. In partnership with Daniels Group and the City of Toronto, these 34 apartments will be leased at roughly half the going market rents through a program that helps homeless or inadequately housed single mothers to achieve lasting economic self-sufficiency. And if you own one of our Sun Life participating whole life policies, you'll be glad to know that your PAR fund owns a significant share of this new building. In March, we set a goal of making an additional $20 billion in new sustainable investments over the next five years across our general account and third-party investments, and that's in addition to the $60 billion of existing sustainable investments. And starting this year, business operations around the world for Sun Life and MFS will be carbon neutral. You'll be hearing more from us on how Sun Life is making a difference on sustainability for our clients, our employees, our communities, and future generations. Coming back to the quarter's financial results, wealth sales and asset management growth flows were up 10%, driven by strong growth sales at SLC Management and higher wealth sales in Asia over the first quarter last year. We ended the quarter with $1.3 trillion in assets under management, up 26% over prior year. MFS continued to deliver strong long-term investment performance, with 97%, 84%, and 95% of MFS's U.S. retail mutual fund assets ranked in the top half of their Morningstar categories based on 10-, 5-, and 3-year performance, respectively. Individual insurance sales grew 12% over prior year, with 27% growth in Canada and and 12% growth in Asia on a constant currency basis. Total insurance sales were down 6% compared to last year as our group business in Canada continued to see fewer large cases coming to the market during the pandemic. In April, we announced our intention to acquire Pinnacle Care, a leading U.S. healthcare navigation and medical intelligence provider, which will become part of our U.S. stop-loss and health business. This acquisition, which we expect to close later this year, changes stop-loss in health from a business that reimburses employers after an employee's care has occurred to one that gets us involved through pinnacle care right from initial diagnosis. This should lead to better health outcomes and better cost management, including lower stop-loss claims for our clients. These new capabilities are exactly in line with our purpose of helping clients live healthier lives. Turning to slide five, we continue on the journey of accelerating everything digital, driven by our purpose, empowered with an unrelenting focus on clients. This quarter was no exception. In Canada, our digital coach, Ella, continues to connect with our clients, helping them save for their future and ensure protection for their loved ones. We're making it easier for clients to do business with us, holding over 61,000 virtual events advisor client calls in the first quarter, a big jump compared to the 5,000 we held in Q1 of last year. This quarter, we used e-signatures in Canada for over 85,000 transactions, and that compares to 14,000 in the same period last year. In April, we launched Stitch in select U.S. states. Stitch is an innovative supplemental health offering that enabling members to buy coverage directly from Sun Life online through their worksite benefits program at any time. This is an important offering as it allows members to take their insurance with them even if they leave the company and will also protect part-time and gig workers who typically are not eligible for employee benefits. We've also made great progress in Asia where 66% of new insurance applications were submitted via an electronic application and an increase of 14 percentage points over the fourth quarter of 2020. We also introduced new digital personal accident and cancer products in collaboration with one of our bank assurance partners in Vietnam to help our clients when they need us the most. These digital products offer a seamless experience to purchase coverage entirely online and receive policies in just minutes via straight-through processing. In the Philippines, we launched a premier digital on-demand wellness platform to help clients focus on their health. The platform, which is called GoWell Studio, offers a variety of features, including virtual exercise programs, guided meditation, and healthcare awareness content. So Sun Life is off to a strong start in 2021 with double-digit earnings growth, a strong ROE, and a strong balance sheet with ample flexibility. As we look ahead, we are well positioned to benefit from an expanding U.S. economy, the growth in Asia driven by its compelling demographics, and strong momentum in Sun Life Canada. Asset management, as you know, is a large part of our business, and we're well positioned in MFS, SLC management, and our other managers as clients seek positive alpha in this lower return world. And our insurance businesses are well positioned to do more for clients whose awareness of and need for protection has been reinforced by this pandemic. I'm now pleased to introduce our new CFO, Manjit Singh, who joins Sun Life in March. Manjit brings a wealth of knowledge, including 20 years of experience at one of Canada's largest financial institutions. We're thrilled to have Manjit on board, and he'll take us through the first quarter results. Kevin Strain is also here today and will be available with us for the Q&A portion of our call this morning. And now I will turn things over to Manjit.