Sun Life Financial Inc.

The transaction also supports growth in our asset management businesses. On close, Sun Life will release capital held for the life and pension business. We estimate a LICAP benefit of 1% to 2% associated with the capital release. However, the final amount will be determined on close. Sun Life will continue to maintain our economic interest in the UK payout annuities business. This block of business has an attractive risk-reward profile with strong ROE and cash flows and has been optimally structured from a Sun Life capital perspective. We expect that this business will generate approximately $30 million of annual underlying net income after the transaction closes in the first half of 2023. I want to take this opportunity to thank our team in the UK for their passion and dedication to Sun Life. An important part of our decision-making process included finding a company where our UK employees could continue to grow and develop their careers, and we believe we have done so with Phoenix. Turning to slide five, we provide an overview of our second quarter financial highlights. Our diversified business mix continues to demonstrate resilience and strength. Reported net income of $785 million was down 13% year-over-year, predominantly driven by market impacts. Underlying net income of $892 million was up modestly. Manjit will discuss the quarterly financials in more detail. Overall, we saw good growth across the business despite challenging conditions. Canada had a strong quarter as disability results improved. The U.S. was also strong as COVID mortality impacts moderated, and we added approximately U.S. $10 million in earnings in the U.S. for DentaQuest. This happened after the close on June 1st. These positives offset lower fee income at MFS driven by equity markets and a relatively in-line quarter in Asia as COVID-related restrictions continue to impact the Hong Kong business. Capital also remains solid in the quarter with 128% LICAT for SLF and 124% for SLA. Slide 6 highlights several strategic initiatives from the quarter that support our client impact strategy. This quarter, we expanded our commitment to sustainability as SLC Management's fixed income business signed up to the Net Zero Asset Managers Initiative, joining previous commitments made by other SLC affiliates, including Bento Green Oak, BGO, and Infrared. In Malaysia, we launched the first Sharia-compliant, investment-linked, tackleful ESG fund. The fund provides an affordable and accessible avenue for clients to embed ESG factors in their investments. As part of distribution excellence, we renewed our bank insurance partnership in the Philippines with RCBC, one of the country's leading commercial banks. The partnership was renewed for an additional 10 years and will continue to provide RCBC clients with access to financial protection products. We also saw another quarter of strong momentum at SLC Management, with capital raising of $5.7 billion in the quarter. We're seeing good traction across all asset classes offered through our diverse alternative investments platform, including BGO, where investors are pivoting to debt secure by real estate to provide protection against current economic conditions. And our position as a trusted brand was recognized this past quarter by Corporate Nights magazine, which once again included Sun Life on its list of the best 50 corporate citizens in Canada. We have appeared on the annual ranking for 17 years, And the 2022 edition ranks us 21st overall, driven in part by strong scores on executive gender diversity, board racial diversity, and sustainability linked to executive pay. Slide seven provides highlights on our digital leadership. By focusing on digital priorities and continuing to develop our operating model, we are making great progress in our digital journey. In Canada, our digital coach, Ella, continues to help clients make better decisions. driving year-to-date increases in both wealth deposits and insurance coverage, which were up 14% and 64%, respectively, from prior year. We're also making excellent progress in the U.S., with 76% of claims submitted digitally in the quarter. And in Asia, we saw a significant increase in digital submissions of new business applications, up 13% over the prior year. I'm also excited to welcome Chris Way to Sun Life, as our Executive Vice President and Chief Client and Innovation Officer reporting to me. Chris joins our executive team in this new global cross-enterprise role, leading Sun Life's commitment to client experience excellence. Chris will be responsible for identifying and cultivating innovative solutions focused on achieving our purpose, including establishing measurable targets while maximizing our impact to foster a sustainable society and healthier planet. He will lead our sustainability, global marketing, and corporate communications functions. Chris brings more than 25 years of global leadership experience in insurance and wealth management, and we're excited to have his depth of knowledge and experience on our team. With that, I'll hand the call over to Dan to discuss the close of DentiQuest. We are excited to have DentiQuest join the Sun Life family.

Thanks, Kevin. I'm pleased to provide an update today on DentiQuest since closing the acquisition on June 1st. With the addition of DentalQuest, Sun Life is now the second largest dental benefits provider in the U.S. by membership, and we now serve more than 50 million Americans across all of our benefits products. Combined, we expect to generate more than $7 billion in total annual U.S. benefits revenues as one of the largest providers of specialty benefits in the U.S. Over the past decade, we have transformed the U.S. business from a mostly retail individual life and annuities business to a high-performing, market-leading benefits business. The DentaQuest acquisition continues this evolution, changing the footprint of our business in the U.S. into a larger, more healthcare-focused organization, now with more than 70% of our benefits revenue coming from healthcare. These changes have transitioned Sun Life U.S. from a capital-intensive to a capital-light business with strong cash flow generation, from businesses with long-term risk profiles to mostly short-term risk and fee-based businesses, from slow-growth markets to higher-growth markets, and from ROEs in the single digits to a return on tangible equity in the high teens. The DentaQuest acquisition adds a large and growing business that aligns strongly with our risk and return profile and advances our business strategy to be a leader in health and benefits. Together, we will do even more to provide great oral health care to all and to help people live healthier lives. We welcomed 2,400 DentaQuest employees to the Sun Life family on June 1st. The leadership team for the dental business is in place, consisting of a blend of DentaQuest and Sun Life leaders, and is focused on growth strategies, revenue synergies, and optimizing performance. We're approaching integration with GreatCare, And our goal is to realize the full potential of the transaction for all our stakeholders, including providing enhanced offerings for clients, delivering on our accretion and cost savings targets for shareholders, creating new opportunities for our employees, and delivering a positive integration experience for all. We have a strong track record of successfully integrating group benefits businesses while minimizing disruption for our clients. Many of the leaders who manage the Assurant integration are involved in the DentaQuest integration. We are focused on integration activities that will support our run rate cost savings target of US $60 million by 2024. We're off to a strong start with a fully integrated leadership team, engaged employees, and a detailed plan for the remaining steps. This quarter, we began reporting separately on the performance of our dental business, which includes DentaQuest, both the government and commercial segments, and the existing Sun Life U.S. dental and vision business. The second quarter includes one month of results for Dentiquest and three months of the legacy Sun Life dental and vision results. I'm excited about the future at Sun Life U.S. We now have four strong businesses with market-leading positions in dental and stop-loss and a top-ten employee benefits business. Although recent results have been somewhat masked by COVID impacts, Once this subsides, we remain confident in achieving our medium-term targets for the U.S., including 10% or more earnings growth for our benefits businesses. At this time, I'd like to turn the call over to Manjit.

Thank you, Dan, and good morning, everyone. Slide 11 provides an overview of our second quarter results. The results reflect the strength of our business fundamentals and the benefits of our diversified business mix amidst a challenging operating environment. Reported net income in the quarter was $785 million, down 13%, primarily driven by lower equity markets. Underlying net income of $892 million and underlying earnings per share of $1.52 were up 1% from the prior year. Good insurance sales, moderating COVID impacts, strong credit results, one month of earnings in the DentaQuest acquisition, and disciplined expense management helped to offset lower asset management results. Underlying return on equity was 14.9% in the quarter. Book value per share was up 6% over the prior year. And excluding the impacts and other comprehensive income, book value per share was up 10%. We continue to maintain a solid capital position with like-out ratios of 128% at SLF and 124% at SLA. The decline in the SLF ratio from last quarter primarily reflects the closing of the Dentiquest acquisition and market impacts in the quarter. Now, let's turn to our business group performance starting on slide 13 with MFS. MFS reported net income of U.S. $228 million, up 19% from the prior year, reflecting fair value changes and outstanding share-based payment awards. Underlying net income was down 17%, driven by lower average net assets in line with year-over-year declines in global equity markets. MFS generated a pre-tax net operating margin of 36%. Operating margin declined by 3 percentage points from the prior quarter due to lower average net assets partially offset by lower variable compensation. AUM was down 13% from Q1 to US$553 billion, largely reflecting lower equity markets and US$5.5 billion of net outflows. Net outflows in the quarter were driven by U.S. retail, reflecting significant industry-wide retail redemptions. In fact, Q2 reflected the highest level of U.S. retail industry redemptions in over 30 years. That said, MFS saw lower relative retail redemptions as a proportion of AUM compared to the industry. Institutional inflows were U.S. 1.5 billion in the quarter. Turning to slide 14, SLC management delivered another solid quarter with a reported net income of $5 million and underlying net income of $23 million. Underlying net income reflected strong growth in fee-related earnings, partially offset by real estate investment mark-to-market losses. Fee-related earnings were up 13% from the prior year, reflecting strong capital-raising activity and the deployment of capital into fee-earning AUM over the past 12 months. The fee-related earnings margin of 23% was down modestly due to continued investments in business growth. Strong capital raising of $5.7 billion a quarter reflects the diversification of our investments platform, with positive momentum across all investment strategies. Total AUM includes $21 billion that is not yet earning fees. Once invested, these assets can generate annualized fee revenue of more than $175 million. On slide 15, Canada's reported net income of $160 million was down from the prior year, mainly due to market-related impacts. Underlying net income of $344 million was up 19% from the prior year, underpinned by good business growth and favorable mortality, morbidity, and credit experience. This quarter's results also includes higher large-case group benefit sales in Sun Life Health and solid growth in third-party insurance sales. While sales were supported by higher large-case mandates in group retirement and defined benefit solutions, partially offset by lower industry-wide retail mutual fund sales. Turning to slide 16, U.S. reported income of U.S. $167 million was up 31% from the prior year, reflecting real estate gains. Underlying net income of U.S. $121 million was up from U.S. $93 million in the prior quarter, reflecting one month of earnings from DentaQuest and more normalized group life mortality. Group life mortality significantly improved in Q2, in line with improvements in the overall population. We also saw some moderation in the favorable stop-loss morbidity experience in the quarter, but inpatient utilization remains below pre-COVID levels. Our U.S. business continues to demonstrate strong core fundamentals with solid growth in premiums and fee income, good client persistency, and benefits from investments in Pinnacle Care and Dentequest. Slide 17 outlines Asia's results for the quarter. Reported net income was $131 million, down 8% from the prior year in constant currency. Underlying net income of $148 million was down modestly on a constant currency basis. Second quarter results were impacted by lower sales in Hong Kong driven by pandemic-related restrictions and lower equity market-related fee income. This is mostly offset by higher new business gains in our international high net worth business, and while international sales were lower than the prior year, profitability of sales is up as we focus on selective origination in the high net worth market. Outside of Hong Kong and international, insurance sales grew double digits in the rest of our markets as they emerged from pandemic restrictions. Asia wealth sales were lower than prior year, reflecting declines in global equity markets. Overall, we're pleased with our results this quarter. Sun Life's attractive mix of diversified businesses once again allowed us to deliver good performance in a challenging operating environment. The fundamentals of our business remain strong, and we are continuing to invest to drive future growth. And the investments we have made in recent transactions, including in SLC management, DentaQuest, and bank insurance in Asia, are performing well and contributing to results. With that, I'll turn the call back to Nhi for Q&A.