Sun Life Financial Inc.

Good morning and welcome to the Sun Life Financial Q2 2024 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 second 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 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 everyone on the call. I hope you're all having a great summer. Turning to slide four, we delivered strong second quarter results with a record $1 billion in underlying net income representing 9% growth over the prior year underscoring the strength of our diversified business strategy and our commitment to drive growth and deliver long-term value for our clients and our shareholders. Our results this quarter were driven by strong individual protection sales in Canada and Asia, while U.S. group benefits continues to perform well. Our wealth and asset management businesses saw good earnings momentum on increased assets under management. Strong individual protection sales for the quarter were driven by stronger sales from both SLFD and our third-party channel in Canada, strong momentum from our bank assurance partnership in Hong Kong, and our joint venture sales in India. Strong individual and group protection sales drove our new business CSM growth, which was up 62% year-over-year. Wealth and asset management results were lifted by higher fee income from MFS. We are also pleased to have executed the largest transaction in the Canadian pension risk transfer market by a single insurer, representing a $1.2 billion institutional sale in our defined benefits solution business. Our underlying earnings were partially offset by continued headwinds in our U.S. dental business. Most of the Medicaid dental business is being repriced during 2024, and as we reprice, we are seeing increased premium rates more consistent with our expectations. As a result, we continue to expect underlying earnings levels from dental to be approximately 100 million U.S. dollars for 2025. MFS continues to experience net outflows this quarter at 14.8 billion U.S. dollars. This was driven by secular shifts from active to passive, public to privates and alternatives, as well as cyclical impacts of investors remaining on the sideline given the high interest rates. We are confident in the actions that MFS is taking to address these challenges, including building out their retail capabilities, focus on meeting their clients' needs and a diverse range of investment products, including active ETFs and separately managed accounts. Our asset management and wealth pillars continue to have strong fundamentals, with total SLF assets under management now $1.47 trillion, up 7% over last year. Reported earnings were lower than underlying earnings, primarily due to market-related impacts driven by the restructuring charge and real estate. Real estate continued to experience headwinds consistent with the overall industry environment. In the quarter, we took a restructuring charge related to expense reductions, and we expect over $200 million of pre-tax savings to be delivered by 2026. Expense initiatives ensure that we stay efficient and competitive, helping us deliver on our purpose by aligning resources. Finally, we continue to maintain a strong capital position, reflecting our disciplined financial management and emphasis on capital-light businesses. Underlying ROE for the quarter of 18.1% is in line with our medium-term financial objectives, where our LICAT ratio at SLF remains strong at 150%. Turning to slide five, this quarter we delivered on several key business initiatives that helped drive our client impact strategy forward. We continued to progress on our digital and innovation capabilities to support client health and financial security. We are scaling generative AI across Sun Life with thousands of Sun Lifers involved in more than 20 experiments to optimize, automate, and transform client experiences. In the U.S., the dental team is using generative AI to help Sun Life improve accuracy and make quicker recommendations. We also expanded our partnership with GoodPath in the U.S., offering disability members virtual care to help them better look after their physical and mental health. In Vietnam, a new point of sale platform allows agents to provide a digitally enhanced client onboarding experience. This platform enables enhanced needs analysis in addition to a faster paperless application with 98% of applicants enrolled within one business day. In Canada, we introduced Sun Life Term Insurance for Diabetes, a first-of-its-kind insurance solution designed to empower Canadians living with diabetes to make health and financial decisions on their terms. Recognizing the unique challenges of this condition, this product offers a higher chance of approval compared to conventional life insurance, more affordable premiums, and access to a customized care plan. These capabilities and offerings reinforce our commitment to finding new and innovative ways to deliver on our purpose. Turning to asset management, we continue to strengthen our position as a market leader. This quarter, SLC Management unveiled SLC Global Insurance Group, A dedicated team focused on serving the complex needs of the world's leading insurance companies with bespoke solutions. Our deep insurance heritage, combined with our diverse suite of investment capabilities, has allowed us to create a differentiated and tailored experience for clients. SLC also launched the Scotia Private Real Estate Fund, distributed through Scotia Bank. Powered by BGO's deep real estate investment capabilities, this new product will give investors an opportunity to diversify their private real estate assets that offer attractive, income-focused returns while hedging against inflation. SLC has grown tremendously since its inception over a decade ago. To support our plan for SLC's continued growth, I'm pleased to announce that Steve Peacher, President, SLC, has been appointed to Executive Chair, SLC Management, Sonny Kelsey, co-CEO of BGO, has been appointed to President and CEO of SLC. Sonny will continue to spend the substantial majority of his time as co-CEO of BGO in partnership with John Caravelle. Steve will partner with Sonny and the leaders across the SLC group of companies to help set the future strategic direction of the firm with a focus on combining the strength of its global platform to benefit new and existing clients. Additionally, Steve will continue to have oversight of the firm's businesses, with a particular focus on leading the growth of SLC fixed income and driving the firm's high net worth strategy. This announcement, along with Jack Parris' appointment as Chief Executive Officer of Infrared last July, and Chris Wright's appointment as President of Crescent Capital Group this year, lays the foundation for SLC's leadership for many years into the future. We also completed our third sustainability bond offering, issuing $750 million. In line with our sustainability bond framework, the proceeds from this bond offering will help fund green and social projects that support the health of communities, such as investments in hospitals, long-term care, and emergency shelters. Finally, we continue to be recognized for our commitment to drive meaningful, positive impacts for our clients, society, and the environment. was selected by Corporate Knights as being one of the 50 best corporate citizens in Canada for the 19th time. In closing, we had a strong quarter against our medium-term objectives with underlying EPS growth of 10% and an ROE of 18.1%. We also ended the quarter in a strong capital position with a LICAT ratio of 150% and have announced our intention to renew our normal course issuer bid to purchase up to 15 million common shares subject to regulatory approval. We are confident in the resilience of our strategy, our focus on execution, and our sustained commitment to deliver on our purpose. With that, I will turn the call over to Tim, who will walk us through the second quarter financial results.