Sun Life Financial Inc. (NYSE:SLF) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 10:00 am ET


Sun Life Financial Inc. (NYSE:SLF) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen. My name is Andrew, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sun Life Financial Q4 2019 Financial Results Conference Call. [Operator Instructions]

The host of the call is Leigh Chalmers, Senior Vice President, Head of Investor Relations and Capital Management. Please go ahead, Ms. Chalmers.

Leigh Chalmers

Thank you, Andrew, and good morning, everyone. Welcome to Sun Life Financial's Earnings conference call for the fourth quarter of 2019. Our earnings release and the slides for today's call are available on the Investor Relations section of our website at We will begin today's presentation with an overview of our fourth quarter results by Dean Connor, President and Chief Executive Officer of Sun Life Financial. Following Dean's remarks, Kevin Strain, Executive Vice President and Chief Financial Officer, will present the financial results for the quarter. After the prepared remarks, we'll move to the question-and-answer portion of the call. Other members of management will also be available to answer your questions on today's call. Turning to slide two. I draw your attention to the cautionary language regarding the use of forward-looking statements and non-IFRS measures, which form part of today's remarks. As noted in the slides, forward-looking statements may be rendered inaccurate by subsequent events.

And with that, I'll turn things to Dean.

Dean A. Connor

Thanks, Leigh, and good morning, everyone. Turning to slide four. We made good progress in the quarter. The company reported underlying net income of $792 million, up 10% over the fourth quarter of 2018. We generated an underlying return on equity of 15% in Q4, while continuing to deploy capital in a disciplined way, with the announcement of the InfraRed Capital transaction and a new 15-year bancassurance distribution arrangement in Vietnam. In the fourth quarter, we grew wealth sales by 24% over the prior year. Insurance sales grew 7% over the prior year, including particular strength in Asia where we grew sales by 43% on a constant currency basis, with double-digit growth in six of our seven local markets. The value of new business, or VNB grew by 9%, reflecting higher sales, partially offset by changes in sales mix, pricing and the impact of lower interest rates. On a full year basis, underlying net income exceeded the $3 billion mark for the first time, and underlying earnings per share grew 6%, excluding the onetime impact of interest on par seed capital in Q1 of 2018, underlying EPS grew by 10% in 2019.

For the full year, we achieved an underlying return on equity of 14.3% and returned over $1.8 billion of capital to shareholders through a combination of dividends and share repurchases. There were a number of notable achievements in the fourth quarter, as highlighted on slide four. I will touch on some of these as I take just a few minutes to step back and reflect on the progress we made in 2019, moving Sun Life closer to our ambition of being one of