Sun Life Financial (SLF) 4 Aug 222022 Q2 Earnings call transcript

Welcome to Sun Life's Earnings Call for the Second Quarter of 2022. My name is Yaniv Bitton, and I will be the host for the call today.

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, Dan Fishbein, President of Sun Life U.S., will provide an update on the DentaQuest acquisition. President results Financial for Vice present will Executive financial the the Singh, and Officer, Chief then Manjit quarter. After move the call. to will the question-and-answer prepared portion of remarks, we the your also available will management of morning. members to Other answer questions this be

attention remarks. to language the statements non-IFRS regarding Turning form which forward-looking cautionary financial of to measures, draw use part two. I and slide your the of today's

Kevin. events. turn forward-looking in may be to subsequent the things by now I'll slides, statements And noted that, As inaccurate with over rendered

Thanks, everyone. Yaniv, morning, and good

Before running closed closed this Phoenix our a businesses, to the which and Pension announced They of block and getting long-term and been run the business, the for and is confident I the discuss of client relate want in the economics will Group transaction retirement has to the to Life life morning XXXX. quarter, have to approximately expertise agreement we savings deliver The provider. largest U.K. exceptional $XXX U.K.'s U.K. business they close earlier to service. pension Phoenix sell we're million. and to block our since scale as

provider. billion in under for next December over alternative public had material Phoenix, as to will a As with as five in to will U.K. American the part behalf partnership also Phoenix. a tailwinds. over approximately businesses preferred on will supporting North focus to of strong our track opportunity for billion transaction through Life Phoenix the in of It's to LICAT SLC XXX% that’s our and release. assets we with AUA natural less Phoenix They XX, both held increased long-term has $X of management partners asset close, $XX last capital-intensive private strategic business. The aligned with into enter businesses. billion in management goal five GBPXXX years. on XXXX, the an become life strategy to the In transaction, and of benefit exciting as also at organic to years us management continue MFS We growth. associated approximately become to alone, a their growth inorganic manage X% fixed the with pension general their asset account growth. a and over record in markets capital Sun investments well the administration capital On income invest and release X% supports will estimate

This the determined structured maintain close. optimally However, annuities payout the business. with continue business and flows final has strong an risk/reward will attractive U.K. will Life amount block Sun interest economic Life Sun been on capital and perspective. be has of in to our a cash ROE from profile

that the in we this U.K. thank grow passion Life process in our underlying have first to to their their done I believe of will closes for business to and careers, XXXX. finding decision-making want $XX of our half We part transaction income team of million could a the annual generate important with expect after dedication continue this net approximately develop an our take company where and the and we so opportunity to Phoenix. Sun employees included U.K.

provide five. quarter highlights. an of our financial overview We Turning slide second to

approximately demonstrate and had Underlying was quarter improved. despite more detail. offset growth a impacts positives modestly. resilience after Reported continue we business. year-over-year, predominantly net financials $XX conditions. mortality in the the Capital for will across by equity million restrictions the as client COVID mix in Slide X. $XXX up income of was earnings lower fee COVID-related driven results down Canada disability million good challenging that markets in with The as business in U.S. and MFS, U.S. strategic Hong in as diversified saw solid strong $XXX happened also quarter we highlights moderated, quarterly relatively Overall, This DentaQuest. added for impact impacts. a XX% the business Asia initiatives on impact income also strong at in-line was the to discuss Our Manjit the the income million continues and driven These strength. close of six net to our remained by quarter SLF Kong several strategy. support XXX% and from quarter XXX% for SLA. LICAT June market

fixed launched and accessible we to factors Malaysia, ESG SLC business to Asset provides other commitment including In Zero up for management's embed signed clients Takaful affiliates fund. quarter, investment-linked Infrared. in the initiative, made The and sustainability investments. as This fund BGO Managers joining their we Net by to avenue income the our first Sharia-compliant commitments affordable expanded SLC BentallGreenOak, an ESG previous

part to continue access As in clients to The commercial products. RCBC leading banks. we of provide will years excellence, partnership bancassurance renewed our RCBC, with distribution Philippines an financial for with of XX additional renewed country's the and the one protection was partnership

saw another quarter SLC our strong capital secured position investment on quarter the across past alternative Sun $X.X including by once where which to recognized trusted a Corporate was BGO, platform, current the estate good We're provide classes corporate Life in in are best Magazine, raising seeing management conditions. to of protection as our real also economic list against We all with by pivoting diverse Canada. momentum Knights investors quarter. XX included traction citizens brand its again this of asset debt And billion at of offered through

that, in client be to impact to coverage, to communications year. society in strong responsible establishing We functions. digital sustainability including the journey. achieving Sun leading maximizing on we brings will foster provides continuing depth racial I'm model, knowledge will leadership. cross-enterprise diversity priorities in call commitment of discuss He executive with have a Life's year. also innovative and Chris Life our team. were XX% coach, annual have new healthier digital highlights respectively, prior deposits on focused decisions, make better and our hand more Wei board continues and targets while new role, also of XX% and our and solutions up our up With executive of both insurance overall, to on leadership marketing by purpose, develop our and in which the President and we our Chris I'll our excellence. operating sustainable pay. Ella, Slide Sun digital our for diversity, XX to in By over making general to excited appeared on and experience submitted a seven Vice excited Innovation we're global global to XX% XX experience welcome linked making to increases experience And cultivating sustainability, progress his identifying over the We're claims XX%, Chief and the joins year-to-date Officer, ranks significant years and wealth clients executive help In me. Dan prior focusing digital Asia, insurance to the and edition driving ranking on applications, from and scores great of in our to XXXX submissions Chris team Executive planet. are global in Client Chris our Canada, to in the the on and management, driven close saw business digital XXst digitally increase in U.S. for measurable years lead progress excellent than quarter. wealth us corporate this as DentaQuest. part of reporting

to have We Life's are Sun excited the DentaQuest join family.

since X. the I'm on today acquisition on pleased to June DentaQuest Kevin. Thanks, closing provide an update

we is than now as Life XX Sun the DentaQuest, of largest all in in benefits annual we our now benefits addition Americans benefits the of more the more serve products. Combined, total dental billion than U.S. in provider With membership, the generate $X benefits specialty by providers million to the of and across largest revenues one second expect of U.S. U.S.

the we from flow on will to now Life oral leadership X,XXX DentaQuest lives. and retail the to experience transformed annuities have We life the delivering the for risk business. strongly all from on to into leaders the even to a higher is business These aligns our a fee-based targets potential healthier savings and offerings advances for in profiles live we high-performing and equity benefits and delivering transitioned family and help business health care-focused larger, large place, including our growth synergies risk mostly accretion shareholders, more a cash care, markets leader health approaching U.S. to slow-growth in capital-intensive markets of this and to a opportunities Together, our our and stakeholders, transaction than businesses from a be Life dental individual provide and on strategy ROEs creating have continues the teens. health mostly decade, return goal and short-term from June acquisition revenue high past to profile footprint tangible Sun DentaQuest employees changing performance. strategies, businesses, care. more X. benefits. for Life realize in more the with business our the a to to our Sun welcomed integration clients new on The XX% benefits positive that providing The changes the enhanced cost care capital-light to long-term DentaQuest for a from with and of from team is digits of in all a all. people employees business focused a U.S. to great return and our consisting growth health optimizing coming strong We're market-leading DentaQuest full integration in is of business U.S. business risk great The do and blend adds generation, revenue for for growing evolution, and business the with of organization Sun a acquisition Over single with and our with

the strong who for group of integration are of businesses have in Many the We leaders minimizing benefits while successfully manage clients. Assurant involved integrating DentaQuest the our integration. a record track disruption

of We're for are by off employees to the and a leadership will that engaged savings We fully remaining steps. $XX start our XXXX. integration focused cost rate detailed support million a team, integrated target run with plan a strong on activities

quarter, DentaQuest, business. U.S. and and Dental commercial Dental performance This and Life the of Sun Vision reporting business, the separately we our existing segments includes on the both began which government

Sun and excited businesses for Life of results. market-leading XX now and and legacy The stop-loss with months second have in the Dental We Vision strong quarter employee DentaQuest Life Sun business. dental I'm U.S. three results about top future four one positions the a at includes and of month benefits

once recent achieving call this At businesses. have more time, our results subsides, remain medium-term this COVID earnings the turn XX% impacts, for our like including we I'd the targets been benefits to masked Although or U.S., by confident for somewhat in Manjit. growth over to

Reported from the XX provides equity earnings from second strong X% and up quarter Good excluding million value the quarter of overview sales, in a up the by challenging Slide X% income our everyone. the markets. per Thank management driven on one per the amidst $X.XX expense year. down strength per quarter. diversified COVID our environment. you, credit insurance of impacts, moderating million, Underlying was of asset up earnings the underlying morning, to primarily an Book of net book was $XXX management was return share XX%, disciplined And Underlying in year. fundamentals Dan, results DentaQuest offset results, reflect results. operating were lower of $XXX acquisition of lower and and helped other good prior share month business business income, comprehensive results. prior was The net share our benefits XX.X% value the in impacts XX%. income mix equity the and over

ratios acquisition impacts SLF market the SLA. capital LICAT maintain with the to in quarter. XXX% in DentaQuest and of at ratio solid from quarter a at closing decline primarily the We of the continue last position SLF XXX% The reflects and

by quarter equity retail, Now declines prior MFS outstanding reflecting performance global the offset payment margin markets. and income year-over-year U.S. operating net our business share-based XX% average $X.X driven was assets, billion pretax slide to average QX was to from with $XXX income net up year, changes to assets, billion lower generated net significant XX%, margin driven partially XX%.Operating Net from in declined net let's lower compensation. in of fair X lower on reported reflecting line retail redemptions. and with were outflows from Underlying down largely down AUM $XXX the of by outflows. markets of awards. turn reflecting industry-wide in percentage the net value points lower million, prior MFS MFS. net starting group by variable XX quarter a due XX% by equity

of MFS the redemptions XX quarter. Institutional years. to retail said, as In redemptions saw relative fact, the inflows level over billion compared U.S. in a That highest proportion $X.X were QX reflected lower of in industry. retail industry the AUM

prior all strategies. investments of diversification not assets earning yet XX% another reflected the were capital raising modestly can investments AUM strong Canada's earnings, growth. and the Strong underpinned Turning reflecting of activity net platform, XX% credit partially over was down reported revenue the raising growth fees. Total in to XX of income million up the from of Once is favorable slide business losses. income investment with million investment generate months. from reported with into up $XXX XX. fee that than real million. $XX experience. SLC of to of On billion market-related was net capital margin income solid the net morbidity positive deployment more prior Management billion of the by XX% and income The fee-related $XXX year, was net in earnings from year, $X delivered and of momentum invested, AUM slide million. strong fee-earning across reflects business prior continued down annualized these good net growth earnings mainly by quarter $XXX million mortality, of XX, quarter offset the income impacts. $XX includes capital Underlying and Fee-related due fee-related estate in our Underlying underlying year, to mark-to-market past due $X.X

higher third-party This include in group quarter's large also and benefit Sun Health solid insurance Life sales. case sales growth in results

While mutual supported Defined retail in offset and case large partially lower fund sales mandates higher were by Solutions, Group Retirement industry-wide Benefit sales. by

reported quarter, from $XXX U.S. up XX. XX% of QX, life mortality significantly month income of Underlying year, $XX with reflecting prior and slide in was of estate group up gains. $XXX reflecting to normalized prior million earnings from population. Turning DentaQuest one the overall in improved real income was more net from million million line improvements the the in mortality. Group life in

the but utilization We the quarter, also remains stop-loss below pre-COVID in experience moderation morbidity inpatient saw levels. some in favorable

solid good core DentaQuest. Asia's with growth in U.S. income, demonstrate business to continues from premiums strong and persistency Care Our Slide $XXX X% constant down net Underlying Reported quarter. year from was currency basis. prior income constant million and investments Pinnacle million, in fundamentals in client and net was results a modestly $XXX for benefits the outlines down currency. fee the income XX on of

in International, emerge origination profitability worth of digits year, rest the in restrictions. focus restrictions by impacted as than net pandemic-related worth in sales up double and international driven new they sales higher our high Kong pandemic in gains prior the business were of results high quarter we lower the international market-related is Second sales on of Hong Kong, fee market. while lower business equity selective as Outside from and sales Hong is markets by our and grew insurance This net income. offset by lower were mostly

were Q&A. Asia transactions, future we for I'll mix declines global DentaQuest are prior Overall, investments call quarter. us performing we're our wealth markets. reflecting in contributing to diversified to than fundamentals allowed our And businesses back including are sales Sun Bancassurance this With remain have made lower of once performance Life's the in business Yaniv drive in and action challenging results and good turn to to year, continuing with deliver a of we equity The strong. growth. Management, environment. SLC pleased recent results. operating attractive again Asia And to the invest well an that, in

to ask to have you limit an any I with opportunity ask that you, ensure now Manjit, to two morning. Operator questions all to questions then to or I additional this participants. questions. would yourselves of one our Thank ask participants the pull help and the re-queue will

Thank you.

Please begin Grauman, [Operator first will Scotiabank. the Meny question now go We The session ahead from question-and-answer comes Instructions]

I'm to a -- is this like Asia. about COVID improvement we the behind, and Question it morning. U.S., COVID in and good looks restrictions beyond but factor persistent looks looks North restrictions? so in in but Asia, seeing be going this continue we in change the or what then the is any COVID-related saw like Hi, what be issue Kong. that, over quarter, even material outlook a like Hong COVID-related saw wondering It QX, it you do you're putting Or to in expect the future? foreseeable far America

just than up other question. of COVID Kong I've of for touring four the And Hong of Thank Asia. you Asia weeks actually opening markets our some Johnson almost policy. restrictive sees from rest Asia almost it India much actually went facing nicely, is very the China. Ingrid exactly The measures net and to and right. whereas spent all as still really is it's zero It’s

And Chief that at see under that also principally sales in our being virtually it there the Executive evaluated, write However, the business. able a competitors and new borders zero being uncertain. do through that you're our is that we that's a $X tight closed implication on MCV very of with billion, was the into flow sales versus weighting was correct, to and XXXX, and high

Kong. making take not seeing that's quarters needs change. increased no domestically So to sure ease. GDP. contraction this we're positioned restrictions Two doubt we sure business as the that we We're in but a when, of There's of build advantage preparing to and really are Hong competition great

anything adjust make policy ongoing any to continues, can are If business? that the changes that there reality? zero So to you're COVID to policy -- you zero contemplating

the faced felt we've also volatility globally. Importantly, been that's market

with overall third So a our strong position. we of NPS two terms in flows, have position we're very number still

got business continue. [indiscernible] also the good we're has and momentum. well And we insurer with is business very the positioned will So wealth very that that in strong

with that with Life want Kong. positioning we're well global our feel to Sun offerings positioned we in Hong strengthen our that we So

some So that be do will And medium-term well we we're to take Kong cautiously XX%. of point, and and we positioned Hong actually emerge at committed our we believe to optimistic, objective that. remain will of advantage

that. it. Appreciate Got

comes The from ahead. next question go MacKinnon, Please BMO. Tom

DentaQuest very it much earnings be second is share good the And the might quarter. respect one a and you Yeah. Thank that with morning. that in DentaQuest, you had With able that the to underlying us to in follow-up. possible month it have I contributed

the underlying in earnings U.S. is This the one Dan dollars, Tom. Sure, DentaQuest million. $XX Fishbein. month for was In

That's respect is then great. with to And Thanks. the corporate. follow-up Okay.

that It assume trend. underlying year-over-year. significantly I wondering earnings might of how an was Just from loss million, $XX debt. higher increased that's

bit how the lose wondering trend you going might So that block annual another U.K. close then be the until -- sell you when think close U.K. well? the block there. would would Thanks. block? forward million a in Just of of that little the -- and in earnings, of that the I color the $XX happens, just as until And corporate

Good you they morning, Tom, quarter-to-quarter. earnings, as a little know, around corporate it's number Manjit. do bit of included Yes, the so move factors, a

favorable corporate we quarter, largely did experience, expense the benefit from segment. This in

million and And -- the would on million in business we we that's be that that's then And results. -- decline our to once that forward, your slides, the is -- $XX see closes, an the that a you quarter's $XX for in going point, what's we sold. in would mentioned the So number this you basis. reflected annual would transaction outlined CoC about

that mentioned And excess investment does after had right. capital change this of dividends $X that before at you business That's with about divestiture? in billion the generate annually, you think that all I and

divestiture. that with changes don't I No, the think materially

use freeing know, a generate earnings. are the part obviously, as million number. $XX you additional As And is we said, capital relatively the that capital of up and to we'll as we transaction, small

Kevin. it's Tom, And

of that we also get and some of strategic stream that of income sort with a billion Of the entered next will an course, five to North the up partnership the asset management that we we've Phoenix, will good deploy provide chunk make will planning management over into American lost $XX years space, the revenue. a and expect they're

combination, capital the get think, management back a good are to I agreement and support in So the earnings. deploying the we asset also

do you much to on get $XX in that billion how And of expect -- Okay. terms

emerge years. It's over sort might the you five five to of next going over years. the And pieces would say emerge even it

will talked fixed income You can Steve mixture -- what the be a from expect we to his alternatives. This public about management. look of alternative in slides asset

a for is a piece we that up to There's say what hard will be. But that chunk the you bringing have you and see this make have expect exactly closed what And fiduciary remember, a in fact, of will time responsibility lost. block. it's will we've the So a and line process good to them they other is on. emerge, earnings

sold, whereas and five expect life annuity we we're decline the seven an the fairly we going was be that to from paid cash that significantly perspective. pension next over we to For earnings expect keeping, business that, stable flow quite perspective business that years, the and to

for Thanks that. Okay.

next The Please question Canaccord Genuity. comes from Chan with ahead. go Scott

actually impact follow-up Good $XXX to morning. what looking like or DentaQuest. seasonal but any is of million month, we're is there Dan, on is Tom rate annual business for? a kind run it's I that My a on question one know

trend. Yes. month Good that is caution would not a necessarily morning. I one

accretion we're that. margins than when June certainly, June And projections think for up so We always we higher would perhaps tricky. we overall, the revenues. small by confident made a higher we us the make more but in I were the confidence month results lower expected is in little least little did announced first made gives the prior support and the variance than that margins a projections. say What little in is at our one the this can revenues, But multiplying comment in see we XX would a still transaction, I and is in month

that deal not I substantially Or and quick you seems that math, and is the a power month that it than earnings it your risk accretion lower first just is to if EPS the some take case? annualize announced do And just could and targets? when be

actually number The case. we not bit number. to the than a that's little accretion lower target a would the June translate announced No,

Thank Got Okay. you. it.

with Doug from comes Capital Please Markets. question next go The Young Desjardins ahead.

and look group Dan, I plus. in potential morning. the were insurance know you there's takes U.S. And underlying of down earnings Good X% the puts business flesh out takes and ultimately, you're been know but hoping business, targeting Hi. I'm just we on when some here, year-over-year, out. and know know I that. those at Envision margin X.X%. puts LTM has was stripped I I can

it's that the So not wondering, target comparable. U.S. a for you just I'm there margin is insurance really business group new for us? can share with

Okay.

questions few there. a So

The benefits first on compared earnings group quarter same one year. the earnings last the the to or group of

Your And as there to outsized driver continue observation the And is, they were year. really stop-loss this stop-loss had year last second is quarter obviously, biggest correct. strong that results. last just we have the outsized quarter, as in that results in not quarter we very of

quarter. We less prior last this it we and had to quarter was year, also compared in the strong quarter certainly strong long-term a disability, very in

drivers those the primary So there. are

margin, four of a metric. we remember report months In rolling the XX terms quarters or that rolling

compared So you're very The here a quarter again, seeing what partly strong, last back quarters. quarter was current quite year. strong although, several is actually to looking

swapped So strong very quite quarter that metric that's improve for quarter out very over year. four But a a not this strong obviously, time. will, we actually a as quarter

if very businesses. in than the the was, margins, comparison included have we in be we've or relatively a would less big much in especially capital combination think small we In is group -- and ROEs dental terms because have because obviously, very, high businesses. other low part about businesses business, not require competitively It and best the very that they margin that's part of DentaQuest, margin they past. that other target, now with really Dental a to way concluded group the of of dental the very

is report But remains which So our same likely target margin to other it the remaining we're business, going for for X% or group dental as use has the that. more. separately and metrics been,

group Like down moving life shift? When is you the see health that And business? Health just and and a to is from that there it stop group has benefit on coming stop life the X.X% in up loss a it about Or been follow-up. getting and loss? back on above where -- more think life still you Or do up? the is change X% X%,

and Stop-loss group No. below. still still is above is

certainly impacts incidence COVID in there are has While the business. dramatically, improved still COVID

over quite we You that down that on see a still some up disability. past a we of long-term life four group especially moderate. delays there's in as favorability mortality But hand, little gradually the would of bit But drift stop-loss go even in the impacts disability bit there's -- of -- see to from group quarters, the Certainly, would there. and some -- a as other little COVID the expect fade back in care may away.

sale the the Okay. we And on Kevin, business. the second, I just U.K. of guess question why was annuity retain the

on the from you to life perspective, play a build-out to what on? But what this a longevity offset us you of focused And capital, can want business? acquisition an when are And is you that. little you insurance deploying focused keep also covered about bit are think remind you you about I think the on?

Doug. Thanks, Yes.

we pattern bit business even or very it's more that XXX% about of risk come a you actually like business, than And So we've maybe but our for earnings. the years XXX% and cash And is almost the over optimized to a see good that IFRS-XX, a back earnings XX ROE. under profile flow, it got the the slight book. next growing in

it. it helps of thre structure like we the profile. medium-term our objectives. all like of We the risk So And

on while. supporting to put more Or disposition it against strategy? Of our we've with deployed Is adding add accretive? we're And out? when past at. our thinking transaction? it we've adding Is over growth? can So Does We're -- getting we're flow an the that's about we the execute it is helping strategy cash all capital three medium-term little course, acquisition we looking M&A, of it? what broadly are objective of that or looking helping it scale? objectives? those is importantly, does earnings our the acquisition? capabilities? in Is our Is fit at So it it either ROE then on it And out adding the

talk Asia. now the the bancassurance Dan heard seen in the SLC You've businesses of and about but benefits you've DentaQuest, adding

it's the things. execute So our we Are objectives to meeting medium-term strategy? those about and integration? really Are we our adding on can we

Thank you.

The Financial. Dechaine, ahead. Please National Gabriel next from question Bank comes go

Just hard follow-up -- of U.K. the What's business? underlying it's the retained a earnings Just on to

It about Gabe that would the $XX my be remarks. -- during approximately talked during opening I million the

or material still a much trends more $XX correct? side reserve the look it's the not have that mortality on million, continue, the you Is releases potential future. way, also but in at other

I'll Kevin reserve but speak basis. the is maybe to and the $XX to IFRS-XX releases, -- million an under it's ask

Hi, Kevin experience of Morrissey. retained reasons one the why this Yes, has term on it's over block the it. business. been we of It's good Gabe, our long quite

there's of little we We there, risk the cash and the kind business and have of managing coming that. sophisticated investment the very residual like of profile, mentioned, of methods as the of risk out very kind Kevin net flows and

business well. potential is there upside that yes, certainly as So on some

that anymore. mill don't one a of the you, well, in charge big reserve they're your for booked risk life -- guarantee big think business selling got U.S. last I line I While -- the Kevin, insurers lapse

you there runoff You've the Is years for would got reserving confident more over it loss -- you block. those are believe I or those been identifying reserve in levels? on have trends? your on proactive

Gabriel. right, That's Yes.

the and updates recent the reviews got sure most assumption been that very on -- to up and you make that that right focus experience. annually we've know, to to we're keen As make experience

fully the We've been that since line last So last report spirits been that then. in year, update. strengthen. Happy monitoring to that last with that we changed year, since did has

don't quarters, looking over we several assumption to any and the further the anticipate lapse on good block. that last changes certainly So

deployed deploy that's one last asked potential if What's but on the quick yes, capital not that. $XX billion the me line been you investment the attach time -- the And SLC, already, revenue capital? to or Perfect. the has -- expect yet been to and forgive this the

question. Yes. business. Gabriel, it's Yes, billion the the Steve of billion investment alternative that Peacher. reflects Thanks $XX $XX the nature -- for

and institutions the in we gets it's we In have In and funds cases, capital you'd general, earn and the on commitments it gets in and don't commitments. those many But our deployed. across businesses, by product. it a in alternative So fees we as investment fees estate on cases, -- real three-year some cases, gets just draw it most earn raised window credit until deployed. we infrastructure the closed-end committed

So toward some investment would the raised. money those just would some be of of be commitments the we end period,

would average I X.X years. that year, get on next the expect . raised over money to So

the because their these also at sixth say Now are that have some the end in seventh life the or mode. time, of you are I and a the the at would that series same are of in series, funds funds in cases, that disposition

off. I always investing, so rolling average over should say, years. would new $XX to the you're next you're on invested get some billion year, are And But question, raising funds, your that X.X

Okay. rest Thank enjoy you. the your And of summer.

The next TD Mendonca Please ahead. Mario with from go comes Securities. question

QX to if pretty I more charge negative big the experience? underlying just everyone. Can And ask can meaningful And morning, in that that QX XX There's is how say, relative what Good move get like want QX to moved way really a from from, QX. how different XX QX. me And through to experience, to truly a think which mortality the in in also I'm a just experience, approach that other for the different this morbidity just portion policyholder of actually and it what from underlying reflects on of lines, gain of results? much trying shift to of you better to QX? extent a I and is, expectations appreciation help is just about little a

different much I is and of How how but much change, appreciate really its QX? with actual expectations the this. it going I'm a of think you were for where

I Kevin. might actually it's step in here,

or about I part think that we And well. of have then the might Dan some should mortality Jacques piece. wrap to the or experience talk come Mario, a was because the in have experience disability we if to big U.S. you significant Dan, was should I And still end. back disability a at change. And on because I think the open then about that as Manjit either want touch talk Canada, can Kevin up, items also

the the management there. on quarter. in can particularly business, first -- in-force of quick just was a very during Yes, as the mortality, Dan. is business. business group couple you We claims there change, legacy a life comment individual the We big This in Sure. actually life large see had a

business. the bit COVID actually lessening in well prior as big the sequentially, QX but in went of the and little from the But to quarter mortality a compared as to change the volatility the that So that's other really that at QX. way, nature a great was least the just quarter -- year the prior

declined experience first quarter the COVID quarter. Our actually XX% second to mortality from the by

in and actually mortality driver in seeing there biggest little blends that's between change very in So second first U.S. expectations. big experience. That the would was change change there. quarter a It the that quarter, very was there. be from not a the slowly It very you're

Jacques?

experience the components The Jacques. that before, key are long but Canada few cases Mario, the other talked durations there. in about work. morbidity, group the how is there of before Health. volume a we is or I've One to in by Dan. And back or go get. is incidence material short in driven Thanks, people is one this is disability are mostly change the Sun Life this

positive increases have mind and both experience We in in in price XXXX, Mario, and starting Keep block, putting impacting. also started that's the also, incidents we duration. that through

data cautious example. QX point be trend. a to influence experienced have of There's declare I one quarter. hard would that new a at good So it's incidents, this to because we a say for of lot being things stage, this

quarters the we've in We're you as area in that's but had strong and focus driver know, closely, of the Canada. main a we're as now, watching continuing number that. of it So

in the that again. have headwinds I a and for can in you're us of these would comparative It's Kevin that items see been say both Mario, quarters in about, so you talking that a in seeing. And U.S. taking way of XXX the the of actions a answered big case lot those the U.S., the and X,XXX business negative day been that the I the in you're is to management then we're think change rates death a and had the day. talked running case close particular, place to about a deaths of and COVID sort in XXX were QX. and at where to in morbidity Jacques roughly in And the are, question. now think, they disproportionate COVID I Jacques QX getting in COVID a us And mortality, we impacts,

Yes.

questioning or positive this respect. in I and Was sort of expenses this or a side quarter, real that the in management expense expectations I change a line -- well resulted as XX%. any a turned The final that less that driver, would in understand about less as think actual management big expectations. well. now action the sorry, I change gain? that's were about not that actions Perhaps of changes imagine

Manjit. The couple Yes. elements in around Mario. Hi, of actions. It's there. think Yes, I one management element a there's is

As always focus keen you We're focus. know, keeping had very on that we've discipline. expense a

given seen of element businesses obviously, of share-based productivity compensation And impact the second slightly of our in the that sort All resulting lower our we there's downward of in that's thought. markets, that. businesses. driving inside are some is, focused than their plans, on of expense And expenses the we've moves

those of So things. it's a combination two

billion service I thing. that just contract the maybe it right? I in this memory, service And it to margin, If think I'm -- contract one just Okay. is margin? doing is $X.X Is or -- then we by think or was the go could guiding billion final $X.X $X company billion

billion equity $X.X our shareholders' X/X/XX. on was the The adjustment to

you too did us service saying most guiding X.X%? Would -- much service you're reading say to I And sorry. to the establishing maybe of Or I be related margin? contract the that I be that that? am correct am margins should not contract I'm in into

Yes.

the the the elements gave liabilities, There's is about on which said in adjustment is you equity provided the and also another two-thirds which spoke I a how which contract contract our we yet. equity, the present part call two there's of shareholders' adjustment we element we the be One margin. result in would change XX, service haven't information to think of related to that we margin. I service the May to about --

Okay.

true? that than contract service less margin Is the $X.X billion. So in fact could be

that, the $X.X Well, but we of say billion. haven't said it's going . would sort be more I than to

Okay. Got it. Thank you.

question ahead. next David from ISI. comes with Please go The Evercore Motemaden

similar the that? a retaining there didn't as on Or Phoenix Hi. with it the Thanks. question retained. Could some it past? was something would the Difficulty] are describe, transaction business why [Technical morning. a I be [Technical that retaining you color guess, that sell to just could Difficulty] just consider, bit in I on annuity business maybe didn't U.K. on Good you that you something opposed something the made the on just about helpful. Is had you is business, why exploring that

business this sort and structure. of to David, optimized business has been our capital our

coming and risk If that you -- as are And Kevin the it cash as in. the I like of earnings said, off like we it. flow well we fits ROE and profile, earlier, said

The was good a -- also we we than it transaction, were the agreement, management on sold. very it we and as we from sell. got, overall doing rather believe, keep we Phoenix price effective getting we'd decided one So asset didn't parts that an the impact us

was driving So able this keep we than be were it more actually to and quite pleased us to Phoenix. that

plus. would thing if comments given how Yes. business, the returns add, the on I other look this structured, at And about it we XX% we Kevin's is

the on So happy we're with we're getting returns business. that very

doing Okay. terms in getting a with on just maybe Has was that asset on U.K. something Does a something initiative like and business. strategic of the didn't that or one-off to a business? more it Phoenix or the in think in-force guys strategic U.S. Great. then to And with management that transaction that were this that really maybe did changed? you step starting you about back, more just is focused past, management had in-force offloading think agreement? the of Or rush get taking sound this the do to in potentially broader guys on a something management more you the trying are in I

David, it's Kevin again.

decline. to our like looked in flow you SLC. the asset management the we you like scale. at flow in to start and to the the that to we And some we and business it to again, out start We cash XXXX, bought earnings to ROE cash gives decline business, supports business. U.S., and asset like If sold, pension the that were lack provide closed income expecting the life at coming In right? point, IFM business out, also and we of us So coming It profile. management that

we so that's a And positive. think

business profile cash So a in in out flow the the like point is like payout it. and U.S. earnings time, of the bit this We coming at would ROE. the We the say that the IFM the I business and like

we're thinking And how that's that. about so

asset watch, these companies a are blocks of flow. that management cash closed for the number buying there's you If

so cash strategic well. flow . us for And that provide to back that's as to SLC

it. Got

Okay. That make sense. Thank you.

next comes The CIBC. question ahead. from Holden go Paul Please with

you us. there you've growth you're to lot to rate want maybe Maybe higher a year, been in some rate I sort stop dynamics pushing morning. to that us don't to of it's today can get there's the just those the of maybe for of the go little suggest going moving the back extent be the that which growth there's group growing factors in loss, Or through? the that because excited, bit pieces targeting over business. last a And too Good organic just price been XX%, could suggest term? Is mentioned U.S. a Hi. XX% be given to talk increases than would less X.X business through would than near that you years. XX% anything

I'm always -- future so excited Well, Sure. optimist. an the about and

the have DentaQuest rose Care, premium year. without XX% by of fee U.S. and in even that Pinnacle the So the past you addition may and noticed the revenue of

It's its very Their us rapid growth, So growth been generating It's we're large, something all. well. should very, smaller for over bit and new business large. had little caution very into has history. growth. very DentaQuest but translate earnings times as is that number, of there. a very organic Contracts significant of engine growth are lumpy. clearly a A in

on win of may just contracts. will from contracts, a between and a in to of capabilities show a there's expand new some So they fronts to which DentaQuest new legacy big well. think and But business three with make them, where and then adding government to really our DentaQuest lot times as in contracts there to is area in for their capabilities first-class be together in dental growth to be to those relatively continue advantage, potential Medicaid, multiple commercial dramatic two Medicare there pauses the we put significantly business

growing can of at do business for a seen industry can COVID, And that So been several we for what as good very we We're lots have leader grow we come optimism at also, Stop you've there. out the loss good as business. a years, group pace. has very in the pace. of

that As noticed, probably you've business several really of grow the after being years relatively organically. started flat, X.X to past has it years,

I number. in confident upside. always And XX% we're think there's certainly, So the

Roberge. I Mike quiet a I'll for great. have pretty question And a on been ask Okay. That's things think Thank MFS. you.

wonder So the rebalancing impact. quarter. we if that's just flows I positive saw institutional this

past, that markets. You've the opposite equity way it the talked usually worked with in about higher

clients more if wondering or was institutional adding just more So or if equity rebalancing it? really, guess, something taking it's I to portfolio there

morning. Mike. is Good This

lumpy, and be in tend the somewhat think that there were just I number of funded institutional to a the do quarter. wins flows

in fund quarter. we they Some opportunities, of client that and would But to level lined it I at particular just where have up the was well rebalancing. particular been think activity with those happen that

flows. that's drove. That's institutional of the So color what the behind really sort

future? you give where I things sense us in there then might the pipeline just can follow-up. any And the Okay. given is mean, today land current quick and

out. Yes. mean like. that to on be expect say the institutional they're looks and like of we what pipeline we don't think relatively what lumpy are comment the what I we the All looks is on would based mandates future flows and clients doing size putting quarter-to-quarter I

I'm not forecast. So comfortable giving a

Okay. Had try. to

Okay. you. Thank

it. Appreciate Thanks.

Please question Next Nigel from go D'Souza Research. ahead. Investment with comes Veritas

morning. Good expense on experience follow on and specifically wanted up you. I the to side. Thank

you pretty significant. out delta variable flesh As mentioned versus earlier, the could impact fixed expenses costs. on if on wondering is I'm the there And year-over-year

that what’s comp is You it. mentioned of share-based driving the majority

you expect your over we to revision medium to should unfavorable you an outlook results? Or favorable assumptions? on outlook fixed Do could weighs costs inflation below the expect expense your touch less your an environment. as on side, expense the inflationary in or the On keep term, experience

Manjit. Good it's morning, Nigel,

It's that experience of I terms about obviously, two-thirds impacts would some of of the related sort So but composition in see variable expenses about We've the I market, we're that side. the we're pockets in by that that X% the many in at and overall certain as we having terms the we're or of the to to of headline quarter, was mean of lower in earlier, that technology focus that spoke feeling expense like pressure drive media in data general I not sort But you the for specialists, continuing seeing more spoke areas say productivity opportunities in seeing in initiatives. inflation, to years, XX%. done levels you're more and compensation of about the I on earlier. are also on that.

feel So of -- ahead our to expenses overall, expenses we continue our manage we our manage growth. can revenue

quarter. finish that off be experience with to this Okay. could That's activity continues if And of investment of helpful. component your I mean, the favorable. I impact

item? spreads to interest continue and stabilize? line that Or way volatility Just we the how what's rate volatility? with or right Should spread about trying interest sense that favorable does to a a until correlate to expect get rates think of experience

Kevin, to Kevin want do you take Morrissey? that,

again Kevin quarter. activity, is as investment you very it's Morrissey. Sure. this Nigel, The know, strong

million. coming of we're kind of how a the new of factors doing on a flows to that we're that of backing the say conditions, market in $XX some quarter the the the vis-a-vis flows market we to positioned I'd You and business of those quarter. each do you're that and an gains how certain seeing take in impact and environment, back of amount our have to advantage had also of that against deals through number much in portfolio with depending we're different that has addition in size to in-force. much There's about of It our reserve the business favorable and

be million $XX per our to favorable to to continues outlook our that say quarter $XX guidance. I'd relative million So

Okay. you. Thank Appreciate color. that

this will time, no and have to I for Bitton further questions closing over We turn Mr. at things remarks.

would the now call listen the afternoon. I Strain our Should will to rebroadcast, wish on website available closing turn I today. you remarks. this like thank it later participants to to Kevin all will be of over for to our

remain what's Thanks, strategy, position purpose We Yaniv. focused managing balance mix risk of management, our strength challenging on sheet and strong through clearly business, times. and capital diversified us helping our are our

thank DentaQuest, of leadership and can employees on our took for pillar You strategic close summer. see steps for relationships delivering and elements our and to our distribution across we sustainability clients, digital our the -- quarter shareholders. to want rest our wish steps you and all I the call a great in traction our were and continue everybody the all partnership joining with with RCBC the business each that renewing across relationships gaining to distribution reviewing with all of forward. our Phoenix, move The strategy continue of