Sun Life Financial Inc. Scotiabank’s 27th Annual Financials Summit
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Okay, awesome. My pleasure to introduce Kevin Strain, the Chief Executive Officer of Sun Life Financial. Kevin, welcome. Thanks for joining us today. I would love to maybe start on, just dive right in here if you do not mind.
Sure. A nice little sort of segue to talk about Lifecos.
K- I am kind of sick about talking about banks all morning.
Yeah, sure. Can I say something quick too? I love this conference because it kind of kicks off, almost to me, it is like school year. It kicks off September. We are all back to school, and we are ready to go. That is one of my favorite ones, and you get great attendance and great meetings, so thanks for pulling it together again this year.
Yeah. Super happy to be part of this, and thank you.
Yeah for joining us. Really appreciate you attending.
Maybe starting with the medium-term targets.
Yeah. Obviously, the ROE coming in just north of 19%, very impressive number, and it's already within striking distance of your 20% target, and then I'm just wondering, as you look, drive that sort of next leg.
Next step. Yeah. We've had our medium-term objectives out for a number of years now, and of course, 10% earnings growth, the 20% plus ROE, which you're referencing, and 40%-50% of our earnings going out as dividend. Which roughly gives us, if we're growing earnings 10%, we're going to be roughly growing our dividends at 10%, so it gives a nice yield to the stock as well. On the ROE side, as you said, we hit 19.1%. We have a great mix of business. Our asset management business, which is now 35% of the company, is very low capital. Our business in the U.S. is very low capital. Canada, we have a fantastic ROE, and we have a great mix of businesses foundational for us. Asia's growing fast. Asia has lagged our ROE for a time as we have been building scale, but now as we build scale and we are seeing Hong Kong, and high net worth in India, Philippines get bigger and larger, we are seeing that ROE drive up.
That 19.1%, we are pretty confident of it hitting our medium-term objective of 20%, and that Asia will drive growth, asset management will drive growth, getting the U.S. business right will drive growth. There is a bunch of elements of our business, the mix of our business, the 10% earnings growth and where it is coming from should all drive that ROE growth. I think 20% ROE is a good ROE for us. It is a good indication of the value- It is good for any large cap.
It is good, yeah. We continue to drive towards that, and we have conviction to achieving that.
Okay. Thanks for that. Would love to talk about the different business lines, maybe starting with the U.S. and the stop-loss business, just because you did have some headwinds there most of 2025, and then you have had some pretty decent traction on- Yeah progress on the repricing.
Just wondering if you can maybe talk about the long-term trajectory here, because it is a business that you are scalable in. You are a big player in the U.S. market.
Yeah. How excited are you about stop-loss in terms of, say, the next 3-5 years?
I have been on the Sun Life executive team now for almost 15 years, and for a good chunk of that, 4 years as CFO and now over 5 years as CEO. That business has performed well for us consistently and sustainably. We have scale. We know what we are doing. We have built good pieces around it. It had one quarter that was not very good, and it was the Q4 of 2024. It was not even 2025. It has really created a lot of noise for. I am surprised by how often I answer a stop-loss question. We have guided to a 7% margin for our U.S. group benefits business. The stop-loss is at the higher end of that. You can imagine a world where the stop-loss business is not exactly this, but is earning 8% a year. So it is 2% a quarter.
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