Sun Life Financial Reports 1Q Results
The information contained in this document concerning the first quarter of 2015 is based on the unaudited interim financial results of
First Quarter 2015 Financial Highlights
- Operating net income(1) of
$446 million or$0.73 per share(1)(2), compared to$454 million or$0.74 per share in the first quarter of 2014. Reported net income of$441 million or$0.72 per share, compared to$400 million or$0.65 per share in the same period last year- Underlying net income(1) of
$516 million or$0.84 per share(1)(2) in the first quarter of 2015, compared to$440 million or$0.72 per share in the first quarter of 2014
- Underlying net income(1) of
- Operating return on equity(1) ("ROE") of 10.4% and underlying ROE(1) of 12.1% in the first quarter of 2015, compared to operating ROE of 12.0% and underlying ROE of 11.6% in the same period last year
- Quarterly dividend declared of
$0.38 per share Minimum Continuing Capital and Surplus Requirements ratio for Sun Life Assurance Company ofCanada of 216%
"Our first quarter underlying earnings were strong at
"In
"Global assets under management rose 20% to
"We were pleased with earnings in SLF U.S.'s Group Benefits business. While it will take several quarters to achieve sustainable results, these results indicate that the management actions taken in 2014 are having a positive impact on the business."
"Our business in
(1) |
Operating net income (loss) and financial information based on operating net income (loss), such as operating earnings (loss) per share, operating ROE, underlying net income (loss), underlying earnings (loss) per share and underlying ROE, are not based on International Financial Reporting Standards. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
(2) |
All earnings per share ("EPS") measures refer to fully diluted EPS, unless otherwise stated. |
Reported net income was
($ millions, after-tax) |
Q1'15 |
Q1'14 |
||
Operating net income |
446 |
454 |
||
Market related impacts |
(22) |
(26) |
||
Assumption changes and management actions |
(48) |
40 |
||
Underlying net income |
516 |
440 |
The Board of Directors of
Operational Highlights
Our strategy is focused on four key pillars of growth. We detail our continued progress against these pillars below.
Leader in financial protection and wealth solutions in our Canadian home market
Defined Benefit Solutions, part of our Group Retirement Services business, completed a transfer of longevity risk for
Our group businesses continue to grow in
Wealth sales in SLF Canada's Individual business grew 4% to
Premier global asset manager, anchored by MFS
Global assets under management ("AUM") reached
MFS's long-term retail fund performance remains strong with 95% and 97% of MFS's mutual fund assets ranked in the top half of their Lipper categories based on five- and ten-year performance, respectively, as at
We completed the purchase of
___________________________ |
|
(1) |
As measured by Benefits |
Leader in U.S. group benefits and International high net worth solutions
SLF U.S.'s medical stop-loss business had continued strong performance, with sales increasing by 21% compared to the first quarter of 2014.
During the quarter we continued to expand distribution opportunities through private exchanges by being selected to participate on the
As a result of our pricing actions, group life and disability sales were down in the quarter, but pricing levels for new business and persistency of existing business were both in line with our expectations.
International life sales in the first quarter of 2015 were
Growing
SLF Asia continued to grow agency capabilities in the region. Agency sales in
Sun Life of
Other Highlights
How We Report Our Results
Use of Non-IFRS Financial Measures
We report certain financial information using non-IFRS financial measures, as we believe that these measures provide information that is useful to investors in understanding our performance and facilitate a comparison of our quarterly and full year results from period to period. These non-IFRS financial measures do not have any standardized meaning and may not be comparable with similar measures used by other companies. For certain non-IFRS financial measures, there are no directly comparable amounts under IFRS. These non-IFRS financial measures should not be viewed as alternatives to measures of financial performance determined in accordance with IFRS. Additional information concerning these non-IFRS financial measures and reconciliations to the closest IFRS measures are included in our annual and interim management's discussion and analysis ("MD&A") and the Supplementary Financial Information packages that are available on www.sunlife.com under Investors – Financial results & reports. Reconciliations to IFRS measures are also available in this document under the heading Reconciliation of Non-IFRS Financial Measures.
Operating net income (loss) and financial measures based on operating net income (loss), consisting of operating earnings per share ("EPS") or operating loss per share, and operating return on equity ("ROE"), are non-IFRS financial measures. Operating net income (loss) excludes from reported net income the impact of the following amounts that are not operational or ongoing in nature to assist investors in understanding our business performance: (i) certain hedges in SLF Canada that do not qualify for hedge accounting; (ii) fair value adjustments on share-based payment awards at MFS; (iii) the loss on the sale of our U.S. Annuity Business(1); (iv) the impact of assumption changes and management actions related to the sale of our U.S. Annuity Business(1); (v) restructuring and other related costs (including impacts related to the sale of our U.S. Annuity Business); (vi) goodwill and intangible asset impairment charges; and (vii) other items that are not operational or ongoing in nature. Operating EPS also excludes the dilutive impact of convertible instruments.
Underlying net income (loss) and financial measures based on underlying net income (loss), consisting of underlying EPS or underlying loss per share, and underlying ROE, are non-IFRS financial measures. Underlying net income (loss) removes from operating net income (loss) the impact of the following items that create volatility in our results under IFRS and when removed assist in explaining our results from period to period: (a) market related impacts; (b) assumption changes and management actions; and (c) other items that have not been treated as adjustments to operating net income and when removed assist in explaining our results from period to period. Market related impacts include: (i) the impact of changes in interest rates that differ from our best estimate assumptions in the reporting period on investment returns and the value of derivative instruments used in our hedging programs, including changes in credit and swap spreads, and any changes to the assumed fixed income reinvestment rates in determining the actuarial liabilities; (ii) the impact of changes in equity markets, net of hedging, above or below our best estimate assumptions of approximately 2% growth per quarter in the reporting period and of basis risk inherent in our hedging program for products that provide benefit guarantees; and (iii) the impact of changes in the fair value of real estate properties in the reporting period. Additional information regarding these adjustments is available in the footnotes to the table included under the heading Q1 2015 vs. Q1 2014 in the Financial Summary section in this document. Assumption changes reflect the impact of revisions to the assumptions used in determining our liabilities for insurance contracts and investment contracts. The impact on our liabilities for insurance contracts and investment contracts of actions taken by management in the current reporting period, referred to as management actions include, for example, changes in the prices of in-force products, new or revised reinsurance on in-force business, or material changes to investment policies for asset segments supporting our liabilities. Underlying EPS also excludes the dilutive impact of convertible instruments.
Other non-IFRS financial measures that we use include adjusted revenue, administrative services only ("ASO"), premium and deposit equivalents, mutual fund assets and sales, managed fund assets and sales, premiums and deposits, adjusted premiums and deposits, assets under management ("AUM") and assets under administration, and operating effective income tax rate on an operating net income basis.
Unless indicated otherwise, all factors discussed in this document that impact our results are applicable to reported net income (loss), operating net income (loss), and underlying net income (loss). Reported net income (loss) refers to Common shareholders' net income (loss) determined in accordance with IFRS. Reported net income (loss), operating net income (loss) including adjustments, underlying net income (loss) including adjustments, and net income and other comprehensive income ("OCI") sensitivities are expressed on an after-tax basis unless otherwise noted.
All EPS measures in this document refer to fully diluted EPS, unless otherwise stated.
Additional Information
Additional information about
________________________ |
|
(1) |
Effective |
Financial Summary
Quarterly results |
||||||
($ millions, unless otherwise noted) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
|
Net income (loss) |
||||||
Operating net income (loss)(1) |
446 |
511 |
467 |
488 |
454 |
|
Reported net income (loss) |
441 |
502 |
435 |
425 |
400 |
|
Underlying net income (loss)(1) |
516 |
360 |
517 |
499 |
440 |
|
Diluted EPS ($) |
||||||
Operating EPS (diluted)(1) |
0.73 |
0.83 |
0.76 |
0.80 |
0.74 |
|
Reported EPS (diluted) |
0.72 |
0.81 |
0.71 |
0.69 |
0.65 |
|
Underlying EPS (diluted)(1) |
0.84 |
0.59 |
0.84 |
0.81 |
0.72 |
|
Reported basic EPS ($) |
0.72 |
0.82 |
0.71 |
0.70 |
0.66 |
|
Avg. common shares outstanding (millions) |
613 |
613 |
612 |
611 |
610 |
|
Closing common shares outstanding (millions) |
611.2 |
613.1 |
612.7 |
611.4 |
610.6 |
|
Dividends per common share ($) |
0.36 |
0.36 |
0.36 |
0.36 |
0.36 |
|
MCCSR ratio(2) |
216% |
217% |
218% |
222% |
221% |
|
Return on equity (%) |
||||||
Operating ROE(1) |
10.4% |
12.6% |
11.9% |
12.6% |
12.0% |
|
Underlying ROE(1) |
12.1% |
8.8% |
13.1% |
12.9% |
11.6% |
|
Premiums and deposits |
||||||
Net premium revenue |
2,207 |
2,701 |
2,695 |
2,372 |
2,228 |
|
Segregated fund deposits |
2,411 |
2,155 |
1,907 |
2,611 |
2,576 |
|
Mutual fund sales(1) |
22,124 |
17,071 |
14,714 |
16,267 |
18,567 |
|
Managed fund sales(1) |
8,243 |
7,988 |
8,170 |
6,131 |
7,579 |
|
ASO premium and deposit equivalents(1) |
1,769 |
1,855 |
1,638 |
1,495 |
1,760 |
|
Total premiums and deposits(1) |
36,754 |
31,770 |
29,124 |
28,876 |
32,710 |
|
Assets under management |
||||||
General fund assets |
148,725 |
139,419 |
133,623 |
129,253 |
128,171 |
|
Segregated funds |
89,667 |
83,938 |
82,058 |
82,461 |
80,054 |
|
Mutual funds, managed funds and other AUM(1) |
574,166 |
511,085 |
482,499 |
472,677 |
467,662 |
|
Total AUM(1) |
812,558 |
734,442 |
698,180 |
684,391 |
675,887 |
|
Capital |
||||||
Subordinated debt and innovative capital instruments(3) |
2,881 |
2,865 |
2,857 |
2,849 |
2,606 |
|
Participating policyholders' equity |
142 |
141 |
133 |
131 |
133 |
|
Total shareholders' equity |
19,761 |
18,731 |
18,156 |
17,641 |
17,818 |
|
Total capital |
22,784 |
21,737 |
21,146 |
20,621 |
20,557 |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
(2) |
|
(3) |
Innovative capital instruments consist of |
Unless indicated otherwise, all factors discussed in this document that impact our results are applicable to reported net income (loss), operating net income (loss), and underlying net income (loss).
Q1 2015 vs. Q1 2014
Our reported net income was
Operating ROE and underlying ROE in the first quarter of 2015 were 10.4% and 12.1%, respectively. Operating and underlying ROE in the first quarter of 2014 were 12.0% and 11.6%, respectively. The decrease in operating ROE compared to the first quarter of 2014 was largely due to the growth in equity as a result of foreign currency effects and retained earnings over the past twelve months.
The following table reconciles our net income measures and sets out the impact that other notable items had on our net income in the first quarter of 2015 and 2014.
Quarterly results |
||||
($ millions, after-tax) |
Q1'15 |
Q1'14 |
||
Reported net income |
441 |
400 |
||
Certain hedges that do not qualify for hedge accounting in SLF Canada |
15 |
5 |
||
Fair value adjustments on share-based payment awards at MFS |
(20) |
(51) |
||
Restructuring and other related costs |
— |
(8) |
||
Operating net income(1) |
446 |
454 |
||
Equity market impact |
||||
Impact from equity market changes |
23 |
30 |
||
Basis risk impact |
(14) |
3 |
||
Equity market impact(2) |
9 |
33 |
||
Interest rate impact |
||||
Impact from interest rate changes |
(54) |
(58) |
||
Impact of credit spread movements |
(10) |
(13) |
||
Impact of swap spread movements |
23 |
7 |
||
Interest rate impact(3) |
(41) |
(64) |
||
Increases (decreases) from changes in the fair value of real estate |
10 |
5 |
||
Market related impacts |
(22) |
(26) |
||
Assumption changes and management actions |
(48) |
40 |
||
Underlying net income(1) |
516 |
440 |
||
Impact of other notable items on our net income: |
||||
Experience related items(4) |
||||
Impact of investment activity on insurance contract liabilities |
25 |
36 |
||
Mortality |
11 |
(10) |
||
Morbidity |
2 |
(12) |
||
Credit |
5 |
16 |
||
Lapse and other policyholder behaviour |
(16) |
(19) |
||
Expenses |
(14) |
(14) |
||
Other |
4 |
— |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures and |
(2) |
Equity market impact consists primarily of the effect of changes in equity markets during the |
(3) |
Interest rate impact includes the effect of interest rate changes on investment returns that differ |
(4) |
Experience related items reflect the difference between actual experience during the reporting |
Our reported net income for the first quarter of 2015 and 2014 included items that are not operational or ongoing in nature and are, therefore, excluded in our calculation of operating net income. Operating net income for the first quarter of 2015 and 2014 excluded the net impact of certain hedges that do not qualify for hedge accounting in SLF Canada, fair value adjustments on share-based payment awards at MFS, and restructuring and other related costs. The net impact of these items reduced reported net income by
Our underlying net income for the first quarter of 2015 and 2014 excludes market related impacts and assumption changes and management actions. Assumption changes and management actions in the quarter were primarily due to a
Net income in the first quarter of 2015 also reflected gains from investment activity on insurance contract liabilities and positive mortality experience, offset by lapse and other policyholder behaviour and expense experience.
Net income in the first quarter of 2014 also reflected gains from investment activity on insurance contract liabilities and positive credit experience, offset by unfavourable mortality and morbidity, lapse and other policyholder behaviour, and expense experience.
Impact of Foreign Exchange Rates
We have operations in many markets worldwide, including
Items impacting our Consolidated Statements of Operations, such as Revenue, Benefits and expenses, and income, are translated to Canadian dollars using average exchange rates for the respective period. For items impacting our Consolidated Statements of Financial Position, such as Assets and Liabilities, period end rates are used for currency translation purposes. The following table provides the most relevant foreign exchange rates over the past five quarters.
Exchange Rate |
Quarterly |
||||||||||
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
|||||||
Average |
|||||||||||
U.S. Dollar |
1.240 |
1.136 |
1.088 |
1.090 |
1.102 |
||||||
U. |
1.878 |
1.797 |
1.817 |
1.835 |
1.824 |
||||||
Period end |
|||||||||||
U.S. Dollar |
1.269 |
1.162 |
1.120 |
1.067 |
1.105 |
||||||
U. |
1.880 |
1.809 |
1.815 |
1.824 |
1.841 |
In general, our net income benefits from a weakening Canadian dollar and is adversely affected by a strengthening Canadian dollar as net income from the Company's international operations is translated back to Canadian dollars. However, in a period of losses, the weakening of the Canadian dollar has the effect of increasing the losses. The relative impact of foreign exchange in any given period is driven by the movement of currency rates as well as the proportion of earnings generated in our foreign operations. We generally express the impact of foreign exchange on net income on a year-over-year basis. During the first quarter of 2015, our operating net income increased by
Performance by
SLF Canada
SLF Canada is the Canadian market leader in a number of its businesses, providing products and services to 6 million Canadians. Our distribution breadth, strong service culture, technology leadership, and brand recognition provide an excellent platform for growth. SLF Canada has three main business units - Individual Insurance & Wealth, Group Benefits, and Group Retirement Services - which offer a full range of protection, wealth accumulation, and income products and services to individuals in their communities and their workplaces.
Quarterly results |
|||||||||||
($ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
||||||
Underlying net income (loss)(1) |
201 |
181 |
237 |
195 |
210 |
||||||
Market related impacts |
(69) |
(54) |
(33) |
(2) |
12 |
||||||
Assumption changes and management actions |
3 |
(4) |
35 |
4 |
16 |
||||||
Operating net income (loss)(1) |
135 |
123 |
239 |
197 |
238 |
||||||
Hedges that do not qualify for hedge accounting |
15 |
(6) |
2 |
(8) |
5 |
||||||
Reported net income (loss) |
150 |
117 |
241 |
189 |
243 |
||||||
Underlying ROE (%)(1) |
10.6 |
9.7 |
12.8 |
10.6 |
11.6 |
||||||
Operating ROE (%)(1) |
7.1 |
6.6 |
12.9 |
10.7 |
13.1 |
||||||
Operating net income (loss) by business unit(1) |
|||||||||||
|
38 |
80 |
68 |
96 |
140 |
||||||
Group Benefits(1) |
54 |
55 |
124 |
53 |
58 |
||||||
Group Retirement Services(1) |
43 |
(12) |
47 |
48 |
40 |
||||||
Total operating net income (loss)(1) |
135 |
123 |
239 |
197 |
238 |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
Q1 2015 vs. Q1 2014
SLF Canada's reported net income was
Underlying net income in the first quarter of 2015 was
Net income in the first quarter of 2015 also reflected gains from investment activities on insurance contract liabilities, partially offset by unfavourable morbidity experience within Group Benefits ("GB") including high cost drug claims, and unfavourable lapse and other policyholder experience.
Net income in the first quarter of 2014 also reflected gains from investment activities on insurance contract liabilities, partially offset by unfavourable morbidity experience in GB in our disability line of business.
In the first quarter of 2015, individual life and health insurance product sales increased to
Group Retirement Services ("GRS") new sales increased to
SLF U.S.
SLF U.S. has three business units: Group Benefits, International, and In-force Management. Group Benefits provides protection solutions to employers and employees including group life, disability, medical stop-loss, and dental insurance products, as well as a suite of voluntary benefits products. International offers individual life insurance and investment wealth products to high net worth clients in international markets. In-force Management includes certain closed individual life insurance products, primarily universal life, and participating whole life insurance.
Quarterly results |
|||||||||||
(US$ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
||||||
Underlying net income (loss)(1) |
65 |
9 |
45 |
101 |
85 |
||||||
Market related impacts |
8 |
16 |
(6) |
(13) |
(34) |
||||||
Assumption changes and management actions |
(54) |
121 |
(42) |
4 |
19 |
||||||
Operating net income (loss) (1) |
19 |
146 |
(3) |
92 |
70 |
||||||
Reported net income (loss) |
19 |
146 |
(3) |
92 |
70 |
||||||
Underlying ROE (%)(1) |
9.7 |
1.3 |
6.8 |
15.1 |
12.0 |
||||||
Operating ROE (%)(1) |
2.8 |
22.0 |
(0.4) |
13.7 |
9.9 |
||||||
Operating net income (loss) by business unit(1) |
|||||||||||
Group Benefits(1) |
38 |
(64) |
(11) |
3 |
17 |
||||||
International(1) |
2 |
78 |
33 |
36 |
14 |
||||||
In-force Management(1) |
(21) |
132 |
(25) |
53 |
39 |
||||||
Total operating net income (loss)(1) |
19 |
146 |
(3) |
92 |
70 |
||||||
(C$ millions) |
|||||||||||
Underlying net income (loss)(1) |
81 |
13 |
48 |
111 |
94 |
||||||
Operating net income (loss)(1) |
35 |
168 |
(4) |
100 |
77 |
||||||
Reported net income (loss) |
35 |
168 |
(4) |
100 |
77 |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
Q1 2015 vs. Q1 2014
SLF U.S.'s reported net income and operating net income were
In U.S. dollars, SLF U.S.'s reported net income and operating net income were
Net income in the first quarter of 2015 also reflected favourable morbidity and mortality experience in Group Benefits and net realized gains on the sale of available for sale ("AFS") assets, partially offset by adverse mortality and policyholder behaviour experience in In-force Management.
Net income in the first quarter of 2014 also reflected net realized gains on the sale of AFS assets, partially offset by unfavourable mortality experience in Group Benefits and In-force Management.
Sales in Group Benefits in the first quarter of 2015 decreased 11% compared to the first quarter of 2014, reflecting the impact of price increases. Within Group Benefits, medical stop-loss sales increased 21%.
Sales in International decreased 33% compared to the first quarter of 2014, as we maintained pricing discipline in recognition of the low interest rate environment, and continued to realign our marketing and distribution to focus on select regions, distributors, and customer segments.
MFS is a premier global asset management firm which offers a comprehensive selection of products and services. Drawing on an investment heritage that emphasizes collaboration and integrity, MFS actively manages assets for retail and institutional investors around the world through mutual and commingled funds, separately managed accounts, institutional products, and retirement strategies.
Quarterly results |
||||||||||||
(US$ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
|||||||
Underlying net income(1) |
135 |
137 |
154 |
133 |
133 |
|||||||
Operating net income(1) |
135 |
137 |
154 |
133 |
133 |
|||||||
Fair value adjustments on share-based payment awards |
(16) |
— |
(28) |
(40) |
(46) |
|||||||
Reported net income |
119 |
137 |
126 |
93 |
87 |
|||||||
(C$ millions) |
||||||||||||
Underlying net income(1) |
168 |
156 |
168 |
145 |
147 |
|||||||
Operating net income(1) |
168 |
156 |
168 |
145 |
147 |
|||||||
Fair value adjustments on share-based payment awards |
(20) |
1 |
(31) |
(44) |
(51) |
|||||||
Reported net income |
148 |
157 |
137 |
101 |
96 |
|||||||
Pre-tax operating profit margin ratio(2) |
40 % |
39 % |
43 % |
40 % |
42 % |
|||||||
Average net assets (US$ billions)(2) |
436.4 |
427.3 |
434.7 |
427.9 |
412.0 |
|||||||
Assets under management (US$ billions)(2)(3) |
441.4 |
431.0 |
424.8 |
438.6 |
420.6 |
|||||||
Gross sales (US$ billions)(2) |
22.8 |
20.5 |
20.1 |
19.5 |
22.4 |
|||||||
Net sales (US$ billions)(2) |
(0.2) |
(1.9) |
(2.0) |
1.4 |
3.7 |
|||||||
Asset appreciation (depreciation) (US$ billions) |
10.6 |
8.1 |
(11.8) |
16.6 |
4.1 |
|||||||
S&P 500 Index (daily average) |
2,064 |
2,012 |
1,977 |
1,879 |
1,834 |
|||||||
MSCI EAFE Index (daily average) |
1,817 |
1,795 |
1,924 |
1,942 |
1,894 |
(1) |
Represents a non-IFRS financial measure that excludes fair value adjustments on share-based payment awards at MFS. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
(2) |
Pre-tax operating profit margin ratio, AUM, average net assets, and sales are non-IFRS financial measures. See Reconciliation of Non-IFRS Financial Measures. |
(3) |
Monthly Information on AUM is provided by MFS on its Corporate Fact Sheet, which can be found in the "About MFS" link for U.S. individual investors at www.mfs.com/wps/portal. |
Q1 2015 vs. Q1 2014
MFS's reported net income was
In U.S. dollars, MFS's reported net income was
Net income increased in the first quarter of 2015 compared to the same period in 2014 driven primarily by higher average net assets partially offset by higher advertising expense and our continued investment in technological infrastructure. MFS's pre-tax operating profit margin ratio was 40% in the first quarter of 2015, down from 42% in the first quarter of 2014.
Total AUM increased to
SLF Asia
SLF Asia operates through subsidiaries in
Quarterly results |
|||||||||||
($ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
||||||
Underlying net income (loss)(1) |
62 |
50 |
48 |
39 |
37 |
||||||
Market related impacts |
10 |
(8) |
3 |
(1) |
(6) |
||||||
Assumption changes and management actions |
(4) |
20 |
— |
(1) |
1 |
||||||
Operating net income (loss)(1) |
68 |
62 |
51 |
37 |
32 |
||||||
Reported net income (loss) |
68 |
62 |
51 |
37 |
32 |
||||||
Underlying ROE (%)(1) |
7.7 |
6.8 |
7.1 |
6.1 |
6.0 |
||||||
Operating ROE (%)(1) |
8.6 |
8.4 |
7.5 |
5.8 |
5.1 |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
Q1 2015 vs. Q1 2014
SLF Asia's reported net income and operating net income were
Underlying net income was
Net income in the first quarter of 2015 when compared with the first quarter of 2014 also reflected business growth and net gains on AFS securities in 2015; net income in the first quarter of 2014 reflected net losses on AFS securities.
Total individual insurance sales in the first quarter of 2015 were up 28% from the first quarter of 2014, with growth in all markets except in
Corporate
Corporate includes the results of SLF
Quarterly results |
|||||||||||
($ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
||||||
Underlying net income (loss)(1) |
4 |
(40) |
16 |
9 |
(48) |
||||||
Market related impacts |
28 |
23 |
(18) |
(4) |
5 |
||||||
Assumption changes and management actions |
8 |
19 |
15 |
4 |
3 |
||||||
Operating net income (loss)(1) |
40 |
2 |
13 |
9 |
(40) |
||||||
Restructuring and other related costs |
— |
(4) |
(3) |
(11) |
(8) |
||||||
Reported net income (loss) |
40 |
(2) |
10 |
(2) |
(48) |
||||||
Operating net income (loss) by business unit(1) |
|||||||||||
SLF |
71 |
65 |
44 |
37 |
28 |
||||||
Corporate Support(1) |
(31) |
(63) |
(31) |
(28) |
(68) |
||||||
Total operating net income (loss)(1) |
40 |
2 |
13 |
9 |
(40) |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
Q1 2015 vs. Q1 2014
Corporate had a reported net income of
Underlying net income was
SLF
Corporate Support had an operating net loss of
Additional Financial Disclosure
Revenue
Quarterly results |
|||||||||||
($ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
||||||
Premiums |
|||||||||||
Gross |
3,723 |
4,023 |
4,080 |
3,758 |
3,638 |
||||||
Ceded |
(1,516) |
(1,322) |
(1,385) |
(1,386) |
(1,410) |
||||||
Net premium revenue |
2,207 |
2,701 |
2,695 |
2,372 |
2,228 |
||||||
Net investment income |
|||||||||||
Interest and other investment income |
1,279 |
1,258 |
1,265 |
1,230 |
1,188 |
||||||
Fair value and foreign currency changes on assets and liabilities |
2,495 |
2,196 |
495 |
1,560 |
1,921 |
||||||
Net gains (losses) on available-for-sale assets |
96 |
49 |
48 |
48 |
57 |
||||||
Fee income |
1,255 |
1,171 |
1,111 |
1,105 |
1,066 |
||||||
Total revenue |
7,332 |
7,375 |
5,614 |
6,315 |
6,460 |
||||||
Adjusted revenue(1) |
5,715 |
6,261 |
6,280 |
5,900 |
5,700 |
(1) |
Represents a non-IFRS financial measure that excludes from revenue the impact of Constant Currency Adjustment, FV Adjustment, and Reinsurance in SLF Canada's GB Operations Adjustment as described in Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
Revenue in the first quarter of 2015 was
Premiums and Deposits
Quarterly results |
||||||||||
($ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
|||||
Net premium revenue |
2,207 |
2,701 |
2,695 |
2,372 |
2,228 |
|||||
Segregated fund deposits |
2,411 |
2,155 |
1,907 |
2,611 |
2,576 |
|||||
Mutual fund sales(1) |
22,124 |
17,071 |
14,714 |
16,267 |
18,567 |
|||||
Managed fund sales(1) |
8,243 |
7,988 |
8,170 |
6,131 |
7,579 |
|||||
ASO premium and deposit equivalents(1) |
1,769 |
1,855 |
1,638 |
1,495 |
1,760 |
|||||
Total premiums and deposits(1) |
36,754 |
31,770 |
29,124 |
28,876 |
32,710 |
|||||
Total adjusted premiums and deposits(1)(2) |
34,426 |
32,141 |
30,554 |
30,232 |
33,871 |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
(2) |
Represents a non-IFRS financial measure that excludes from premiums and deposits the impact of Constant Currency Adjustment and Reinsurance in SLF Canada's GB Operations Adjustment as described in Use of Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures. |
Premiums and deposits were
Net premium revenue, which reflects gross premiums less amounts ceded to reinsurers, was
Segregated fund deposits were
Sales of mutual funds increased
ASO premium and deposit equivalents of
Sales
In SLF Canada, life and health sales consist of sales of individual insurance and group benefits products; wealth sales consist of sales of individual wealth products and sales in GRS. In SLF U.S., life and health sales consist of sales by Group Benefits and individual life sales by International; wealth sales consist of investment product sales in International. In SLF Asia, life and health sales consist of the individual and group life and health sales from wholly-owned subsidiaries and joint ventures based on our proportionate equity interest in
($ millions) |
Q1'15 |
Q1'14 |
|||||
Life and health sales(1) |
|||||||
SLF Canada |
234 |
237 |
|||||
SLF U.S. |
85 |
96 |
|||||
SLF Asia |
129 |
102 |
|||||
Total life and health sales |
448 |
435 |
|||||
Wealth sales(1) |
|||||||
SLF Canada |
2,796 |
4,213 |
|||||
SLF U.S. |
164 |
211 |
|||||
SLF Asia |
2,188 |
1,350 |
|||||
Total wealth sales excluding MFS |
5,148 |
5,774 |
|||||
MFS sales |
28,236 |
24,641 |
|||||
Total wealth sales |
33,384 |
30,415 |
|||||
Large case longevity insurance sale(1)(2) - SLF Canada |
5,260 |
— |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures. |
(2) |
Represents the transfer of longevity risk of BCE Inc.'s Bell Canada pension plan. |
- SLF Canada life and health sales were
$234 million in the first quarter of 2015, slightly lower compared to the first quarter of 2014 - SLF U.S. life and health sales were
$85 million in the first quarter of 2015, compared to$96 million in the first quarter of 2014, primarily driven by lower sales in individual insurance in International, partially offset by favourable currency impact - SLF Asia life and health sales were
$129 million in the first quarter of 2015, compared to$102 million in the first quarter of 2014, driven by growth in every region exceptIndia and a favourable currency impact of$13 million
- SLF Canada wealth sales were
$2.8 billion in the first quarter of 2015, compared to$4.2 billion in the first quarter of 2014, mainly attributable to lower sales in GRS - SLF U.S. wealth sales were
$164 million in the first quarter of 2015, compared to$211 million in the first quarter of 2014, due to lower investment product sales in International, partially offset by favourable currency impact - SLF Asia wealth sales were
$2.2 billion in the first quarter of 2015, compared to$1.4 billion in the first quarter of 2014, primarily driven by higher fund sales inIndia andChina and favourable currency impact - MFS gross sales were
$28.2 billion in the first quarter of 2015, compared to$24.6 billion in the first quarter of 2014, largely reflecting higher mutual fund sales and favourable currency impact
Assets Under Management
AUM consist of general funds, segregated funds, and other AUM. Other AUM includes mutual funds and managed funds, which include institutional and other third-party assets managed by the Company.
AUM were
(i) |
an increase of |
(ii) |
favourable market movements on the value of mutual funds, managed funds, and segregated funds of |
(iii) |
an increase of |
(iv) |
other business growth of |
(v) |
net sales of mutual, managed, and segregated funds of |
Changes in the Statements of Financial Position and in Shareholders' Equity
Total general fund assets were
Insurance contract liabilities (excluding other policy liabilities and assets) of
Shareholders' equity, including preferred share capital, was
(i) |
shareholders' net income of |
(ii) |
an increase of |
(iii) |
net unrealized gains on AFS assets in OCI of |
(iv) |
proceeds of |
(v) |
common share dividend payments of |
(vi) |
common share repurchases of |
(vii) |
changes in liabilities for defined benefit plans of |
As at
Cash Flows
Quarterly results |
|||||||
($ millions) |
Q1'15 |
Q1'14 |
|||||
Net cash and cash equivalents, beginning of period |
3,364 |
3,324 |
|||||
Cash flows provided by (used in): |
|||||||
Operating activities |
890 |
167 |
|||||
Investing activities |
(36) |
(4) |
|||||
Financing activities |
(346) |
(906) |
|||||
Changes due to fluctuations in exchange rates |
209 |
91 |
|||||
Increase (decrease) in cash and cash equivalents |
717 |
(652) |
|||||
Net cash and cash equivalents, end of period |
4,081 |
2,672 |
|||||
Short-term securities, end of period |
2,486 |
3,261 |
|||||
Net cash, cash equivalents and short-term securities, end of period |
6,567 |
5,933 |
Net cash, cash equivalents and short-term securities were
The operating activities of the Company generate cash flows which include net premium revenue, net investment income, fee income, and the sale of investments. They are the principal source of funds to pay for policyholder claims and benefits, commissions, operating expenses, and the purchase of investments. Cash flows used in investing activities primarily include transactions related to associates and joint ventures. Cash flows used in financing activities largely reflect capital transactions including dividends, the issuance and repurchase of shares, as well as the issuance and retirement of debt instruments and preferred shares.
The higher cash flow used in financing activities in the first quarter of 2014 compared to the first quarter of 2015 was largely due to the redemption of subordinated debt.
Income Taxes
In the first quarter of 2015, our effective tax rates on reported net income and operating net income were 17.1% and 17.6%, respectively. Normally, our effective tax rate is reduced below the statutory rate of 26.5% by a sustainable stream of tax benefits, mainly tax exempt investment income, that is generally expected to decrease the effective tax rate to a range of 18% to 22%.
The effective tax rate calculated on an operating basis excludes amounts attributable to participating policyholders and non-operating items.
Quarterly Financial Results
The following table provides a summary of our results for the eight most recently completed quarters. A more complete discussion of our historical quarterly results can be found in our interim and annual MD&As for the relevant periods.
Quarterly results |
|||||||||||||||||
($ millions, unless otherwise noted) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
Q4'13 |
Q3'13 |
Q2'13 |
|||||||||
Net income (loss) |
|||||||||||||||||
Operating(1) |
446 |
511 |
467 |
488 |
454 |
642 |
422 |
431 |
|||||||||
Reported |
441 |
502 |
435 |
425 |
400 |
571 |
324 |
391 |
|||||||||
Underlying(1) |
516 |
360 |
517 |
499 |
440 |
375 |
448 |
373 |
|||||||||
Diluted EPS ($) |
|||||||||||||||||
Operating(1) |
0.73 |
0.83 |
0.76 |
0.80 |
0.74 |
1.05 |
0.69 |
0.71 |
|||||||||
Reported |
0.72 |
0.81 |
0.71 |
0.69 |
0.65 |
0.93 |
0.53 |
0.64 |
|||||||||
Underlying(1) |
0.84 |
0.59 |
0.84 |
0.81 |
0.72 |
0.61 |
0.74 |
0.62 |
|||||||||
Basic Reported EPS ($) |
|||||||||||||||||
Reported |
0.72 |
0.82 |
0.71 |
0.70 |
0.66 |
0.94 |
0.53 |
0.65 |
|||||||||
Operating net income (loss) by segment(1) |
|||||||||||||||||
SLF Canada(1) |
135 |
123 |
239 |
197 |
238 |
137 |
215 |
210 |
|||||||||
SLF U.S.(1) |
35 |
168 |
(4) |
100 |
77 |
341 |
105 |
126 |
|||||||||
MFS(1) |
168 |
156 |
168 |
145 |
147 |
156 |
120 |
104 |
|||||||||
SLF Asia(1) |
68 |
62 |
51 |
37 |
32 |
42 |
18 |
46 |
|||||||||
Corporate(1) |
40 |
2 |
13 |
9 |
(40) |
(34) |
(36) |
(55) |
|||||||||
Total operating net income (loss)(1) |
446 |
511 |
467 |
488 |
454 |
642 |
422 |
431 |
(1) |
Represents a non-IFRS financial measure. See Use of Non-IFRS Financial Measures. |
Fourth Quarter 2014
Operating net income of
Third Quarter 2014
Operating net income of
Second Quarter 2014
Operating net income of
First Quarter 2014
Operating net income of
Fourth Quarter 2013
Operating net income of
Third Quarter 2013
Operating net income was
Second Quarter 2013
Operating net income was
Investments
We had total general fund invested assets of
The following table sets out the coposition of our invested assets.(1)
|
|
||||||||||
($ millions) |
Carrying |
% of total |
Carrying |
% of total |
|||||||
Cash, cash equivalents and short-term securities |
6,744 |
5.1 % |
6,818 |
5.4 % |
|||||||
Debt securities – FVTPL |
57,176 |
43.0 % |
53,127 |
42.4 % |
|||||||
Debt securities – AFS |
13,537 |
10.2 % |
13,087 |
10.5 % |
|||||||
Equity securities – FVTPL |
4,621 |
3.5 % |
4,357 |
3.5 % |
|||||||
Equity securities – AFS |
930 |
0.7 % |
866 |
0.7 % |
|||||||
Mortgages and loans |
35,727 |
26.8 % |
33,679 |
26.9 % |
|||||||
Derivative assets |
2,378 |
1.8 % |
1,839 |
1.5 % |
|||||||
Other invested assets |
2,686 |
2.0 % |
2,375 |
1.9 % |
|||||||
Policy loans |
3,000 |
2.2 % |
2,895 |
2.3 % |
|||||||
Investment properties |
6,260 |
4.7 % |
6,108 |
4.9 % |
|||||||
Total invested assets |
133,059 |
100 % |
125,151 |
100 % |
(1) |
The invested asset values and ratios presented are based on the carrying value of the respective asset categories. Carrying values for FVTPL and AFS invested assets are generally equal to fair value. For invested assets supporting insurance contracts, in the event of default, if the amounts recovered are insufficient to satisfy the related insurance contract liability cash flows that the assets are intended to support, credit exposure may be greater than the carrying value of the asset. |
Energy Sector Exposure
Our general fund invested assets are well diversified across investment types, geographies, and sectors.
As at
Our mortgage and real estate portfolio includes office, industrial, retail, and multi-family buildings occupied by tenants representing a diversified group of industries. Our most significant property exposure to the oil and gas segment is located in
Our debt securities portfolio is actively managed through a regular program of purchases and sales aimed at optimizing yield, quality, and liquidity, while ensuring that the asset portfolio remains diversified and well-matched to insurance contract liabilities by duration. As at
Corporate debt securities that are not issued or guaranteed by sovereign, regional, and municipal governments represented 67.7% of our total debt securities as at
|
|
|||||||
($ millions) |
Government issued or |
Financials |
Government issued or |
Financials |
||||
|
15,015 |
2,094 |
14,650 |
2,391 |
||||
|
1,553 |
6,560 |
1,590 |
5,992 |
||||
|
2,609 |
2,029 |
2,484 |
1,992 |
||||
|
2,804 |
40 |
2,575 |
17 |
||||
Eurozone(1) |
168 |
828 |
171 |
762 |
||||
Other |
668 |
1,528 |
611 |
1,390 |
||||
Total |
22,817 |
13,079 |
22,081 |
12,544 |
(1) |
Our investments in Eurozone countries primarily include |
Our gross unrealized losses as at
Our debt securities as at
Our debt securities as at
Mortgages and Loans
Mortgages and loans disclosures in this section are presented at their carrying value on our Consolidated Statements of Financial Position. As at
Mortgages and Loans by Geography
|
|
||||||||||||
($ millions) |
Mortgages |
Loans |
Total |
Mortgages |
Loans |
Total |
|||||||
|
7,996 |
12,544 |
20,540 |
7,847 |
12,308 |
20,155 |
|||||||
|
5,998 |
5,946 |
11,944 |
5,563 |
5,196 |
10,759 |
|||||||
|
— |
804 |
804 |
1 |
776 |
777 |
|||||||
Other |
— |
2,439 |
2,439 |
— |
1,988 |
1,988 |
|||||||
Total |
13,994 |
21,733 |
35,727 |
13,411 |
20,268 |
33,679 |
As at
As at
Mortgages and Loans Past Due or Impaired
|
|||||||||||||||
Gross carrying value |
Allowance for losses |
||||||||||||||
($ millions) |
Mortgages |
Loans |
Total |
Mortgages |
Loans |
Total |
|||||||||
Not past due |
13,879 |
21,710 |
35,589 |
— |
— |
— |
|||||||||
Past due: |
|||||||||||||||
Past due less than 90 days |
35 |
— |
35 |
— |
— |
— |
|||||||||
Past due 90 to 179 days |
— |
— |
— |
— |
— |
— |
|||||||||
Past due 180 days or more |
— |
— |
— |
— |
— |
— |
|||||||||
Impaired |
116 |
40 |
156 |
36(1) |
17 |
53 |
|||||||||
Total |
14,030 |
21,750 |
35,780 |
36 |
17 |
53 |
|||||||||
|
|||||||||||||||
Gross carrying value |
Allowance for losses |
||||||||||||||
($ millions) |
Mortgages |
Loans |
Total |
Mortgages |
Loans |
Total |
|||||||||
Not past due |
13,316 |
20,248 |
33,564 |
— |
— |
— |
|||||||||
Past due: |
|||||||||||||||
Past due less than 90 days |
14 |
— |
14 |
||||||||||||
Past due 90 to 179 days |
— |
— |
— |
— |
— |
— |
|||||||||
Past due 180 days or more |
— |
— |
— |
— |
— |
— |
|||||||||
Impaired |
118 |
36 |
154 |
37 (1) |
16 |
53 |
|||||||||
Total |
13,448 |
20,284 |
33,732 |
37 |
16 |
53 |
(1) |
Includes |
Impaired mortgages and loans, net of allowance for losses, amounted to
Asset Default Provision
We make provisions for possible future credit events in the determination of our insurance contract liabilities. The amount of the provision for asset default included in insurance contract liabilities is based on possible reductions in future investment yields that vary by factors such as type of asset, asset credit quality (rating), duration, and country of origin. To the extent that an asset is written off, or disposed of, any amounts that were set aside in our insurance contract liabilities for possible future asset defaults in respect of that asset are released.
Our asset default provision reflects the provision relating to future credit events for fixed income assets currently held by the Company that support our insurance contract liabilities. Our asset default provision as at
Derivative Financial Instruments
The values of our derivative instruments are set out in the following table. The use of derivatives is measured in terms of notional amounts, which serve as the basis for calculating payments and are generally not actual amounts that are exchanged.
Derivative Instruments
($ millions) |
|
|
||||
Net fair value |
(293) |
236 |
||||
Total notional amount |
50,516 |
48,211 |
||||
Credit equivalent amount |
726 |
738 |
||||
Risk-weighted credit equivalent amount |
7 |
7 |
||||
The total notional amount of derivatives in our portfolio increased to
Capital Management
Our total capital consists of subordinated debt and other capital, participating policyholders' equity, and total shareholders' equity which includes common shareholders' equity and preferred shareholders' equity. As at
The legal entity,
Sun Life Assurance's MCCSR ratio was 216% as at
Normal Course Issuer Bid
On
Risk Management
We use an enterprise Risk Management Framework to assist in categorizing, monitoring, and managing the risks to which we are exposed. The major categories of risk are credit risk, market risk, insurance risk, operational risk, liquidity risk, and business risk. Operational risk is a broad category that includes legal and regulatory risks, people risks, and systems and processing risks.
Through our ongoing enterprise risk management procedures, we review the various risk factors identified in the Framework and report to senior management and to the Risk Review Committee of the Board at least quarterly. Our enterprise risk management procedures and risk factors are described in our annual MD&A and AIF.
When referring to segregated funds in this section, it is inclusive of segregated fund guarantees, variable annuities, and investment products and includes Run-off reinsurance in our Corporate business segment.
Market Risk Sensitivities
Our earnings are affected by the determination of policyholder obligations under our annuity and insurance contracts. These amounts are determined using internal valuation models and are recorded in our Consolidated Financial Statements, primarily as Insurance contract liabilities. The determination of these obligations requires management to make assumptions about the future level of equity market performance, interest rates, credit and swap spreads, and other factors over the life of our products. Differences between our actual experience and our best estimate assumptions are reflected in our Consolidated Financial Statements.
The market value of our investments in fixed income and equity securities fluctuates based on movements in interest rates and equity markets. The market value of fixed income assets designated as AFS that are held primarily in our surplus segment increases (decreases) with declining (rising) interest rates. The market value of equities designated as AFS and held primarily in our surplus segment increases (decreases) with rising (declining) equity markets. Changes in the market value of AFS assets flow through OCI and are only recognized in net income when realized upon sale, or when considered impaired. The amount of realized gains (losses) recorded in net income in any period is equal to the initial unrealized gains (losses) or OCI position at the start of the period plus the change in market value during the current period up to the point of sale for those securities that were sold during the period. The sale or impairment of AFS assets held in surplus can therefore have the effect of modifying our net income sensitivity.
We realized
The following table sets out the estimated immediate impact on or sensitivity of our net income, our OCI, and Sun Life Assurance's MCCSR ratio to certain instantaneous changes in interest rates and equity market prices as at
Interest Rate and Equity Market Sensitivities
As at ($ millions, unless otherwise noted) |
|||||||||||||
Interest rate sensitivity(2)(6) |
100 basis point |
50 basis point |
50 basis point |
100 basis point |
|||||||||
Potential impact on net income(3)(6) |
$ |
(300) |
$ |
(100) |
$ |
50 |
$ |
50 |
|||||
Potential impact on OCI |
$ |
500 |
$ |
250 |
$ |
(250) |
$ |
(500) |
|||||
Potential impact on MCCSR(4) |
12% points |
5% points |
5% points |
9% points |
|||||||||
Equity markets sensitivity(5) |
25% decrease |
10% decrease |
10% increase |
25% increase |
|||||||||
Potential impact on net income(3) |
$ |
(300) |
$ |
(100) |
$ |
100 |
$ |
200 |
|||||
Potential impact on OCI |
$ |
(150) |
$ |
(50) |
$ |
50 |
$ |
150 |
|||||
Potential impact on MCCSR(4) |
5% points |
1% points |
1% points |
2% points |
|||||||||
As at ($ millions, unless otherwise noted) |
|||||||||||||
Interest rate sensitivity(2)(6) |
100 basis point |
50 basis point |
50 basis point |
100 basis point |
|||||||||
Potential impact on net income(3)(6) |
$ |
(400) |
$ |
(100) |
$ |
50 |
$ |
100 |
|||||
Potential impact on OCI |
$ |
500 |
$ |
250 |
$ |
(250) |
$ |
(500) |
|||||
Potential impact on MCCSR(4) |
12% points |
5% points |
4% points |
8% points |
|||||||||
Equity markets sensitivity(5) |
25% decrease |
10% decrease |
10% increase |
25% increase |
|||||||||
Potential impact on net income(3) |
$ |
(250) |
$ |
(50) |
$ |
50 |
$ |
150 |
|||||
Potential impact on OCI |
$ |
(150) |
$ |
(50) |
$ |
50 |
$ |
150 |
|||||
Potential impact on MCCSR(4) |
5% points |
1% points |
1% points |
1% points |
|||||||||
(1) |
Net income and OCI sensitivities have been rounded to the nearest |
||||||||||||||
(2) |
Interest rate sensitivities assume a parallel shift in assumed interest rates across the entire yield curve as at |
||||||||||||||
(3) |
The market risk sensitivities include the estimated mitigation impact of our hedging programs in effect as at |
||||||||||||||
(4) |
The MCCSR sensitivities illustrate the impact on Sun Life Assurance as at |
||||||||||||||
(5) |
Represents the respective change across all equity markets as at |
||||||||||||||
(6) |
The majority of interest rate sensitivity, after hedging, is attributed to individual insurance products. We also have interest rate sensitivity, after hedging, from our fixed annuity and segregated funds products. |
Our net income sensitivity to interest rate declines has decreased since
Credit Spread and Swap Spread Sensitivities
We have estimated the immediate impact or sensitivity of our reported net income attributable to certain instantaneous changes in credit and swap spreads. The credit spread sensitivities reflect the impact of changes in credit spreads on our asset and liability valuations (including non-sovereign fixed income assets, provincial governments, corporate bonds, and other fixed income assets). The swap spread sensitivities reflect the impact of changes in swap spreads on swap-based derivative positions and liability valuations.
Credit Spread Sensitivities ($ millions, after-tax)
Net income sensitivity(1)(2) |
50 basis point decrease |
50 basis point increase |
||
|
(125) |
125 |
||
|
(100) |
125 |
(1) Sensitivities have been rounded to the nearest |
(2) In most instances, credit spreads are assumed to revert to long-term insurance contract liability assumptions generally over a five-year period. |
Swap Spread Sensitivities ($ millions, after-tax)
Net income sensitivity(1) |
20 basis point decrease |
20 basis point increase |
||
|
75 |
(75) |
||
|
75 |
(75) |
(1) Sensitivities have been rounded to the nearest |
The credit and swap spread sensitivities assume a parallel shift in the indicated spreads (i.e., equal shift across the entire spread term structure). Variations in realized spread changes based on different terms to maturity, geographies, asset class/derivative types, underlying interest rate movements, and ratings may result in realized sensitivities being significantly different from those provided above. The credit spread sensitivity estimates exclude any credit spread impact that may arise in connection with asset positions held in segregated funds. Spread sensitivities are provided for the consolidated entity and may not be proportional across all reporting segments. Refer to the section Additional Cautionary Language and Key Assumptions Related to Sensitivities for important additional information regarding these estimates.
Most of our expected sensitivity to interest rate risk is derived from our general account insurance and annuity products. We have implemented market risk management strategies to mitigate a portion of the market risk related to our general account insurance and annuity products.
Individual insurance products include universal life and other long-term life and health insurance products. Major sources of market risk exposure for individual insurance products include the reinvestment risk related to future premiums on regular premium policies, asset reinvestment risk on both regular premium and single premium policies, and the guaranteed cost of insurance. Interest rate risk for individual insurance products is typically managed on a duration basis, within tolerance ranges set out in the applicable investment policy or guidelines. Targets and limits are established so that the level of residual exposure is commensurate with our risk appetite. Exposures are monitored frequently, and assets are re-balanced as necessary to maintain compliance within policy limits using a combination of assets and derivative instruments. A portion of the longer-term cash flows are backed with equities and real estate.
For participating insurance products and other insurance products with adjustability features, the investment strategy objective is to provide a total rate of return given a constant risk profile over the long term.
Fixed annuity products generally provide the policyholder with a guaranteed investment return or crediting rate. Interest rate risk for these products is typically managed on a duration basis, within tolerance ranges set out in the applicable investment guidelines. Targets and limits are established such that the level of residual exposure is commensurate with our risk appetite. Exposures are monitored frequently, and are re-balanced as necessary to maintain compliance within prescribed tolerances using a combination of fixed income assets and derivative instruments.
Certain insurance and annuity products contain minimum interest rate guarantees. Market risk management strategies are implemented to limit potential financial loss due to reductions in asset earned rates relative to contract guarantees. These typically involve the use of hedging strategies utilizing interest rate derivatives such as interest rate floors, swaps, and swaptions.
Certain insurance and annuity products contain features which allow the policyholders to surrender their policy at book value. Market risk management strategies are implemented to limit the potential financial loss due to changes in interest rate levels and policyholder behaviour. These typically involve the use of hedging strategies such as dynamic option replication and the purchase of interest rate swaptions.
Certain products have guaranteed minimum annuitization rates. Market risk management strategies are implemented to limit the potential financial loss and typically involve the use of fixed income asset, interest rate swaps, and swaptions.
Segregated Fund Guarantees
Approximately one half of our expected sensitivity to equity market risk and a small amount of interest rate risk sensitivity is derived from segregated fund products. These products provide benefit guarantees, which are linked to underlying fund performance and may be triggered upon death, maturity, withdrawal, or annuitization. The cost of providing for the guarantees in respect of our segregated fund contracts is uncertain and will depend upon a number of factors including general capital market conditions, our hedging strategies, policyholder behaviour, and mortality experience, each of which may result in negative impacts on net income and capital.
The following table provides information with respect to the guarantees provided in our segregated fund businesses.
As at |
|||||||||
($ millions) |
Fund value |
Amount at Risk(1) |
Value of guarantees(2) |
Insurance contract liabilities(3) |
|||||
SLF Canada |
13,382 |
142 |
11,140 |
364 |
|||||
SLF U.S. |
5,622 |
270 |
5,646 |
114 |
|||||
Run-off reinsurance(4) |
3,058 |
540 |
2,153 |
578 |
|||||
Total |
22,062 |
952 |
18,939 |
1,056 |
|||||
As at |
|||||||||
($ millions) |
Fund value |
Amount at Risk(1) |
Value of guarantees(2) |
Insurance contract liabilities(3) |
|||||
SLF Canada |
13,039 |
217 |
11,202 |
273 |
|||||
SLF U.S. |
5,194 |
259 |
5,236 |
96 |
|||||
Run-off reinsurance(4) |
2,800 |
501 |
1,999 |
526 |
|||||
Total |
21,033 |
977 |
18,437 |
895 |
(1) |
The Amount at Risk represents the excess of the value of the guarantees over fund values on all policies where the value of the guarantees exceeds the fund value. The Amount at Risk is not currently payable as the guarantees are only payable upon death, maturity, withdrawal, or annuitization if fund values remain below guaranteed values. |
(2) |
For guaranteed lifetime withdrawal benefits, the value of guarantees is calculated as the present value of the maximum future withdrawals assuming market conditions remain unchanged from current levels. For all other benefits, the value of guarantees is determined assuming 100% of the claims are made at the valuation date. |
(3) |
The insurance contract liabilities represent management's provision for future costs associated with these guarantees and include a provision for adverse deviation in accordance with Canadian actuarial standards of practice. |
(4) |
The Run-off reinsurance business includes risks assumed through reinsurance of variable annuity products issued by various North American insurance companies between 1997 and 2001. This line of business is part of a closed block of reinsurance, which is included in the Corporate segment. |
The movement of the items in the table above from
(i) |
fund values increased due to favourable equity market movements and the weakening of the Canadian dollar against the U.S. dollar, partially offset by the natural run-off of the block; |
(ii) |
the Amount at Risk decreased due to favourable equity market movements, partially offset by the weakening of the Canadian dollar; |
(iii) |
the total value of guarantees increased mainly due to the weakening of the Canadian dollar, partially offset by the natural run-off of the block; and |
(iv) |
insurance contract liabilities increased due to unfavourable interest rate movement and the weakening of the Canadian dollar, partially offset by favourable equity market movements. |
Segregated Fund Hedging
We have implemented hedging programs, involving the use of derivative instruments, to mitigate a portion of the cost of interest rate and equity market-related volatility in providing for segregated fund guarantees. As at
The following table illustrates the impact of our hedging program related to our sensitivity to a 50 basis point and 100 basis point decrease in interest rates and 10% and 25% decrease in equity markets for segregated fund contracts as at
Impact of Segregated Fund Hedging
|
||||||||
($ millions) |
Changes in interest rates(3) |
Changes in equity markets(4) |
||||||
Net income sensitivity(1)(2) |
50 basis point decrease |
100 basis point decrease |
10% decrease |
25% decrease |
||||
Before hedging |
(200) |
(450) |
(200) |
(550) |
||||
Hedging impact |
200 |
450 |
150 |
450 |
||||
Net of hedging |
— |
— |
(50) |
(100) |
||||
|
||||||||
($ millions) |
Changes in interest rates(3) |
Changes in equity markets(4) |
||||||
Net income sensitivity(1)(2) |
50 basis point decrease |
100 basis point decrease |
10% decrease |
25% decrease |
||||
Before hedging |
(200) |
(400) |
(150) |
(500) |
||||
Hedging impact |
200 |
400 |
150 |
400 |
||||
Net of hedging |
— |
— |
— |
(100) |
(1) |
Net income sensitivities have been rounded to the nearest |
(2) |
Since the fair value of benefits being hedged will generally differ from the financial statement value (due to different valuation methods and the inclusion of valuation margins in respect of financial statement values), this will result in residual volatility to interest rate and equity market shocks in reported income and capital. The general availability and cost of these hedging instruments may be adversely impacted by a number of factors, including volatile and declining equity and interest rate market conditions. |
(3) |
Represents a parallel shift in assumed interest rates across the entire yield curve as at |
(4) |
Represents the change across all equity markets as at |
Real Estate Risk
We are exposed to real estate risk arising from fluctuations in the value of, or future cash flows on, real estate classified as investment properties. We may experience financial losses resulting from the direct ownership of real estate investments or indirectly through fixed income investments secured by real estate property, leasehold interests, ground rents, and purchase and leaseback transactions. Real estate price risk may arise from external market conditions, inadequate property analysis, inadequate insurance coverage, inappropriate real estate appraisals, or from environmental risk exposures. We hold direct real estate investments that support general account liabilities and surplus, and fluctuations in value will impact our profitability and financial position. An instantaneous 10% decrease in the value of our direct real estate investments as at
Additional Cautionary Language and Key Assumptions Related to Sensitivities
Our market risk sensitivities are measures of our estimated change in net income and OCI for changes in interest rates and equity market price levels described above, based on interest rates, equity market prices, and business mix in place as at the respective calculation dates. These sensitivities are calculated independently for each risk factor, generally assuming that all other risk variables stay constant. The sensitivities do not take into account indirect effects such as potential impacts on goodwill impairment or valuation allowances on deferred tax assets. The sensitivities are provided for the consolidated entity and may not be proportional across all reporting segments. Actual results can differ materially from these estimates for a variety of reasons, including differences in the pattern or distribution of the market shocks, the interaction between these risk factors, model error, or changes in other assumptions such as business mix, effective tax rates, policyholder behaviour, currency exchange rates, and other market variables relative to those underlying the calculation of these sensitivities. The potential extent to which actual results may differ from the indicative ranges will generally increase with larger capital market movements. Our sensitivities as at
We have also provided measures of our net income sensitivity to instantaneous changes in credit spreads, swap spreads, real estate price levels, and capital sensitivities to changes in interest rates and equity price levels. The real estate sensitivities are non-IFRS financial measures. For additional information, see Use of Non-IFRS Financial Measures. The cautionary language which appears in this section is also applicable to the credit spread, swap spread, real estate, and MCCSR ratio sensitivities. In particular, these sensitivities are based on interest rates, credit and swap spreads, equity market, and real estate price levels as at the respective calculation dates and assume that all other risk variables remain constant. Changes in interest rates, credit and swap spreads, equity market, and real estate prices in excess of the ranges illustrated may result in other-than-proportionate impacts.
As these market risk sensitivities reflect an instantaneous impact on net income, OCI, and Sun Life Assurance's MCCSR ratio, they do not include impacts over time such as the effect on fee income in our asset management businesses.
The sensitivities reflect the composition of our assets and liabilities as at
The sensitivities are based on methods and assumptions in effect as at
Our hedging programs may themselves expose us to other risks, including basis risk (i.e., the risk that hedges do not exactly replicate the underlying portfolio experience), derivative counterparty credit risk, and increased levels of liquidity risk, model risk, and other operational risks. These factors may adversely impact the net effectiveness, costs, and financial viability of maintaining these hedging programs and therefore adversely impact our profitability and financial position. While our hedging programs include various elements aimed at mitigating these effects (e.g., hedge counterparty credit risk is managed by maintaining broad diversification, dealing primarily with highly rated counterparties, and transacting through
For the reasons outlined above, these sensitivities should only be viewed as directional estimates of the underlying sensitivities of each factor under these specialized assumptions, and should not be viewed as predictors of our future net income, OCI, and capital sensitivities. Given the nature of these calculations, we cannot provide assurance that actual impact will be consistent with the estimates provided.
Information related to market risk sensitivities and guarantees related to segregated fund products should be read in conjunction with the information contained in the Outlook, Critical Accounting Policies and Estimates, and Risk Management sections in our annual MD&A and in the Risk Factors and Regulatory Matters sections in our AIF.
Legal and Regulatory Matters
Information concerning legal and regulatory matters is provided in our Annual Consolidated Financial Statements, annual MD&A, and AIF, for the year ended
Changes in Accounting Policies
We have not adopted any new and amended IFRS in the current period ended
Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of the Company's financial reporting and the preparation of its financial statements in accordance with IFRS.
There were no changes in the Company's internal control over financial reporting during the period which began on
Reconciliation of Non-IFRS Financial Measures
Additional information on the use of non-IFRS measures, including the definition of operating net income (loss) and underlying net income (loss), is available in this document under the heading Use of Non-IFRS Financial Measures.
The following table sets out the amounts that were excluded from our operating net income (loss), underlying net income (loss), operating EPS, and underlying EPS, and provides a reconciliation to our reported net income (loss) and EPS based on IFRS.
Reconciliations of Select Net Income Measures
Quarterly results |
||||||
($ millions, unless otherwise noted) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
|
Reported Net income |
441 |
502 |
435 |
425 |
400 |
|
Impact of certain hedges in SLF Canada that do not qualify for hedge accounting |
15 |
(6) |
2 |
(8) |
5 |
|
Fair value adjustments on share-based payment awards at MFS |
(20) |
1 |
(31) |
(44) |
(51) |
|
Restructuring and other related costs |
— |
(4) |
(3) |
(11) |
(8) |
|
Operating net income (loss) |
446 |
511 |
467 |
488 |
454 |
|
Market related impacts |
(22) |
(21) |
(54) |
(22) |
(26) |
|
Assumption changes and management actions |
(48) |
172 |
4 |
11 |
40 |
|
Underlying net income (loss) |
516 |
360 |
517 |
499 |
440 |
|
Reported EPS (diluted) ($) |
0.72 |
0.81 |
0.71 |
0.69 |
0.65 |
|
Impact of certain hedges in SLF Canada that do not qualify for hedge accounting ($) |
0.02 |
(0.01) |
— |
(0.01) |
0.01 |
|
Fair value adjustments on share-based payment awards at MFS ($) |
(0.03) |
— |
(0.05) |
(0.07) |
(0.08) |
|
Restructuring and other related costs ($) |
— |
(0.01) |
— |
(0.02) |
(0.01) |
|
Impact of convertible securities on diluted EPS ($) |
— |
— |
— |
(0.01) |
(0.01) |
|
Operating EPS (diluted) ($) |
0.73 |
0.83 |
0.76 |
0.80 |
0.74 |
|
Market related impacts ($) |
(0.03) |
(0.04) |
(0.09) |
(0.03) |
(0.04) |
|
Assumption changes and management actions ($) |
(0.08) |
0.28 |
0.01 |
0.02 |
0.06 |
|
Underlying EPS (diluted) ($) |
0.84 |
0.59 |
0.84 |
0.81 |
0.72 |
Management also uses the following non-IFRS financial measures:
Return on equity. IFRS does not prescribe the calculation of ROE and therefore a comparable measure under IFRS is not available. To determine operating ROE and underlying ROE, operating net income (loss) and underlying net income (loss) are divided by the total weighted average common shareholders' equity for the period, respectively.
Adjusted revenue. This measure excludes from revenue the impact of: (i) exchange rate fluctuations, from the translation of functional currencies to the Canadian dollar, for comparisons ("Constant Currency Adjustment"); (ii) Fair value and foreign currency changes on assets and liabilities ("FV Adjustment"); and (iii) reinsurance for the insured business in SLF Canada's GB operations ("Reinsurance in SLF Canada's GB Operations Adjustment"). Adjusted revenue is an alternative measure of revenue that provides greater comparability across reporting periods.
Quarterly results |
||||||
($ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
|
Revenues |
7,332 |
7,375 |
5,614 |
6,315 |
6,460 |
|
Constant Currency Adjustment |
307 |
72 |
(31) |
(25) |
— |
|
FV Adjustment |
2,495 |
2,196 |
495 |
1,560 |
1,921 |
|
Reinsurance in SLF Canada's GB Operations Adjustment |
(1,185) |
(1,154) |
(1,130) |
(1,120) |
(1,161) |
|
Adjusted revenue |
5,715 |
6,261 |
6,280 |
5,900 |
5,700 |
Adjusted premiums and deposits. This measure adjusts premiums and deposits for the impact of: (i) the Constant Currency Adjustment and (ii) the Reinsurance in SLF Canada's GB Operations Adjustment. Adjusted premiums and deposits is an alternative measure of premiums and deposits that provides greater comparability across reporting periods.
Quarterly results |
||||||
($ millions) |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
|
Premiums and deposits |
36,754 |
31,770 |
29,124 |
28,876 |
32,710 |
|
Constant Currency Adjustment |
3,513 |
783 |
(300) |
(236) |
— |
|
Reinsurance in SLF Canada's GB Operations Adjustment |
(1,185) |
(1,154) |
(1,130) |
(1,120) |
(1,161) |
|
Adjusted premiums and deposits |
34,426 |
32,141 |
30,554 |
30,232 |
33,871 |
Pre-tax operating profit margin ratio for MFS. This ratio is a measure of the underlying profitability of MFS, which excludes certain investment income and commission expenses that are offsetting. These amounts are excluded in order to neutralize the impact these items have on the pre-tax operating profit margin ratio, as they are offsetting in nature and have no impact on the underlying profitability of MFS.
Impact of foreign exchange. Several IFRS financial measures are presented on a constant currency adjusted basis to exclude the impact of foreign exchange rate fluctuations. These measures are calculated using the average or period end foreign exchange rates, as appropriate, in effect at the date of the comparative period.
Real estate market sensitivities. Real estate market sensitivities are non-IFRS financial measures for which there are no directly comparable measures under IFRS so it is not possible to provide a reconciliation of these amounts to the most directly comparable IFRS measures.
Other. Management also uses the following non-IFRS financial measures for which there are no comparable financial measures in IFRS: (i) ASO premium and deposit equivalents, mutual fund sales, managed fund sales, life and health sales, and total premiums and deposits; (ii) AUM, mutual fund assets, managed fund assets, other AUM, and assets under administration; (iii) the value of new business, which is used to measure the estimated lifetime profitability of new sales and is based on actuarial calculations; and (iv) assumption changes and management actions, which is a component of our sources of earnings disclosure. Sources of earnings is an alternative presentation of our Consolidated Statements of Operations that identifies and quantifies various sources of income. The Company is required to disclose its sources of earnings by its principal regulator, the Office of the Superintendent
Forward-looking Statements
From time to time, the Company makes written or oral forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements contained in this document include (i) statements relating to our strategies, (ii) statements that are predictive in nature or that depend upon or refer to future events or conditions, and (iii) statements that include words such as "aim", "anticipate", "assumption", "believe", "could", "estimate", "expect", "goal", "initiatives", "intend", "may", "objective", "outlook", "plan", "project", "seek", "should", "strategy", "strive", "target", "will", and similar expressions. Forward-looking statements include the information concerning our possible or assumed future results of operations. These statements represent our current expectations, estimates, and projections regarding future events and are not historical facts. Forward-looking statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. Future results and shareholder value may differ materially from those expressed in these forward-looking statements due to, among other factors, the matters set out in this document under the headings Capital Management and Risk Management and in
Factors that could cause actual results to differ materially from expectations include, but are not limited to: business risks - economic and geo-political risks; risks in implementing business strategies; changes in legislation and regulations, including capital requirements and tax laws; the inability to maintain strong distribution channels and risks relating to market conduct by intermediaries and agents; risks relating to operations in
The Company does not undertake any obligation to update or revise its forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, except as required by law.
Earnings Conference Call
The Company's first quarter 2015 financial results will be reviewed at a conference call on
Consolidated Statements of Operations
For the three months ended |
|||||||||||
(unaudited, in millions of Canadian dollars except for per share amounts) |
|
|
|||||||||
Revenue |
|||||||||||
Premiums |
|||||||||||
Gross |
$ |
3,723 |
$ |
3,638 |
|||||||
Less: Ceded |
1,516 |
1,410 |
|||||||||
Net premiums |
2,207 |
2,228 |
|||||||||
Net investment income (loss): |
|||||||||||
Interest and other investment income |
1,279 |
1,188 |
|||||||||
Fair value and foreign currency changes on assets and liabilities |
2,495 |
1,921 |
|||||||||
Net gains (losses) on available-for-sale assets |
96 |
57 |
|||||||||
Net investment income (loss) |
3,870 |
3,166 |
|||||||||
Fee income |
1,255 |
1,066 |
|||||||||
Total revenue |
7,332 |
6,460 |
|||||||||
Benefits and expenses |
|||||||||||
Gross claims and benefits paid |
3,430 |
3,203 |
|||||||||
Increase (decrease) in insurance contract liabilities |
3,148 |
2,229 |
|||||||||
Decrease (increase) in reinsurance assets |
(193) |
54 |
|||||||||
Increase (decrease) in investment contract liabilities |
12 |
31 |
|||||||||
Reinsurance expenses (recoveries) |
(1,453) |
(1,325) |
|||||||||
Commissions |
492 |
440 |
|||||||||
Net transfer to (from) segregated funds |
17 |
7 |
|||||||||
Operating expenses |
1,180 |
1,123 |
|||||||||
Premium taxes |
70 |
61 |
|||||||||
Interest expense |
72 |
87 |
|||||||||
Total benefits and expenses |
6,775 |
5,910 |
|||||||||
Income (loss) before income taxes |
557 |
550 |
|||||||||
Less: Income tax expense (benefit) |
95 |
117 |
|||||||||
Total net income (loss) |
462 |
433 |
|||||||||
Less: Net income (loss) attributable to participating policyholders |
(5) |
4 |
|||||||||
Shareholders' net income (loss) |
467 |
429 |
|||||||||
Less: Preferred shareholders' dividends |
26 |
29 |
|||||||||
Common shareholders' net income (loss) |
$ |
441 |
$ |
400 |
|||||||
Earnings (loss) per share |
|||||||||||
Basic |
$ |
0.72 |
$ |
0.66 |
|||||||
Diluted |
$ |
0.72 |
$ |
0.65 |
Consolidated Statements of Financial Position
As at |
|||||||||
(unaudited, in millions of Canadian dollars) |
2015 |
2014 |
|||||||
Assets |
|||||||||
Cash, cash equivalents and short-term securities |
$ |
6,744 |
$ |
6,818 |
|||||
Debt securities |
70,713 |
66,214 |
|||||||
Equity securities |
5,551 |
5,223 |
|||||||
Mortgages and loans |
35,727 |
33,679 |
|||||||
Derivative assets |
2,378 |
1,839 |
|||||||
Other invested assets |
2,686 |
2,375 |
|||||||
Policy loans |
3,000 |
2,895 |
|||||||
Investment properties |
6,260 |
6,108 |
|||||||
Invested assets |
133,059 |
125,151 |
|||||||
Other assets |
4,052 |
3,429 |
|||||||
Reinsurance assets |
4,583 |
4,042 |
|||||||
Deferred tax assets |
1,280 |
1,230 |
|||||||
Property and equipment |
577 |
555 |
|||||||
Intangible assets |
932 |
895 |
|||||||
Goodwill |
4,242 |
4,117 |
|||||||
Total general fund assets |
148,725 |
139,419 |
|||||||
Investments for account of segregated fund holders |
89,667 |
83,938 |
|||||||
Total assets |
$ |
238,392 |
$ |
223,357 |
|||||
Liabilities and equity |
|||||||||
Liabilities |
|||||||||
Insurance contract liabilities |
$ |
107,966 |
$ |
101,228 |
|||||
Investment contract liabilities |
2,864 |
2,819 |
|||||||
Derivative liabilities |
2,671 |
1,603 |
|||||||
Deferred tax liabilities |
217 |
155 |
|||||||
Other liabilities |
10,071 |
9,725 |
|||||||
Senior debentures |
2,849 |
2,849 |
|||||||
Subordinated debt |
2,184 |
2,168 |
|||||||
Total general fund liabilities |
128,822 |
120,547 |
|||||||
Insurance contracts for account of segregated fund holders |
81,821 |
76,736 |
|||||||
Investment contracts for account of segregated fund holders |
7,846 |
7,202 |
|||||||
Total liabilities |
$ |
218,489 |
$ |
204,485 |
|||||
Equity |
|||||||||
Issued share capital and contributed surplus |
$ |
10,804 |
$ |
10,805 |
|||||
Retained earnings and accumulated other comprehensive income |
9,099 |
8,067 |
|||||||
Total equity |
$ |
19,903 |
$ |
18,872 |
|||||
Total liabilities and equity |
$ |
238,392 |
$ |
223,357 |
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