Sun Life Reports First Quarter 2023 Results.

TORONTO: Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) announced its results for the first quarter ended March 31, 2023.

Underlying net income(1) of $895 million increased $175 million or 24% from Q1'22(2); underlying ROE(1) was 17.3%.

Wealth & asset management underlying net income(1): $411 million, down $11 million or 3%.

Group - Health & Protection underlying net income(1): $303 million, up $180 million or 146%.

Individual - Protection underlying net income(1): $291 million, up $42 million or 17%.

Reported net income of $806 million increased $141 million or 21% from Q1'22(2); reported ROE(1) was 15.6%.

Increase to common share dividend from $0.72 to $0.75 per share.

"We started 2023 with strong results driven by our execution capabilities and growth in our health and protection businesses, highlighting the resilience of our business mix. We generated strong growth in both health and protection sales, which reinforces the importance Clients continue to place on health and financial security," said Kevin Strain, President and CEO of Sun Life. "This is Sun Life's first quarter reporting under IFRS 17 and IFRS 9. A special thank you to all of the Sun Lifers involved in these efforts. While the adoption of these standards will impact how and when some of our business results are reported, it does not change our Client Impact Strategy, our strong fundamentals or our capital strength."

"We are helping our Clients to achieve lifetime financial security and live healthier lives by advancing our Client Impact Strategy with digital tools and new products. For example, in Canada, we expanded access to Sun Life One Plan to more than 750,000 Clients in our Group Retirement Services business, a digital tool that provides Clients with a financial roadmap. And in Hong Kong, we launched two new products designed to offer long-term financial growth potential, while actively integrating ESG concepts into investment strategies."

Quarterly results

Profitability

Q1'23

Q1'22(2)

Underlying net income ($ millions)(1)

895

720

Reported net income - Common shareholders ($ millions)

806

665

Underlying EPS ($)(1)(3)

1.52

1.23

Reported EPS ($)(3)

1.37

1.13

Underlying return on equity ("ROE")(1)

17.3 %

14.7 %

Reported ROE(1)

15.6 %

13.6 %

Growth

Q1'23

Q1'22(2)

Wealth sales & asset management gross flows ($ millions)(1)(4)

46,349

56,956

Group - Health & Protection sales ($ millions)(1)

543

390

Individual - Protection sales ($ millions)(1)

511

409

Assets under management ("AUM") ($ billions)(1)

1,364

1,352

New business Contractual Service Margin ("CSM") ($ millions)(5)

257

173

Financial Strength

Q1'23

As at January

1, 2023(6)

LICAT ratios (at period end)(6)

Sun Life Financial Inc.

148 %

142 %

Sun Life Assurance(7)

144 %

139 %

Financial leverage ratio (at period end)(2)(8)

23.2 %

23.7 %

_________________

(1)

Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in the Q1'23 MD&A.

(2)

2022 restated results may not be fully representative of our future earnings profile, as we were not managing our asset and liability portfolios under the new standards, IFRS 17 and IFRS 9. For more details, see the heading "Note to Readers: 2022 Restated Results on Adoption of IFRS 17 and IFRS 9" in this document.

(3)

All earnings per share ("EPS") measures refer to fully diluted EPS, unless otherwise stated.

(4)

Effective January 1, 2023, Canada wealth sales & asset management gross flows have been updated to exclude retained sales. Prior period amounts have been updated to reflect this change.

(5)

New business CSM represents growth from sales activity in the period, including individual protection sales (excluding joint ventures), and defined benefit solutions and segregated fund wealth sales in Canada. For more details about the CSM, see section E - Contractual Service Margin in the Q1'23 MD&A.

(6)

OSFI's 2023 LICAT Guideline, effective January 1, 2023, specifies that available capital for LICAT purposes includes the Contractual Service Margin. Prior period restatement and resubmissions are not mandated. Pro-forma January 1, 2023 LICAT ratios are disclosed to illustrate transition impact. These pro-forma calculations will not be formally submitted to OSFI. Additionally, effective January 1, 2023, total capital was updated to include the CSM balance. Refer to section F - Financial Strength in the Q1'23 MD&A.

(7)

Sun Life Assurance Company of Canada ("Sun Life Assurance") is SLF Inc.'s principal operating life insurance subsidiary.

(8)

Effective January 1, 2023, the calculation for the financial leverage ratio was updated to include the CSM balance (net of taxes) in the denominator. The CSM (net of taxes) was $9.0 billion as at Q1'23 (January 1, 2023 - $8.7 billion).

Financial and Operational Highlights - Quarterly Comparison (Q1'23 vs. Q1'22)

($ millions)

Q1'23

Underlying net income by business type(1)(2):

Sun Life

Asset

Management

Canada

U.S.

Asia

Corporate

Wealth & asset management

411

282

114

--

15

--

Group - Health & Protection

303

--

...