Sun Life Financial Inc.

Good morning and welcome to the Sun Life Financial Q1 2020 What For conference call. My name is Gaylene and I will be your conference operator today. All lines have been placed on mute to prevent any background noise and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. The host of the call is David Garg. Senior Vice President, Capital Management and Investor Relations. Please go ahead, Mr. Garg.

Thank you and good morning, everyone. Welcome to Sun Life's earnings call for the first quarter of 2024. 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 call with opening remarks from Kevin Strain, President and Chief Executive Officer. Following Kevin, Tim Deacon, 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 are also 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 is noted in the slides, forward-looking statements may be rendered inaccurate by subsequent events. And with that, I'll now turn things over to Kevin.

Thanks, David, and good morning to everybody on the call. Turn to slide four. We continue to deliver on our client impact strategy during the first quarter as we build a leading asset management and insurance company. underlying earning results were mixed. Strong results in Asia and steady results in Canada and at MFS were offset by weaker performance in the US and at SLC. In Asia, individual protection underlying earnings grew 30%. Results were driven by strong sales in Hong Kong and international and a strong overall result in India. In the U.S., we underperformed this quarter as morbidity gains moderated towards pre-COVID levels in our health and risk solutions business, driven by rising U.S. healthcare utilization rates. Our U.S. dental business continued to experience negative impacts from the end of the public health emergency, driven by Medicaid member disenrollment and higher claims ratios on the remaining members. We are working with states to reprice our Medicaid business with 25% reprice during the quarter at levels consistent with our profitability goals and most of the remaining 75% to be repriced by the end of this year. We expect dental results will return to levels of profitability more consistent with our pricing targets and expect income levels for dental to be approximately $100 million U.S. for 2025. SLC management underlying earnings were impacted by seed mark-to-market losses. Overall, the alternatives business faces headwinds from higher interest rates, but we remain on track to achieve 2025 underlying earnings of $235 million. We experienced strong growth in insurance sales, CSM, and assets under management during the quarter. Individual protection sales were up nearly 50% year-over-year, largely driven by growth in Asia, with strong individual protection sales in Hong Kong. Asia was also a leading driver of Sun Life's new business, CSM, which reached $347 million this quarter, up 50% year-over-year, and contributed to Total Company CSM surpassing $12 billion at the end of the quarter. We continue to see growth in our asset management businesses, with Total Company AUM reaching an all-time high of $1.47 trillion this quarter, up 8% year-over-year, reflecting the continued strength of our asset management capabilities and market appreciation. We ended the quarter in a strong capital position, with a LICAT ratio of 148% at SLF. We also announced a 4% increase to our common share dividend and will continue our share buyback program in the second quarter, demonstrating our commitment to deploying capital efficiently. Overall, we continue to benefit from our diversified mix of businesses. taking advantage of macro trends like the emergence of the middle class and growing GDP in Asia, the increased demand for health products in Canada and the U.S., and the importance of having a broad set of global asset management capabilities from public equities and fixed income to alternatives to help meet client needs in a rapidly changing environment. Turning to slide five, this quarter we delivered on key business initiatives to drive our client impact strategy forward. In Canada, we made progress on several important initiatives. We've seen strong demand for the Canadian Dental Care Plan, with 1.7 million Canadians signing up by the end of April, and we are now successfully processing claims. This program allows us to play a critical role in improving oral health outcomes for Canadians, which we know impacts people's overall health. We also launched the Diabetes Care Program as part of our online Luminal Health Pharmacy app, This innovative signature solution helps plan members reach their diabetes goals and, where possible, reduce blood sugar levels and reduce medications. Our aim is to improve health outcomes for our clients and enhance the claims experience for our business. In the U.S., we are differentiating with the large employer group benefits market by offering HealthNavigator powered by PinnacleCare. This personal healthcare navigation and advisory service helps members get the medical diagnosis and access the right care for their specific needs. This service also improves health and productivity outcomes for employers. We're also leveraging our expertise on leave, absence management, and return to work services to offer family leave insurance in Alabama, Arkansas, Florida, Tennessee, and Texas. We are the first major group benefits provider to offer family leave insurance in these states, broadening members' access for paid leave to care for loved ones and giving employers the option to provide a valuable benefit to their employees more easily. Our growth in Hong Kong reflects the strength of our quality distribution channels. Hong Kong delivered strong individual protection sales this quarter, driven by our broker relationships, our bank insurance partnership with Dossing Bank, and the momentum with our agency teams. We're also realizing value from our strategic investments. India continues to be an important growth market for Sun Life Asia. We have thriving life and asset management business as part of our joint venture with the Adida Birla Group. This quarter, we sold 6.3% of our ownership interest in our asset management JV, unlocking a $98 million pre-tax gain and helping meet the 25% public ownership requirement of listed companies in India. Since the initial IPO in 2021, Sun Life has generated pre-tax gains of over $450 million while still retaining 30.2% ownership of the listed entity. In the U.S., our health and risk solutions business is finding that generative AI can securely summarize and organize lengthy and complex medical records for pinnacle care clients. This solution is expected to reduce turnaround time from 14 days to one day, unlocking greater capacity to serve more clients. In our Sun Life global investments business, we're using a generative AI chatbot that creates better client experience by providing faster responses to clients on questions for segregated fund topics. We're embracing our responsibility to create a more sustainable and brighter future. Sustainability is critical to our purpose, and we're focused on increasing financial security, fostering healthier lives, and advancing sustainable investing. SLC management continues to invest in assets that generate a stable and attractive yield, and generate a positive environmental impact. This quarter, BGO completed Ontario's first all-electric, net-zero carbon industrial building, owned by Sun Life, a milestone in our efforts to achieve net-zero greenhouse gas emissions in investments and operations by 2050. BGO was also awarded the 2024 Energy Star Partner of the Year Sustained Excellence Award for the 14th consecutive year. Also, Infrared Capital Partners, our infrastructure investment manager, continues to invest in assets that are helping to build a sustainable future. Infrared acquired a portfolio of two operating utility-scale renewable energy assets in the U.S. In closing, we're confident in the resilience of our strategy, driven by our diversified business mix, our people and culture, and our sustained commitment to living on our purpose, to help clients achieve lifetime sense of security and live healthier lives. And now I'd like to welcome our new CFO, Tim Deacon, to his first earnings call. Tim joined Sun Life in April and brings extensive experience in asset management, wealth, insurance, real estate, and sustainability, all areas that are critical to Sun Life. He's a great addition to our Sun Life executive team and has fit in so seamlessly that in many ways it feels like he's been here for years. With that, I'll turn the call over to Tim to detail our first quarter financials.