Sun Life Financial (SLF) 23rd NBF Annual Financial Service Conference summary

Reflections on leadership and organizational culture

• Celebrated 160 years in business and 25 years as a public company, highlighting longevity and resilience.

• Strategic pivot to capital-light, low interest rate sensitive businesses has proven effective.

• Growth in private asset management and successful acquisitions have strengthened the franchise.

• Culture of inclusivity and strong industry partnerships is a key differentiator.

• Supportive executive team helped navigate early challenges, including an earnings miss.

Capital deployment and acquisition strategy

• Nearly $6 billion deployed in M&A, with strategy not dependent on further acquisitions.

• Capital priorities: organic reinvestment (especially digital and AI), strong dividend payout, then inorganic opportunities.

• Share buybacks are considered attractive in the current market, though historically less active.

• M&A must be accretive, core to strategy, and executable; patient approach to capital deployment.

• No material gaps in current business lines; focus on strategic, adjacent tuck-in acquisitions if opportunities arise.

U.S. group business: dental and stop-loss

• Medicaid dental exposure is primarily pediatric, limiting risk from potential cuts.

• Medicaid decisions are state-driven, making broad cuts unlikely; minimal vulnerability expected.

• Stop-loss business saw increased claim severity in Q4, driven by late-stage cancer diagnoses, higher birth rates, and rising medical costs.

• Pricing has been adjusted by 14%, with another 2% planned to restore target margins.

• Loss ratios expected to improve and stabilize as repricing takes effect.