Sun Life Financial (SLF) Scotiabank’s 27th Annual Financials Summit summary

Medium-term targets and business mix

• Targets include 10% earnings growth, 20%+ ROE, and 40–50% dividend payout, with current ROE at 19.1% and confidence in reaching 20% driven by growth in Asia, asset management, and U.S. business improvements.

• Asset management now represents 35% of the business, with a focus on expanding alternatives and maintaining a strong mix across regions.

• Asia's ROE is improving as scale builds, especially in Hong Kong, India, and the Philippines.

U.S. business: stop-loss and dental

• U.S. stop-loss business remains a consistent earnings driver, with only one challenging quarter in recent years; annual repricing and scale support resilience.

• Medical inflation and incident growth are managed through pricing, with recent 16% price increases and ongoing process improvements.

• Dental business faces margin pressure from state pricing; focus is shifting to profitable commercial segments and selective state partnerships.

• Commercial dental is prioritized for growth, leveraging new networks and technology, while state business is approached cautiously.

Asset management strategy and integration

• Alternatives platform unified under new leadership, aiming for top-line synergies and expense efficiencies, with $200B AUM and a 20% earnings growth target.

• Management equity plan increased team ownership to 22%, aligning incentives for long-term growth.

• Integration of acquired firms and a single distribution platform are expected to drive growth and margin improvement.

• Collaboration with wealth businesses and external partners like Scotiabank supports asset flows and new mandates.