SLF

Sun Life Financial Inc. reported second-quarter 2026 net income of C$1.03 billion, up from C$735 million a year earlier, while also announcing executive changes, including the planned 2027 transition of board chair and a July 2026 shift in senior management roles. The company paired these results with a maintained common dividend of C$0.96 per share, ongoing preferred share dividends, and completion of a share repurchase tranche, underscoring continued capital returns to shareholders. We’ll now examine how Sun Life’s stronger quarterly earnings and continued capital return plans may influence its existing investment narrative. AI is about to change healthcare. These 7 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. To own Sun Life today, you need to believe its diversified insurance, asset management and U.S. health businesses can keep generating solid earnings while managing pressure points in U.S. Dental and asset management flows. The latest quarter’s stronger profit, steady dividend and modest buybacks support this view, but do not materially change the near term risk that U.S. Dental and Medicaid pricing could still weigh on margins if conditions stay challenging. The most relevant recent update is Sun Life’s C$1.03 billion Q2 2026 net income, up from C$735 million a year earlier, alongside double digit underlying EPS growth and better insurance and asset management trends. These results give the company more room to keep investing in problem areas like U.S. Dental while maintaining capital returns, which may be important if segment level earnings remain uneven and consensus expectations prove too optimistic. Yet beneath these strong headline numbers, investors should still pay close attention to how ongoing Medicaid pricing constraints could... Read the full narrative on Sun Life Financial (it's free!) Sun Life Financial’s narrative projects CA$48.5 billion revenue and CA$4.7 billion earnings by 2029. Uncover how Sun Life Financial's forecasts yield a CA$112.93 fair value, in line with its current price. Some of the most cautious analysts were assuming Sun Life would reach about C$49.2 billion of revenue and C$4.7 billion of earnings by 2029, which bakes in more pressure on margins and valuation than the recent results imply. Compared with the consensus view, that is a much more pessimistic take on how risks like U.S. Dental and asset management could play out, so you may want to weigh these weaker assumptions against the latest earnings surprise and ask whether your own expectations sit closer to the bullish or the bearish camp. Explore 2 other fair value estimates on Sun Life Financial - why the stock might be worth just CA$112.93! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Sun Life Financial research is our analysis highlighting 3 key rewards that could impact your investment decision. Our free Sun Life Financial research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sun Life Financial's overall financial health at a glance. Our top stock finds are flying under the radar-for now. Get in early: Find 11 companies with promising cash flow potential yet trading below their fair value. Explore 24 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. Uncover the next big thing with 8 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SLF.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 10:00 a.m. ET Senior Vice President, Capital Management and Investor Relations - Natalie Brady President and Chief Executive Officer - Kevin Strain Executive Vice President and Chief Financial Officer - Tim Deacon President, Sun Life U.S. - David Healy Operator: Good morning. Welcome to the Sun Life Financial Q2 2026 conference call. My name is Gaylene. I will be your conference operator today. All lines have been placed on mute to prevent any background noise. The conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. The host of your call today is Natalie Brady, Senior Vice President, Capital Management and Investor Relations. Please go ahead, Ms. Brady. Natalie Brady: Thank you. Good morning, everyone. Welcome to Sun Life's earnings call for the second quarter of 2026. Our earnings release and the slides for today's call are available on the investor relations section of our website at sunlife.com. We will begin today's call with opening remarks from Kevin Strain, President and Chief Executive Officer. Following Kevin, Tim Deacon, Executive Vice President and Chief Financial Officer, will present the financial results for the quarter. After the prepared remarks, we will move to the question and answer portion of the call. Other members of management are also available to answer your questions this morning. Turning to slide two, I draw your attention to the cautionary language regarding the use of forward-looking statements and non-IFRS financial measures, which form part of today's remarks. As noted in the slides, forward-looking statements may be rendered inaccurate by subsequent events. With that, I'll now turn things over to Kevin. Kevin Strain: Thanks, Natalie. Good morning, everyone. Turning to slide five, we delivered strong second quarter results with double-digit underlying EPS growth, reflecting higher earnings across our businesses and continued progress against our strategic priorities. Strength in Canada, Asia, and U.S. all contributed to growth, while asset management continues to build momentum. Underlying net income was CAD 1.12 billion, up from CAD 1.02 billion last year. Underlying EPS was CAD 2.02, up 13% over the prior year. Underlying return on equity was 19.1%. Reported net income was CAD 1.01 billion, compared with CAD 716 million a year ago. Strong protection earnings were driven by growth in all insurance business groups. Canada delivered record results reflecting strong business growth and favorable experience. In Asia, earnings increased from continued business growth. In the U.S., health and risk solutions continue to perform well, while in-force management delivered strong earnings driven by favorable investments and insurance results. In Sun Life Asset Management, SLC Management earnings increased year-over-year, supported by improved fundraising and deployment momentum, while MFS delivered consistent earnings. We also delivered strong top-line performance across the organization. Insurance sales increased 20%, driven by growth in Asia and continued strength in the U.S. Asset management net flows and net wealth sales improved by CAD 16.3 billion, supported by strong private credit fundraising and a large mandate win in our Aditya Birla Sun Life Asset Management business. The scale and brand recognition from this mandate amplifies our growth strategy for asset management in India. At MFS, outflows remained elevated, reflecting continued industry-wide pressure on active U.S. equity managers. Our capital position remains strong. We ended the quarter with a LICAT ratio of 145% and holding company cash of CAD 2.3 billion, reflecting the strength and resilience of our business. During the quarter, we renewed our normal course issuer bid to repurchase up to 10 million common shares and began purchasing shares under the program. Our strong capital position and cash generation continue to provide flexibility to invest in our business while returning capital to shareholders. Overall, this was a strong quarter that reflected the strength of our purpose, our disciplined execution, our business growth across key markets, and the resilience of our diversified model. Turn to slide six. Let me touch on a few areas where we're seeing notable momentum. First, our digital transformation journey. We made significant progress this quarter. At an enterprise level, we recently announced our founding membership in an AI consortium alongside Scotiabank, Telus, and Lightworks. The AI consortium is a collaborative effort to build the infrastructure, governance, and controls needed to deploy AI responsibly at scale in regulated industries. It is helping us accelerate AI adoption in a way that's consistent with the governance standards clients and regulators expect while sharing costs with other major regulated Canadian institutions. In addition, to help technology architecture teams make informed decisions faster, we launched a new proprietary agentic AI platform. It has already freed up time by replacing the manual process of trade-off analysis with structured, data-driven, and scalable decision making. Beyond these enterprise initiatives, we're deploying AI solutions that deliver tangible benefits for clients and advisors. In Indonesia, we launched AI in our contact centers to enhance the client experience service through using advanced routing, analytics, and monitoring capabilities to improve responsiveness and first call resolution. More broadly across Asia, we also launched tools in our agency channel that accelerate advisor onboarding and support higher quality service through real-time coaching, strengthening client interactions, and enhancing the onboarding experience. In Canada, we enhanced My Sun Life app with integrated health capabilities, creating a more connected digital experience and bringing health benefits, services, and support together in one place. We also launched an AI-powered concierge for SLFD advisors, enabling faster access to information and the ability to address complex inquiries, helping advisors spend more time focused on advice and client relationships. Our responsible approach to AI is helping us improve client experiences, operate more efficiently, and scale our businesses while keeping clients at the center. Turn to asset and wealth management. We've now completed our first full quarter of Sun Life Asset Management operating as a unified platform. We've retained strong talent, continue to deliver strong results for our clients, and remain focused on realizing the full potential of our combined capabilities. Our strength in alternatives and our local expertise in new markets continue to be a driver of growth for Sun Life Asset Management. Crescent closed the largest direct lending in its history with $10.8 billion of investable capital, reflecting the strength of its platform and investor relationships. Crescent and Pantheon also closed a $3.2 billion private credit continuation vehicle in the first half of the year, marking the largest transactions in the private credit secondaries market. In India, Aditya Birla Sun Life Asset Management won a large fixed income mandate for a government sponsor, doubling their assets under management to $113 billion. At MFS, while we continue to experience outflows, our active ETFs continue to gain traction, generating inflows more than triple the prior year, with AUM having now doubled since the start of 2026 to $3 billion. In our Canadian business, wealth sales increased 60%, supported by record defined contribution sales, strong rollover activity, and higher mutual fund sales. These examples show the scale and momentum we're building in asset management and the breadth of solutions we're able to provide to a range of clients. Looking to Asia, momentum accelerated across the region. Sales increased 20% to CAD 875 million, reflecting broad-based growth across the region. Hong Kong continued to perform well, with sales increasing 20%, driven by growth across all distribution channels and a 28% increase in advisors to nearly 4,000. Indonesia was another standout this quarter. Sales increased 69%, demonstrating the ongoing success of our expanded CIMB partnership. We also saw strong growth in India and Malaysia, reflecting attractive market conditions and solid execution by our local teams. What stands out to me is the breadth of growth. It's coming from multiple markets and multiple channels. That's important because it creates a more resilient, higher quality growth profile over time. As a result, total CSM now exceeds CAD 7 billion, up over 90% since the adoption of IFRS 17 and providing a strong foundation for future earnings growth. In the U.S., we delivered strong sales results and continued to expand services offered to our members. Medical stop loss sales increased 86% over last year, reflecting disciplined pricing, strong underwriting, and continued success in winning attractive business. We continue to benefit from our scale and capabilities in this market while maintaining our focus on risk-adjusted returns. This quarter, we expanded our suite of health solutions to provide differentiated support for employers and members. Through a new partnership, we're providing access to clinical trials for people facing complex health conditions. Enhancing the solutions available to support access to care, improve health outcomes, and help people through serious health challenges remains a core part of our strategy. In dental, we continue to focus on improving profitability through ongoing portfolio management activities across our government business, growth in our commercial business, disciplined expense management, and continued execution. While there is still work to do, we continue to make progress. Turning to slide seven, we're continuing to perform well against our medium-term objectives. Underlying EPS growth was 13%, above our target of 10%. Underlying ROE was 19.1%, approaching our target of 20%. Our dividend ratio was 48%, within our target range of 40%-50%. Supported by these strong fundamentals, our diversified business strategy strengthened both asset management and insurance and our industry-leading LICAT ratio, we remain well positioned to continue delivering sustainable, broad-based earnings growth over the medium term. I'll now turn it over to Tim to go through the financials for the quarter. Tim Deacon: Thanks, Kevin, and good morning, everyone. Turning to slide nine, we delivered strong second quarter results with underlying net income of CAD 1.12 billion and underlying earnings per share of CAD 2.02. Results were driven by strong contributions from Canada, Asia, and the U.S. and continued momentum in Sun Life Asset Management. Reported net income was CAD 1.01 billion. The difference between underlying and reported net income was primarily driven by acquisition and integration related costs in SLC in the U.S., intangible asset amortization, and modestly unfavorable net market impacts. Market impacts reflected yield curve movements during the quarter, real estate returns that were positive but below long-term expectations, and strong public equity market performance in the quarter. Turning to slide 10. Sun Life Asset Management underlying net income of $262 million increased 4% year-over-year, mainly driven by earnings growth at SLC. Favorable seed investment performance and disciplined expense management improved fee-related earnings margins in the quarter. At MFS, higher average net assets supported earnings growth and profit margins improved by 0.6% despite continued fee rate pressure. Reported net income increased 14% from market experience at SLC and also reflects the offsetting impacts of accelerated amortization of certain compensation expenses for retirement-eligible employees at MFS and a gain on the sale of a $1.3 billion block of closed-end funds. The compensation item reflects the timing and recognition of expenses rather than the change in total compensation costs. Capital raising of $4.7 billion and deployment activity of $6.2 billion remains strong across the platform, up 8% and 42% respectively, particularly within our private credit and fixed income strategies. MFS continued to experience net outflows during Q2 from increased industry-wide pressure on active equity managers from the increasing popularity of lower tracking error strategies. In parallel, the business continues to see momentum in its ETF businesses with $0.6 billion of retail inflows and two new ETF launches this quarter, alongside continued growth in fixed income and retail SMA products. Turning to slide 11. Canada underlying net income of CAD 427 million, a new record, increased 23% from the prior year. Favorable insurance experience was a significant contributor to earnings in the quarter, reflecting both seasonality and sustainable benefits from the investments we've made over time in our people, processes, and capabilities. Canada's wealth businesses increased underlying earnings by over 19%, driven by growth in AUM. Reported net income of CAD 443 million reflects favorable market related impacts. Canada's wealth platform reached CAD 286 billion in assets under management and administration, up 18% from last year as a result of record sales in the defined contribution business, increased volumes in the rollover business, and strong equity market performance. Insurance sales were broadly consistent with the prior year in both Sun Life Health and individual insurance, reflecting timing of large deals and sales campaigns. Turning to slide 12, we're demonstrating solid progress and growth in our U.S. business. Underlying net income increased 15%, driven by business growth in medical stop loss earnings, and favorable investment results and insurance experience in-force management. Reported net income increased 69% from the prior year, driven by a prior year intangible impairment charge in dental and the increase in underlying net income. In stop loss, sales increased 86% year-over-year, reflecting strong close ratios and pricing discipline supported by our risk selection approach. Growth continues to be supported by our differentiated health and risk solutions, advanced analytics capabilities, and continued focus on risk selection. In dental, we continue to reposition the business by improving pricing, exiting unprofitable contracts, optimizing our expense base, and growing our commercial dental business. These actions contributed to improved loss ratios this quarter. Medicaid membership declined 9%, reflecting our deliberate actions to terminate unprofitable contracts, as well as ongoing industry-wide dynamics. Commercial dental sales increased 10% in the quarter, reflecting progress in building a stronger business mix. As we continue to execute against these priorities, we expect gradual improvement in earnings over time. Turning to slide 13. Asia had another outstanding quarter with underlying net income increasing 21% over the prior year, driven by robust organic CSM growth, lower expenses, and improved credit experience. Reported net income increased 158% from the prior year, driven by market related impacts and the increase in underlying net income. Asia individual insurance sales of CAD 875 million were up 20%, primarily from strong growth across Hong Kong and our bancassurance channels in India, Malaysia and Indonesia. Hong Kong delivered insurance sales growth of 20% year-over-year across all channels, supported by expansion of the advisor force by 28% to nearly 4,000 advisors. Indonesia achieved 69% sales growth, reflecting the continuing momentum from our bancassurance partnership with CIMB Niaga. New business CSM declined year-over-year, primarily reflecting the competitive environment in Hong Kong. Although margins were lower than a year ago, they remained strong. Turning to our capital position on slide 14. We ended the quarter with a LICAT ratio of 145%, which increased two percentage points over the prior quarter, mainly driven by a CAD 750 million sub-debt issuance at the lowest spread for a seven-year issuance in the Canadian financial sector in the last 25 years. This is a testament to the quality of Sun Life in the debt markets. We delivered book value per share growth of 3% to CAD 42.49 and finished the quarter with a financial leverage ratio of 23.8%. Organic capital generation was 41%, which exceeds our 30%-40% range of guidance. Total CSM of CAD 15.3 billion increased 12% over Q2 last year, driven by strong insurance sales. Together, these metrics reinforce our financial strength and provide resilience in more volatile periods. Turning to slide 15. In the quarter, we returned half a billion dollars to shareholders through common shareholder dividends, delivering a dividend yield of 3.8%. We also renewed our normal course issuer bid to repurchase up to 10 million shares in June, and we purchased 0.8 million shares to date under the program. In closing, we are very pleased with our second quarter results, which demonstrate the earnings power of our business. Our strong balance sheet and capital position provides flexibility to invest in growth, support our clients, and return capital to shareholders. Looking ahead, we remain focused on executing our Client Impact Strategy and delivering sustainable long-term value for shareholders. With that, I'll turn it back to Kevin for some closing remarks. Kevin Strain: Thanks, Tim. As I mark five years as CEO, I see this quarter as another proof point of our work to build a more diversified, global, and growth-oriented Sun Life. The company delivered strong earnings growth in line with medium-term objectives. Our diversified global business, strong capital position, and disciplined execution continue to enable progress in areas that matter most for long-term value creation. Across our organization, we remain anchored by our purpose: helping clients achieve lifetime financial security and live healthier lives. Broad-based growth across Canada, Asia, and U.S. health and risk solutions, combined with accelerating asset management momentum, is showing up clearly in earnings growth. We remain confident in our ability to continue creating sustainable value for clients and shareholders. With that, I'll turn it over to Natalie for the Q&A portion of the call. Natalie Brady: Thank you, Kevin. To help ensure that all participants have an opportunity to ask questions this morning, please limit yourselves to one or two questions and then re-queue with any additional questions. I will now ask the operator to poll the participants. Operator: Thank you. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question comes from Gabriel Dechaine with National Bank. Please go ahead. Gabriel Dechaine: Hey, good morning. My question's on the U.S. business, both the stop loss and the dental. On stop loss, I forget what page in the slides, it says unfavorable experience due to seasonal reserve build. Kind of, I don't know. The phrasing of that seems odd. If it's seasonal, wouldn't you have anticipated that or is there actually a variance here versus what you normally do? Because everybody is focused on the stop loss stuff. David Healy President, Sun Life U.S. Gabriel. Thanks for the question. It's David. So the Q2 results do include known seasonality from the buildup of IBNR reserves. That is what is in that unfavorable morbidity line. You could consider it unfavorable but expected. The experience was still in line with our expectations despite this, so morbidity in the quarter was impacted by or, sorry, it was mostly because of the IBNR build. We maintained our target loss ratios, the morbidity experience overall is a little bit higher in that unexpected line than a year ago, just reflecting the larger book due to the stronger growth year-over-year over the past several quarters. The loss ratios remain stable within our target range in the mid-70s, and which is a very strong result. Overall, the stop loss business continues to perform very well and in line with our expectations. I guess you said it, and I don't quite get that. Unfavorable but expected. If it's expected, why is it unfavorable? You should have a lower short-term insurance profit number in the quarter or something like that. Is that not how it works? David Healy President, Sun Life U.S. The IBNR reserves do build over the course of the year, just because claims don't pay out at the same time the premiums come in, so it's just a matter of timing. No, I get that. We can move on. The dental business, I understand the strategy there. You've clearly articulated it. Just want to get a sense for how much more business is there to shed, and what's the timeline for that, like the intermediated or brokered Medicaid business? David Healy President, Sun Life U.S. Yeah. As was noted, dental results were pressured in the quarter predominantly driven by lower membership, which was down 9% year-over-year. We are making progress in dental, and our pricing discipline on new business and decisions to exit unprofitable existing business are driving improvements in the loss ratio. But as you noted, there are ongoing significant volume headwinds in our Medicaid dental business, and that's consistent with the broader market, which will suppress dental earnings this year. We remain focused on shifting towards a more profitable mix as we reshape that government book of business and continue to grow our commercial dental. Our broader plans, of course, include optimizing our expense base and continue to stay focused on disciplined expense management. We expect these actions to start to shift our business mix over to a more stable, higher quality earnings base, but over the next one to two years. No, I understand the strategy, and you're articulating it. If next quarter the Medicaid premiums drop CAD 150 million, or I'm just making up a number, but people have to kind of get a sense of the glide path here so we can avoid negative surprises. I don't know if you can give a sense of that direction or the timing of it. In one or two years, sure. But how much of this business is going to be shifted away? David Healy President, Sun Life U.S. It's a good question. The activities that we are taking are unlikely to fully offset the Medicaid volume-related pressures we're seeing over the near term. As a reminder, Q3 is seasonally the highest quarter for utilization of the year prior to the start of the school year, and then Q4 is relatively lower utilization quarter. We do expect the membership to remain lower this year. Then we're looking ahead to the broader market dynamics that are in 2027. Okay. Thank you. Kevin Strain: David, it's Kevin. I want to maybe just add a quick thing on this. I watch David and his team. They're fixing the fundamentals of the state business. It is going to be a fundamentally smaller part of what we do on the dental side, building. Gabriel Dechaine: Yep Kevin Strain: Out the commercial, which is going to take a number of years to build the commercial. There is more and more focus on that, building out the commercial side of the dental business. I'd also say on the overall U.S. results are really strong in the quarter. It reflects what David and the team are doing to build that out. Exactly what we said would happen on stop loss. We were seeing the pricing hardening. We were winning more of that. It's coming in at roughly the ratios we would have thought. I'm actually quite pleased with how the stop loss and benefits business is doing. I'm pleased with the progress they're making on the dental side. The state business is going to be a struggle. It's going to be a struggle for a number of years. The focus is shifting over to the commercial side. That's very clear. It's very deliberate. I see them making progress there. That's where you should be measuring the progress. I wouldn't have high expectations of the state business for a number of years because it's a number of years building it out. Gabriel Dechaine: Yeah. All right, thanks. Enjoy the weekend. Operator: The next question is from Mike Ward with UBS. Please go ahead. Mike Ward: Hi. Thank you. Good morning. I was just wondering if you could discuss the stop-loss sales result. Just thought that was super strong, and I've got to imagine you guys are pretty confident on the margins on new and renewal business. I'm just wondering if you could kind of characterize the competitive environment. Is it easier to win new business given the hard market and some people are pulling back or are you being more aggressive in growth? David Healy President, Sun Life U.S. Yeah, Mike, it's David again. Thanks for the question. Yeah. We, first of all, remain diligent and disciplined in our pricing and underwriting approach, which has led to our scale and leading market position. We certainly are benefiting from all the work we're doing in underwriting and advanced analytics around our risk selection and our decision making. Our differentiated health capabilities are also notable because that focus on cost containment is increasingly resonating in the market as employers are more focused than ever on ways to manage overall medical cost increases. We are benefiting from a continued hard market, and our approach to pricing and underwriting, along with those capabilities, they really position us well over the longer term. In terms of margins, we remain focused on our margins, and we have that disciplined approach. David Healy President, Sun Life U.S. If you look at our performance over the last little while, the 1-1-25 cohort is now largely complete. It's 97% complete and in line with our expectations, and we continue to get the pricing on our 2026 business. It's probably worth noting that sales in the first half of 2025 were a little lower than our typical growth rate due to what were competitive pressures at the time. Now, as I said, the market has been hardening later in the year and into 2026. Thank you. That's helpful. I was wondering in Asia, could you discuss the sustainability of the strength there and maybe any thoughts on the kind of focus on the MCV business in Hong Kong by China? Manjit Singh: Okay. Good morning, Mike. It's Manjit. Maybe I'll start with your second question. In terms of our Hong Kong business, let me just start with a bit of context on that business. As you've seen, the business has delivered exceptional performance over the last few years. In fact, we've outperformed our peers, and we've gained market share over that period. That's been supported by deliberate investments we've made in distribution, brand, talent, and IT, as well as strong execution. The fundamentals of the business are very strong. We have a very diversified business across all dimensions. In distribution, we sell through banca, broker, and agency. We provide client solutions to meet protection, savings, and retirement needs, and our clients include local Hong Kong clients from Southeast Asia as well as MCV. In terms of the MCV client base, that makes up roughly about 30% of our overall client base in Hong Kong, and obviously that'll change a little bit quarter to quarter depending on the mix. In terms of how we serve that client base, we really focus on providing specific needs for them, and that includes higher rates of return, diversification of investments, as well as access to products to help them with legacy planning and wealth preservation needs. I know there's some focus on the tax element of this, but that hasn't really been the key focus of what they're looking for when they come and talk to us. Fundamentally, I think the business is in very good shape, and I feel that we have good momentum and that will continue. Mike Ward: Thank you. Operator: The next question is from Doug Young with Desjardins. Please go ahead. Doug Young: Hi. Good morning. Just going to Canada, can you, Jessica, talk a little bit about the experience this quarter, which was favorable. It is not as favorable as it has been in the past, but it is noticeably improved the PAA growth. In general, Canada is generating, I think, year-to-date about a 34% ROE. Is this division punching above its weight or just trying to get a sense of the sustainability of this because it is a big part of the Sun Life story here. Jessica Tan: Yeah. Hi, Doug. This is Jessica. Thank you. Let me talk about the insurance experience for this particular quarter, I will talk a bit about more sustainability if you zoom out and look across. I think for this quarter, you see a significant experience gains. About a third of that is from mortality, two-thirds of that is morbidity. I think from the morbidity standpoint, we benefit from actually sustained and very purposeful investments in people, processes, and capabilities, such that not only we have actually lower claims volume, shorter claims duration, but also while maintaining actually pricing discipline and to be competitive as well. Some of the things that we have taken to kind of get the sustained results would be things, for example, it is not just individual case managers, but it is actually an integrated case management team supported by actually health practitioners. We made actually a lot of significant investments in different tailored processes between different cases, and you have different nudges and digitized experience so that for the members, as they navigate through this very difficult journey, that they are able to do this seamlessly. Things like digital forms with the help of practitioners. We actually made a lot of investments and reduced that. We have tailored nudges, helping actually health practitioners to nudge so that they will be better in the recovery journey. These are things that we have been purposefully doing for the past few years, which is why you see this. Zooming out about sustainability, if you look at the past 8 quarters, we have had a positive insurance experience, on average about CAD 57 million every quarter pre-tax. I think that is something that is quite sustainable. It is as reflected because we have been very disciplined. What we write in our CSM and risk adjustments are solid. While there are variations quarter to quarter, we do expect to continue every quarter to have a positive experience in the insurance side. I think maybe one more point, while if you zoom out beyond the insurance experience, you hear from Tim's opening remarks that actually if you look at this half of the year, overall, Canada has actually improved its earnings by 15%. Only 5% of that is actually from the insurance experience. The remaining 10% came from actually strong growth across all three parts of our businesses. Insurance grew at 6%. You see our CSM continued strong growth. Health, if you look at the other short-term insurance line, actually grew by 11%. Most importantly, I think our wealth asset management business that Tim alluded to is now CAD 286 billion of AUMA. The earnings actually in this half of the year went up by 26%, 18% of which is credited to both favorable market but also positive inflows. This quarter, we had CAD 1.4 billion of net inflows. The other kind of remaining 7% growth is due to efficiencies and economies of scale, which you would expect as you build a wealth asset management that would benefit from the scale that we get. I think sustainability-wise, we are very confident that Canada is punching above the 6 plus, and I emphasize on the plus, percentage medium-term objective. Doug Young: Very wholesome. I appreciate that. Just one quick one, Tim. The $350 million price for Bell, I think 80% of that is being settled in stock in Q3. I assume that's at a fixed stock price, given your share price has gone up a lot, just because it'll lower the amount of shares you have to issue. I'm just kind of curious as to assume that's fixed stock price that was set at, but just thought I'd clarify. Tim Deacon: Hi, Doug, this is Tim. You're correct. The Bell acquisition, we completed that at the beginning of July, and almost 80% of that purchase price was made in shares, and it was based on the 20 days leading up to the closing price. It was on the average share price during that period. That was just shy of CAD 400 million overall for the total purchase, and it was about 3.6 million shares. Doug Young: Okay. Tim Deacon: That's already been issued, and it's complete, and the amount's fixed. Yep. Doug Young: That's in Q3 then? Tim Deacon: Yeah, it'll show up in Q3. Doug Young: Yeah. Tim Deacon: It's a subsequent event in our financials. Because it closed in July, we'll start to pick up the earnings from that business in the third quarter. Doug Young: Perfect. Appreciate it. Thank you. Operator: The next question is from David Andrich with Jefferies. Please go ahead. David Andrich: Good morning, everyone. Thank you for taking my questions. Just wanted to follow up on Doug's question around the experience gains in Canada, just based upon the response, it sounds like you're kind of expecting the positive trend to continue, and to see that come through. The second part to that was some of your peers have experienced some headwinds from long-term disability experience and just doesn't seem to be anything coming through in your results. Just wondering if you could comment on that, on your experience specifically. Thank you. Jessica Tan: Thank you. We do expect that I think the insurance experience line to continue to be positive. There'll be fluctuations quarter to quarter due to season and other factors. As I mentioned, if you look at the past eight quarters, it doesn't matter which period you look at, average is about CAD 57 million pre-tax, CAD 41 million post-tax. I think there will be fluctuations within every quarter, but I think that we expect to be continue to have that positive number. I think in terms of the long-term disability trends, I think some of the trends in the market has been there for quite some time. For example, since COVID, we've already had 40% of them claims due to mental wellness and stuff. That's not something new. I think this is one that all of us in the industries have been diligently working on. I think the long-term kind of results, one is about pricing discipline while remaining competitive, and that's one that we try to do. Two, as I mentioned, because of the short-term and the long-term disability, we're talking about multi-year journey. These are purposeful and sustained investments. It's not one single thing, but it's really all the things I described about the people, the processes, and the capabilities that we've made investments across. For example, one of the things that I think will continue to help improve the outcomes for our members is last year, we had a pilot for all of Ontario on disability management for 20% of our business. There were some of the technical platform and processes and nudges that I mentioned, this year we start rollout to the whole country. I think we'll continue to be diligent in helping our members get to better outcomes. David Andrich: Great. Thank you very much. Operator: The next question is from Nick Lu with Evercore. Please go ahead. Nick Lu: Good morning. Thanks for taking my question. My first one was a quick follow-up on Asia. Should I read the earlier comment as in the MCV business represent about 30% of total sales out of Hong Kong? How have the local bank insurance partners been reacting to the updates whether on taxes or the broader cross-border capital flow? Thank you. Manjit Singh: Good morning, Nick. It's Manjit. Yes, you're correct. The figure I quoted was 30% of the total Hong Kong sales. I think in terms of the bank insurance partners, we have a very strong bank insurance agreement with Dah Sing. I think obviously with some of the new requirements put in place, there's sort of even more diligence that all banks are putting on in terms of account openings, and we're seeing that across the industry. Nick Lu: Thank you. My follow-up is on the stop loss business in the U.S. Are we at a stage where you think you have an early view into what kind of rate increases that you're thinking about going to 1-1-27 cohort? Some of your large U.S. peers also noted some favorable experience on 2026 book relative to 2024 and 2025, and was wondering if you are seeing something directionally similar as well. Thank you. David Healy President, Sun Life U.S. Hi, Nick, it's David. Thanks for the question. Yeah. Obviously we're monitoring very carefully the emergence of experience on the 1-1-26 cohort. It's still early in that process. It's about 15% complete. Our underlying technical analysis and our underlying emerging actual experience are certainly giving us a lot of confidence in terms of our pricing approach and how we're approaching that. We'll continue to monitor that as the dynamic can change over the course of the year. We remain very focused, and very confident based on our proprietary advanced analytics models and our risk evaluation that we'll continue to focus on that as the year progresses. Thank you. Operator: The next question is from Paul Holden with CIBC. Please go ahead. Paul Holden: Thank you. Good morning. I want to continue with the line of questioning on stop loss. Premiums are up 25% year-over-year. You say that margins or loss ratio is in line with your expectation. I would have expected based on the top-line growth and then with, I don't know if it's stable to improving margins, that you would've seen more of an earnings lift, right? That's the way the basic math should work. Unless you're getting more conservative on IBNR, I'm not really sure why we're not seeing more earnings growth out of stop loss. Maybe you can help address that for us. David Healy President, Sun Life U.S. Sure. Certainly, we're benefiting from the momentum we have, both in sales and persistency, and we're seeing that in our solid earnings result. Obviously, in our benefits business overall we also have our employee benefits business. When you look at that portion of the business, it is down from what was a record quarter in Q2 of 2025, where we saw really very favorable disability experience. Consistent with broader industry trends, that sort of reverted back towards more what we would expect to be normal trends for the foreseeable future, and we're paying close attention to that. Those are all in our health and benefits results overall. We're very confident in our position, and we remain very diligent in our approach with stop loss and continuing to monitor how the year is progressing. Okay. What you're suggesting is you are seeing good earnings growth and stop loss is just masked by lower earnings in the employee benefits business. David Healy President, Sun Life U.S. Yeah. Again, we did have really a record quarter in the employee benefits business in Q2 of 2025, that was partially on the back of really great experience, there were some also one-time items in there that didn't recur this year. Okay. Got it. Wanted to ask a question on Asia, I guess for Manjit. Another quarter, very strong APE sales, I think 19% overall. When I looked at the new business CSM, I think it was actually down year-over-year and down 7%. Maybe you can help us understand the disconnect there. Manjit Singh: Yeah. Good morning, Paul. It's Manjit. Maybe just again, I'll zoom out a bit and then go to your question. If you look at over the last two years, Asia has delivered very strong new business CSM growth. In fact, over that two-year period, we've delivered over CAD 2 billion in new business CSM. We've had exceptional performance last year. You'll recall, some of that was due to some tailwinds we were experiencing with some of the proposed regulation changes that pulled in the volumes. That with the higher volumes, you saw an increase in new business margins. With that behind us, those margins have evened out, which is why you're seeing a relative evening out of the new business CSM margins. At an overall nominal level, we still generated CAD 277 million in new business CSM. I'm very pleased with those levels, and those levels will support ongoing earnings growth for Asia. Paul Holden: Okay. I try to unpack that then. It's kind of a little bit of expenses maybe catching up to volume because volume's again still higher. I don't know if it's just expenses growing or mix changing. Manjit Singh: Yeah. I think it's a bit of mix, but it's also for the level we're growing our expenses as well. But we got higher volumes last year relative to the expense base that we had. Paul Holden: Okay. That makes sense. Thank you. Thanks for the time. Operator: The next question is from Tom MacKinnon with BMO Capital. Please go ahead. Tom MacKinnon: Yeah, thanks. Two questions. First, on Asia, just with respect to your high net worth business there, underlying earnings and sales were up nicely in the second quarter. What proportion of these high net worth clients, just maybe in terms of the dollar amount of sales would be from China and would there be any impact as a result of some of the offshore trust implications that we're seeing out of China and offshore investments? Would that have any impact on the continued momentum we're seeing here in high net worth sales and earnings in Asia? Manjit Singh: Good morning, Tom. It's Manjit. For that business, it's actually a lower proportion than I referenced earlier for Hong Kong. For our high net worth business, it's an international business including clients from Southeast Asia, the Middle East, other parts of Asia. The MCV is really only about 10% of that business. Overall, I don't expect that to have a material impact on the contributions on the high net worth business. Tom MacKinnon: Okay, thanks. Just with respect to SLC. You know in a transition year, I think you've talked about 20% medium term outlook for underlying earnings growth in that business. If I look in the quarter here, flows are better, but the fee related revenue, fee related earnings are kind of flat year-over-year. What would you point to give you confidence that the setup here is good and that we should be able to, by 2027, start to get closer to this 20% growth that you're talking about? What would you tell investors to look for with respect to SLC? Steve Peacher: Yeah. Hey, Tom, it's Steve Peacher. Thanks for the question. Well, at the end of the day, I think this business is driven by, this is not surprising, first and foremost driven by having strong performance in strategies that the market wants, goes without saying. That manifests itself in growing positive net flows, growing AUM. If you do that and you do a good job managing your expense base, you're going to have growing profits. I think if you think about the underlying drivers, if you think about the core categories where we have strategies across real estate, real estate debt, private credit in different forms and different geographies and infrastructure, all those have tailwinds. All those are growing categories in the institutional space. Of course, we haven't raised significant money in the wealth space, but it's a big priority of ours. We think it's going to be a huge driver of flows over the coming years in the wealth space. We've got the products and we've put the distribution in place, and we think we're going to benefit from that. We've got underlying tailwinds. We feel like we got the right products, and we feel like wealth is going to kick in over the coming years. The other thing is, internally, until we got to the put calls in March, SLC was really a collection of businesses side by side operating independently. That was very intentional because as we bought BGO, as we bought Crescent, as we invested in InfraRed, it was very important in my view, and I think in some IC view, that we demonstrate to the employees and to their clients that we were going to let those teams manage their businesses exactly the way Sun Life has let MFS manage its business for the last 40 years. Now that those put calls are done, all the employee incentives are aligned at the SLC level right next to Sun Life. We can now operate this as a platform and an enterprise. We think internally, that's going to allow us to pursue expense efficiencies that we haven't spent any time pursuing until now. I think as we present ourself in the market and we present ourself as a platform like a Blackstone or like an Apollo or like an Ares, we think that's going to be an accelerant to growth as well. We've got institutional clients who've invested with BGO and who've invested with Crescent, and I'm not even sure they know that those two companies are connected because we haven't approached it that way, and now we can. We're four months into that. We're moving as quickly as possible, thinking about how we combine distribution systems. We're thinking about branding, et cetera. I think that's going to be an accelerant to growth as well. Tom MacKinnon: To paraphrase, it seems asset growth and that would be flows. Would you expect the second half of 2026 to be better than the CAD 8 billion in net inflows you saw in the second half of 2025? With respect to efficiency, should we be looking for the pre-tax net operating margin to start picking up? It's been kind of flat here over the last four quarters or so. Steve Peacher: Well, I would say on the quarterly flows, I think you've got to look at this over a multi-year basis because our business is largely institutional, which means our quarterly flows fluctuate significantly based on when you have fund closes. For example, in this quarter, I think as Kevin mentioned, we had a big close in what we call CDL IV, Crescent CDL, Crescent Direct Lending IV. Those can be lumpy. Your flows and your fundraising change a lot quarter to quarter by asset class and can be lumpy. I think if you follow us throughout this year but also in 2027, 2028, I would strongly expect that you are going to see a pickup in those flows quarter to quarter as we grow the business and we grow AUM, we also fully expect that margin should expand significantly. Partly as we grow AUM, we should get the benefits of scale, also now that we can operate as an enterprise, we think we can become more efficient from an expense standpoint. I think we put in our midterm targets that we would expect margins to expand significantly over the coming years. Tom MacKinnon: Is there any margin target that you had given? Just if you could remind us that. Steve Peacher: We expect operating margin to be over 30% over the coming years. If you look over the next five years, I would expect that to be in the mid 30% range or higher. Tom MacKinnon: Okay. Thanks very much. Operator: The next question is from Mario Mendonca with TD Securities. Please go ahead. Mario Mendonca: Manjit, if we could just go back to, I got a little distracted when you were answering one of the questions. Did you lay out the proportion of Hong Kong sales that relate to MCV? Manjit Singh: Yes, Mario. It was 30%. Mario Mendonca: 30%, okay. In response to Paul's question, I think I understand your answer, but I want to just follow up with something. When you see the decline in CSM generated in the quarter relative to the sales, it immediately makes me think that the pricing environment, the pricing was different this quarter from the previous year. Where I'm going with this is, were there any pricing concessions or specials on particular products in the quarter? If there were, why did you feel the need to do that this particular quarter? Manjit Singh: Yeah, I think it's a year-over-year thing. It wasn't necessarily particular to this quarter. I think our products evolve over time, Mario, over the last year. We've introduced different products over that period, and different products are selling with different features, and those have an impact on margins. I think if you pull back and you look at the overall margins we're generating, we're still generating mid-30% margins, which are delivering the lift in ROE you're seeing. We're very pleased with the product lineup that we have. Kevin Strain: Mario, should I take Mario Mendonca: Yeah. Kevin Strain: Sorry, it's Kevin. I just might add, like Hong Kong is a very competitive market. You've got the world's leading insurers that Manjit and team are competing with. We've made up a lot of room in terms of our size in the Hong Kong market over the last few years, which means that we're sometimes even a target now of competitors that are looking at it. We have to do what it takes to continue to grow profitably there. I think Manjit's done that. The profitability is still really good. It was even better probably 12 months ago, but it's still very strong. We're still very pleased with the growth. Remember, too, that our growth there is quite diversified. We continue to grow our agency, we continue to grow in the bank insurance channel, and we continue to grow with brokers. I think that diversification of Hong Kong nationals, Mainland Chinese Visitors, but also people from other parts of Asia that are looking for a Hong Kong dollar or US dollar product. Our reputation continues to grow there. I think we've upset a few of our competitors because in different quarters we've been bigger than them, some names that you'll know here on that you're probably talking to. I think that we have to continue to be competitive. Part of that in Hong Kong is going to be pricing. That's okay as long as we're still continuing to make a margin that's acceptable to us, that's a good return on capital. We believe we're doing that. Mario Mendonca: The reason why this is so relevant to me is if it was a particular quarter, if there was something special about the quarter, I'll be inclined to assume that these CSM margins return to what they have been in the past, which of course drives your CSM and drives the earnings. It does matter if this quarter was special in some way from a pricing perspective. What I can gather from what you've just said, Kevin, is you did what you needed to do this quarter, we shouldn't assume that you have to go to this extent every quarter. Is that right? Kevin Strain: It's not a quarter thing. I think Manjit talked about it. It's a reacting to the markets as they evolve. It wasn't specific to this quarter. We're actually in a really good place, actually. Mario Mendonca: No. I interpret that to mean that the CSM margin could remain low or lower than it has been in the past because the environment's changed. I mean, that's the only way I can interpret that response. Perhaps I can go to something else. Manjit Singh: I think the levels you're seeing right now are kind of appropriate, Mario, in the current competitive environment. Obviously, that could change going forward. I think if you were to look out for the next quarter, I think these kind of levels are appropriate. Mario Mendonca: That's precisely the point then. That feeds into how you grow this company's earnings. That's why I'm asking the question. Moving on to stop loss for a moment. You're growing stop loss at a really nice pace here. Is this the kind of business that benefits from consolidation, or are you better off watching your competitors de-emphasize the business than taking share at margins you prefer? Is this an organic story, or does it lend itself to deals? David Healy President, Sun Life U.S. Mario, it's David. Thanks for the question. We are obviously very proud of our differentiated capabilities in the marketplace, and we're very focused on our organic growth. We think that is the path forward. The proprietary advanced analytic models, the underwriting discipline we have, the risk evaluation that is germane to us is really unique in the marketplace and is helping to differentiate us. It is a short duration business, we feel like we can write this business to continue to grow and find opportunities to take share as the market continues to evolve. It just sounds to me that there's no point in doing deals in this space. You can just take it on your own because you're repricing it every year anyway. That's again, the only way I can interpret that. Kevin Strain: It's not a priority of ours. Mario Mendonca: Yeah. Kevin Strain: Mario, it's Kevin again. That's exactly how I look at it. I think we're a big player. It's genuinely repriceable. We have great capabilities, and we're able to win business over time, and that's the focus there. Mario Mendonca: Finally, government or Medicaid sales in dental were zero this quarter. Is that the new number to focus on? Like this business is no longer for Sun Life. Is that right? David Healy President, Sun Life U.S. Well, as I've said earlier, Mario, we just continue to focus on selling and retaining profitable business that meet our long-term earnings margin targets. Government sales have been and will continue to be lumpy, so we do have a pipeline, of course, but we'll take a disciplined approach to make sure that anything that we do right is going to be helpful to us as we build back earnings over time. Okay. Thank you. Operator: We have no further questions at this time. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Sun Life (SLF) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Sun Life Financial Inc.? Here are five stocks we like better. Sun Life reported strong Q2 2026 results: Underlying net income rose to CAD 1.12 billion, up 10% year over year, while underlying EPS increased 13% to CAD 2.02 and underlying ROE reached 19.1%. The company strengthened its capital position and continued shareholder returns: The LICAT ratio rose to 145%, organic capital generation reached 41%, and Sun Life returned about CAD 500 million through dividends while authorizing repurchases of up to 10 million shares. Growth was broad-based but uneven: Canada, the U.S. and Asia delivered double-digit earnings growth, and asset-management fundraising and deployment increased; however, MFS faced continued net outflows and the U.S. dental business remained under restructuring pressure. Consensus Is These 3 Stocks Are Strong Buys Sun Life Financial (NYSE:SLF) reported second-quarter 2026 underlying net income of CAD 1.12 billion, up from CAD 1.02 billion a year earlier, as earnings increased across its Canadian, Asian and U.S. operations and asset-management businesses. Underlying earnings per share rose 13% year over year to CAD 2.02, while underlying return on equity was 19.1%. Reported net income was CAD 1.01 billion, compared with CAD 716 million in the prior-year quarter. Chief Financial Officer Tim Deacon said the difference between reported and underlying results primarily reflected acquisition and integration costs at SLC Management in the U.S., intangible asset amortization and modestly unfavorable net market impacts. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling “We delivered strong second quarter results with double-digit underlying EPS growth,” President and Chief Executive Officer Kevin Strain said, citing contributions from Canada, Asia and the U.S. as well as continued momentum in asset management. Sun Life ended the quarter with a Life Insurance Capital Adequacy Test, or LICAT, ratio of 145%, up two percentage points from the prior quarter. Deacon said the increase was mainly supported by a CAD 750 million subordinated-debt issuance. Holding-company cash stood at CAD 2.3 billion. → No Hangover: Revisiting Microsoft One Week After Earnings The company generated 41% organic capital, above its 30% to 40% guidance range, and its financial leverage ratio was 23.8%. Book value per share increased 3% to CAD 42.49. Total contractual service margin, or CSM, rose 12% from a year earlier to CAD 15.3 billion, supported by insurance sales growth. Sun Life returned about CAD 500 million to shareholders through common dividends during the quarter, producing a stated dividend yield of 3.8%. The company also renewed its normal course issuer bid in June, authorizing repurchases of up to 10 million common shares. It had purchased 0.8 million shares under the program as of the call. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Sun Life Asset Management reported underlying net income of CAD 262 million, a 4% increase from the prior year, driven mainly by earnings growth at SLC Management. Deacon said favorable seed-investment performance and expense discipline improved fee-related earnings margins, while MFS benefited from higher average net assets and a 0.6% improvement in profit margins despite fee-rate pressure. Capital raising across the platform totaled CAD 4.7 billion, up 8% year over year, while deployment activity increased 42% to CAD 6.2 billion. The company pointed to fundraising and deployment in private credit and fixed-income strategies. Crescent closed its largest direct-lending fund with CAD 10.8 billion of investable capital. Crescent and Pantheon also completed a CAD 3.2 billion private-credit continuation vehicle in the first half. In India, Aditya Birla Sun Life Asset Management won a fixed-income mandate from a government sponsor that doubled its assets under management to CAD 113 billion, according to Strain. MFS continued to experience net outflows amid industry pressure on active U.S. equity managers. However, active exchange-traded funds generated inflows more than triple the prior-year level, with ETF assets under management reaching CAD 3 billion, double the level at the start of 2026. Steve Peacher, executive chair of SLC Management, said the company expects the unified SLC platform to support higher flows, scale benefits and expense efficiencies over time. He said the business expects its operating margin to exceed 30% in coming years and reach the mid-30% range or higher over the next five years. Canada posted record underlying net income of CAD 427 million, up 23% from the prior year. The result included favorable insurance experience, with Executive Vice President and Sun Life Canada President Jessica Tan saying roughly one-third of the gain came from mortality and two-thirds from morbidity. Tan attributed the morbidity result to sustained investments in case management, processes and digital capabilities. She said Canada has produced positive insurance experience in each of the past eight quarters, averaging approximately CAD 57 million pretax per quarter, while cautioning that results may fluctuate by quarter. Canada’s wealth platform reached CAD 286 billion in assets under management and administration, up 18% from a year earlier. Wealth earnings increased more than 19%, aided by asset growth, while net inflows totaled CAD 1.4 billion during the quarter. In the U.S., underlying net income increased 15%, supported by medical stop-loss growth and favorable investment and insurance results in in-force management. Medical stop-loss sales rose 86% year over year, while premiums increased 25%, according to analysts’ questions during the call. David Healy, president of Sun Life U.S., said stop-loss loss ratios remained within the company’s target range in the mid-70s. He said second-quarter results included the expected seasonal buildup of incurred-but-not-reported reserves, while the business remained disciplined in pricing and underwriting amid a hardening market. Dental operations remained a restructuring focus. Medicaid membership fell 9% as Sun Life exited unprofitable contracts and faced broader industry dynamics. Commercial dental sales increased 10%, and Healy said the company expects its efforts to shift toward a more profitable commercial mix to take one to two years. Strain said the government dental business will likely remain a smaller and challenging component of the operation for several years. Asia underlying net income rose 21%, driven by organic CSM growth, lower expenses and improved credit experience. Individual insurance sales climbed 20% to CAD 875 million, led by Hong Kong and bancassurance channels in India, Malaysia and Indonesia. Indonesia sales increased 69%, while Hong Kong sales rose 20% across distribution channels. Manjit Singh, president of Sun Life Asia, said Mainland Chinese Visitors accounted for roughly 30% of Hong Kong sales. He said new-business CSM declined year over year as product mix and a competitive environment affected margins, though margins remained in the mid-30% range. Singh said current margin levels were appropriate for the present competitive environment. Strain said the company remains focused on executing its client impact strategy, expanding its digital and artificial-intelligence capabilities, and using its capital position to support growth and shareholder returns. Sun Life Financial Inc, founded in 1865 and headquartered in Toronto, Ontario, is an international financial services organization that provides a range of insurance, wealth management and asset management solutions. The company serves individual and institutional clients, offering products designed to protect against life and health risks, help clients save for retirement, and manage investments on behalf of customers and third parties. Core business activities include life and health insurance, group benefits for employers, retirement and pension products, and wealth management services such as mutual funds and segregated fund solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Sun Life Financial Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Sun Life Financial Inc. SLF delivered second-quarter 2026 underlying earnings of $1.46 per share, beating the Zacks Consensus Estimate of $1.39 by 5%. The bottom line increased 13% year over year. Underlying net income rose 11% to C$1.12 billion, aided by growth across Canada, Asia and the United States. Revenues of $10.09 billion increased 51.9% year over year and surpassed the Zacks Consensus Estimate of $6.46 billion by 56.2%. Group insurance sales jumped 27%, while individual insurance sales increased 16%. Assets under management rose 10% to C$1.70 trillion. Sun Life Financial Inc. price-consensus-eps-surprise-chart | Sun Life Financial Inc. Quote Insurance revenues increased 4.7% year over year to C$6.24 billion ($4.50 billion). Fee income rose 4% to C$2.22 billion ($1.60 billion), while net investment income surged nearly fourfold year over year to C$5.52 billion ($3.98 billion), providing a significant lift to the top line. Underlying insurance service results also improved. The underlying net insurance service result climbed to C$913 million ($659.44 million) from C$760 million, helped by favorable mortality and morbidity experience. Mortality gains reflected fewer claims across Canada, the United States and Asia, while Canada benefited from strong long-term disability experience. Operating expenses and commissions increased 6.2% year over year to C$2.37 billion ($1.71 billion). Canada generated underlying net income of C$427 million ($308.4 million), up 23% year over year. Asset management gross flows and wealth sales increased 60% to more than C$7 billion, driven by large defined-contribution cases, higher rollover volumes and stronger mutual fund sales. Individual insurance sales rose 3% year over year to C$140 million ($101.1 million) while Sun Life Health sales were C$203 million ($146.62 million). The U.S. business posted underlying net income of $164 million, up 15% year over year. Total U.S. sales increased 43% year over year to $324 million. Medical stop-loss sales surged 86% year over year to $225 million, driven by larger cases, strong close rates and disciplined pricing. Employee Benefits sales rose 24% to $67 million, though Dental sales declined 37% year over year to $32 million. Asia underlying net income advanced 18% year over year to C$222 million ($160.34 million), benefiting from sales momentum and in-force growth in Hong Kong, lower expenses and favorable credit experience. The gains were partly offset by lower fee income related to Hong Kong's transition to the centralized eMPF administration platform.Individual insurance sales climbed 19% year over year to C$862 million ($622.6 million), with higher sales in Hong Kong and strong growth in India, Malaysia and Indonesia. Asset management gross flows and wealth sales rose 22% year over year to C$1.1 billion. However, new business contractual service margin declined to C$277 million from C$299 million amid a more competitive environment in Hong Kong. Sun Life Asset Management recorded underlying net income of $262 million, up 4%. MFS Investment Management (MFS) benefited from higher fee income on increased average net assets, while SLC Management gained from higher net seed investment income. MFS' pre-tax net operating margin improved to 35.7% from 35.1%. Asset Management generated $1.5 billion in net inflows, in contrast to $10.9 billion in net outflows a year ago. Solutions & Other recorded $19.7 billion of inflows, helped by a large fixed-income mandate in India, while SLC Management generated $4.6 billion. These inflows more than offset $22.9 billion of MFS outflows. Managed assets increased 7% year over year to $1.03 trillion. Sun Life ended the quarter with a 145% LICAT ratio, compared with 151% a year earlier and 143% in the first quarter. The financial leverage ratio increased to 23.8% from 20.4% a year ago. Book value per common share rose 7% to C$42.49. Total contractual service margin, representing future insurance profit embedded in existing contracts, increased 12% year over year to C$15.3 billion. New business CSM declined 8% year over year to C$400 million ($288.9 million), largely reflecting lower margins in Hong Kong. Underlying return on equity improved to 19.1% from 17.6%, while the underlying dividend payout ratio was 48%, within Sun Life's medium-term target range of 40-50%. Sun Life currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Manulife Financial Corporation MFC reported second-quarter 2026 core earnings of 79 cents per share, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 16% year over year. Revenues of $7.82 billion surpassed the consensus estimate of $7.42 billion by 5.4%. Core earnings were C$1.92 billion ($1.38 billion), up 12% year over year.Net income attributed to shareholders increased C$321 million to C$2.11 billion, aided by favorable market experience. Core return on equity expanded 130 basis points year over year to 16.3%. The expense efficiency ratio improved 100 basis points year over year to 44.5%, indicating positive operating leverage during the quarter.Voya Financial, Inc. VOYA reported second-quarter 2026 adjusted operating earnings of $1.51 per share, missing the Zacks Consensus Estimate of $1.88 by 19.7%. The bottom line declined 38.6% year over year. Revenues of $269 million missed the consensus mark by 4.6%. After-tax adjusted operating earnings fell to $140 million from $240 million in the year-ago quarter. Results included about $40 million of pre-tax severance expenses and a $15 million pre-tax loss tied to alternative investment performance. Consolidated revenues declined 4.3% year over year to $1.90 billion. Fee income increased 7.5% to $620 million, but net investment income fell 8% to $537 million. Premiums remained nearly flat at $716 million. Lincoln National Corporation LNC reported second-quarter 2026 adjusted earnings per share of $2.24, which surpassed the Zacks Consensus Estimate by 12%. The bottom line declined 5.1% year over year. Adjusted operating revenues grew 4.2% year over year to $4.93 billion, surpassing the Zacks Consensus Estimate by 1.4%.LNC's estimated RBC ratio remained above 420% at the end of the reported quarter. Insurance premiums inched up 2% year over year to $1.7 billion, marginally missing the Zacks Consensus Estimate by 0.01%. Fee income was $1.4 billion, which improved 4.3% year over year but missed the consensus mark by 0.4%. Net investment income advanced 10.5% year over year to $1.6 billion and beat the consensus mark by 10.8%. Meanwhile, other revenues of $202 million rose 9.8% year over year in the quarter under review. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sun Life Financial Inc. (SLF) : Free Stock Analysis Report Lincoln National Corporation (LNC) : Free Stock Analysis Report Manulife Financial Corp (MFC) : Free Stock Analysis Report Voya Financial, Inc. (VOYA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Underlying EPS grew 13% year-over-year, driven by record results in Canada and robust organic growth in Asia and the U.S. health business. Asia momentum accelerated with sales up 20%, supported by a 28% expansion of the Hong Kong advisor force and strong bancassurance performance in Indonesia. U.S. Medical Stop Loss sales surged 86%, benefiting from a hardening market and proprietary advanced analytics that improved risk selection and pricing discipline. Sun Life Asset Management completed its first full quarter as a unified platform, focusing on alternatives and private credit where Crescent closed a record $10.8 billion direct lending fund. The company is accelerating AI adoption through a new Canadian consortium to build governance and infrastructure while deploying agentic AI to automate technical decision-making. Canada's record performance was bolstered by favorable morbidity experience and 19% earnings growth in wealth businesses due to higher assets under management. Management is actively repositioning the U.S. Dental business by exiting unprofitable Medicaid contracts and shifting focus toward higher-margin commercial dental segments. Management expects gradual improvement in U.S. Dental earnings over the next one to two years as the business mix shifts toward commercial clients. SLC Management targets operating margin expansion to over 30% in the coming years by leveraging its unified platform for expense efficiencies and scale. Asia's Contractual Service Margin (CSM), now exceeding $7 billion, is expected to provide a stable foundation for future earnings despite competitive pricing pressures in Hong Kong. The 1-1-26 U.S. Stop Loss cohort is currently 15% complete, with early experience giving management confidence in current pricing and margin targets. Canada is expected to continue delivering positive insurance experience gains, though results will fluctuate quarterly around a long-term average of approximately $57 million pre-tax. U.S. Dental membership declined 9% due to deliberate contract terminations and industry-wide Medicaid dynamics, which will continue to suppress earnings in the near term. MFS continues to face elevated outflows, reflecting broader industry pressure on active U.S. equity managers, partially offset by doubling AUM in active ETFs. The Bell acquisition closed in July 2026 for approximately $400 million, with 80% settled via the issuance of 3.6 million shares, impacting Q3 capital metrics. Reported net income was impacted by a gain on the sale of a $1.3 billion block of closed-end funds at MFS. and accelerated amortization of compensation for retirement-eligible employees. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management attributes gains to multi-year investments in integrated case management and digital health nudges that reduced claim durations. While quarterly fluctuations are expected, the company anticipates a consistent positive trend in insurance experience moving forward. Mainland Chinese Visitors (MCV) represent approximately 30% of Hong Kong sales, but management notes these clients prioritize wealth preservation over tax-related features. The High Net Worth business is diversified across Southeast Asia and the Middle East, with MCV accounting for only about 10% of that specific segment. Management confirmed the state-funded Medicaid business will become a "fundamentally smaller" part of the portfolio over the next several years. The focus has shifted entirely to building out the commercial dental side, which is viewed as a higher-quality, more stable earnings base. Now that put-call options are settled, SLC is moving from a collection of independent boutiques to a unified platform to pursue expense efficiencies. Management expects to present a unified brand to institutional clients, similar to major alternative peers, to accelerate fundraising and cross-selling.

Sun Life (SLF) came out with quarterly earnings of $1.46 per share, beating the Zacks Consensus Estimate of $1.39 per share. This compares to earnings of $1.29 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.04%. A quarter ago, it was expected that this financial services company would post earnings of $1.35 per share when it actually produced earnings of $1.38, delivering a surprise of +2.22%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Sun Life, which belongs to the Zacks Insurance - Life Insurance industry, posted revenues of $10.1 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 56.17%. This compares to year-ago revenues of $6.65 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Sun Life shares have added about 31.2% since the beginning of the year versus the S&P 500's gain of 12.8%. While Sun Life has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Sun Life was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.46 on $6.49 billion in revenues for the coming quarter and $5.69 on $27.63 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Life Insurance is currently in the bottom 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sun Life Financial Inc. (SLF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Underlying Net Income: $1.12 billion, up from $1.02 billion in the prior year. Underlying EPS: $2.02, up 13% year-over-year. Underlying Return on Equity: 19.1%. Reported Net Income: $1.01 billion, compared with $716 million a year ago. Insurance Sales: Increased 20%. Asset Management Net Flows and Net Wealth Sales: Improved by $16.3 billion. LICAT Ratio: 145%, up 2 percentage points from the prior quarter. Holding Company Cash: $2.3 billion. Book Value Per Share: $42.49, up 3%. Financial Leverage Ratio: 23.8%. Total CSM: $15.3 billion, up 12% year-over-year. Dividend Ratio: 48%, within the 40% to 50% target range. Canada Underlying Net Income: $427 million, a new record, up 23% from the prior year. U.S. Underlying Net Income: Increased 15%. Asia Underlying Net Income: Increased 21%. Sun Life Asset Management Underlying Net Income: US $262 million, up 4% year-over-year. Asia Individual Insurance Sales: $875 million, up 20%. Hong Kong Insurance Sales: Increased 20%. Indonesia Sales: Increased 69%. Medical Stop-Loss Sales: Increased 86% year-over-year. Capital Raising: US $4.7 billion, up 8%. Deployment Activity: US $6.2 billion, up 42%. Warning! GuruFocus has detected 13 Warning Signs with PAA. Is SLF fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sun Life Financial Inc (NYSE:SLF) delivered strong second-quarter results with underlying EPS growth of 13%, exceeding its medium-term target of 10%. The company reported record results in Canada, with underlying net income up 23% year-over-year, driven by strong business growth and favorable insurance experience. Asia continued its momentum with a 21% increase in underlying net income, supported by broad-based sales growth across Hong Kong, Indonesia, and other markets. Sun Life Financial Inc (NYSE:SLF) strengthened its capital position, ending the quarter with a LICAT ratio of 145% and holding company cash of $2.3 billion, providing flexibility for investments and shareholder returns. Asset management showed improved momentum, with SLC Management earnings up year-over-year, strong private credit fundraising, and a large mandate win in India that doubled assets under management. MFS continued to experience elevated outflows, reflecting industry-wide pressure on active U.S. equity managers, which could weigh on future earnings. The U.S. dental business remains under pressure, with Medicaid membership down 9% and ongoing volume headwinds expected to suppress earnings for the next one to two years. New business CSM in Asia declined year-over-year due to a competitive environment in Hong Kong, with margins expected to remain at lower levels in the near term. The U.S. employee benefits business saw lower earnings compared to a record quarter in Q2 2025, due to a reversion to more normal disability trends and non-recurring one-time items. Sun Life Financial Inc (NYSE:SLF) faces ongoing challenges in its government dental business, which is expected to remain a struggle for several years as the company shifts focus to commercial growth. Q: Can you discuss the sustainability of the strength in Asia, particularly regarding the focus on the MCV business in Hong Kong by China?A: Manjit Singh, President - Sun Life, Asia, stated that the Hong Kong business has delivered exceptional performance over the last few years, outperforming peers and gaining market share, supported by deliberate investments in distribution, brand, talent, and IT. The business is diversified across Banca, broker, and agency channels, serving local Hong Kong clients, those from Southeast Asia, and MCV clients, which make up roughly 30% of the overall client base. The focus for MCV clients is on higher rates of return, diversification of investments, and legacy planning, rather than tax elements. Singh expressed confidence in the business's strong fundamentals and momentum. Q: Can you talk about the favorable experience in Canada this quarter and the sustainability of the division's strong ROE, which is a big part of the Sun Life story?A: Jessica Tan, President - Sun Life, Canada, explained that the significant experience gains were about one-third from mortality and two-thirds from morbidity, benefiting from sustained investments in people, processes, and capabilities, such as integrated case management teams and digital tools. Over the past eight quarters, positive insurance experience has averaged about $57 million pre-tax per quarter, which is considered sustainable. Zooming out, Canada's earnings improved by 15% in the first half, with only 5% from insurance experience and the remaining 10% from strong growth across insurance, health, and wealth businesses. The wealth platform reached $286 billion in AUMA, with earnings up 26%, driven by favorable markets and positive inflows. Q: Regarding the U.S. stop-loss business, premiums are up 25% year-over-year, but why isn't there more of an earnings lift if margins are in line with expectations?A: David Healy, President - Sun Life, US, clarified that while the stop-loss business is benefiting from momentum in sales and persistency, the overall health and benefits results also include the employee benefits business, which was down from a record quarter in Q2 2025 due to very favorable disability experience that reverted to more normal trends. He noted that the 2025 cohort is 97% complete and in line with expectations, and the company continues to get the pricing on its 2026 business, with the market hardening later in the year and into 2026. Q: Can you provide more detail on the U.S. dental business, specifically how much more business there is to shed and the timeline for the Medicaid business?A: David Healy, President - Sun Life, US, stated that dental results were pressured by lower membership, down 9% year-over-year, but progress is being made through pricing discipline and exiting unprofitable business, which is improving loss ratios. However, ongoing significant volume headwinds in the Medicaid dental business will suppress earnings this year. The company expects these actions to shift the business mix to a more stable, higher-quality earnings space over the next one to two years. Kevin Strain, CEO, added that the state business will be a struggle for a number of years, with focus shifting to building out the commercial side, and he wouldn't have high expectations for the state business in the near term. Q: Can you discuss the stop-loss sales result, which was super strong, and characterize the competitive environment and confidence in margins on new and renewal business?A: David Healy, President - Sun Life, US, said the company remains diligent and disciplined in pricing and underwriting, benefiting from scale, advanced analytics, and differentiated health capabilities that resonate with employers focused on managing medical cost increases. The company is benefiting from a continued hard market, and while remaining focused on margins, the 2025 cohort is 97% complete and in line with expectations. He noted that sales in the first half of 2025 were lower due to competitive pressures, but the market has been hardening later in the year and into 2026. Q: With strong APE sales in Asia, why was new business CSM down year-over-year, and is this a pricing issue or something else?A: Manjit Singh, President - Sun Life, Asia, explained that over the last two years, Asia delivered over $2 billion in new business CSM, with exceptional performance last year partly due to tailwinds from proposed regulation changes that pulled in volumes and increased margins. With those tailwinds behind, margins have evened out, leading to a relative evening out of new business CSM. The company still generated $277 million in new business CSM, which will support ongoing earnings growth. Kevin Strain, CEO, added that Hong Kong is a very competitive market, and the company has to do what it takes to continue growing profitably, with pricing being part of that, as long as margins remain acceptable. Q: Can you provide confidence that SLC Management will reach its 20% medium-term underlying earnings growth outlook, given fee-related earnings are flat year-over-year?A: Steve Peacher, Executive Chair - SLC Management, stated that the business is driven by strong performance in strategies the market wants, which manifests in growing positive net flows and AUM. Core categories like real estate debt, private credit, and infrastructure have tailwinds, and the wealth space is a big priority for future flows. Now that the platform is unified, the company can pursue expense efficiencies and present itself as a platform like Blackstone or Apollo, which should be an accelerant to growth. Peacher expects margins to expand significantly, with an operating margin target of over 30% over the coming years, potentially in the mid-30% range or higher over the next five years. Q: Regarding the high net worth business in Asia, what proportion of sales would be from China, and would offshore trust implications impact momentum?A: Manjit Singh, President - Sun Life, Asia, clarified that for the high net worth business, the MCV proportion is lower than the 30% referenced for Hong Kong overall, at only about 10% of that business. The high net worth business includes clients from Southeast Asia, the Middle East, and other parts of Asia, so he does not expect offshore trust implications from China to have a material impact on contributions from this business. Q: Can you clarify the details of the Bell acquisition, including the share settlement and timing?A: Tim Deacon, CFO, confirmed that the Bell acquisition was completed at the beginning of July, with almost 80% of the purchase price made in shares based on the 20-day average share price For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Sun Life(1) delivered double-digit underlying net income growth in Q2 reflecting strong growth across Canada, Asia, and the U.S., and an underlying return on equity of 19.1%(2). TORONTO, ON, Aug. 6, 2026 /CNW/ -- Sun Life Financial Inc.(1) (TSX: SLF) (NYSE: SLF) announced its results for the second quarter ended June 30, 2026. Underlying net income(2) of $1,123 million increased $108 million or 11% from Q2'25. Reported net income(3) of $1,008 million increased $292 million or 41% from Q2'25. Underlying EPS(2)(4) of $2.02 increased 13% from Q2'25; reported EPS(4) of $1.81 increased 44% from Q2'25. Underlying return on equity ("ROE")(2) was 19.1%; reported ROE(2) was 17.2%. Assets under management ("AUM")(2) of $1,696 billion increased $155 billion or 10% from Q2'25. SLF Inc. LICAT ratio of 145%(5). "Sun Life delivered a strong second quarter, reflecting the resilience of our diversified business and the discipline of our execution," said Kevin Strain, President and CEO of Sun Life. "We saw strong momentum across our health and individual protection businesses, with group insurance sales up 27% and individual insurance sales up 16%. In asset management and wealth, we continued to build momentum in alternatives, private credit and product innovation, contributing $2.1 billion of net inflows and wealth sales in the quarter. These results delivered double-digit underlying net income growth and an underlying ROE of 19.1% for the quarter. With our strong capital position and continued investment in innovation, we are well positioned to deliver sustainable value for Clients and shareholders." "We also made important progress on our digital and AI priorities. Our founding membership in the AI Consortium and the launch of our proprietary agentic AI platform for technology architecture teams are examples of how we are scaling AI responsibly across the enterprise, strengthening how we work and creating more capacity for our people to focus on growth, innovation and delivering on our Purpose." Financial and Operational Highlights Financial and Operational Highlights - Quarterly Comparison (Q2'26 vs. Q2'25) Underlying net income(12) of $1,123 million increased $108 million or 11% from prior year, driven by: Strong performance across Canada, reflecting business growth and favourable insurance experience, Asia, from business growth in Hong Kong, and the U.S., driven by medical stop-loss revenue growth and favourable experience in In-force Management; partially offset by Higher expenses reflecting top-line growth and financing costs supporting the acquisition of our remaining interests in SLC Management affiliates. Reported net income of $1,008 million increased $292 million or 41% from prior year, driven by: Favourable public equity market impacts, improved other market-related impacts primarily driven across Asia and Canada, and improved real estate experience(13); The increase in underlying net income; and A prior year impairment charge of $61 million in U.S. Dental(14). Foreign exchange translation led to a decrease of $2 million in underlying net income and had no significant impact to the change in reported net income. Underlying ROE was 19.1% and reported ROE was 17.2% (Q2'25 - 17.6% and 12.4%, respectively). SLF Inc. ended the quarter with a LICAT ratio of 145%. Business Group Highlights Sun Life Asset Management: A global leader in asset management Sun Life Asset Management underlying net income of US$262 million increased US$11 million or 4% from prior year, driven by: MFS(15) up US$3 million, reflecting higher fee income from higher average net assets ("ANA") mostly offset by higher operating expenses and a decrease in net investment income. Pre-tax net operating profit margin(2) improved to 35.7% for Q2'26, compared to 35.1% in the prior year, due to higher ANA. SLC Management up US$10 million, reflecting higher net seed investment income. Fee-related earnings(2) were in line with prior year. Fee-related earnings margin(2) was 26.3% for Q2'26, compared to 25.5% in the prior year. Solutions & Other down US$2 million, in line with the prior year. Reported net income of US$243 million increased US$29 million or 14% from prior year, driven by: Favourable market-related impacts; A gain on sale of MFS' closed-end funds(16); and The increase in underlying net income; partially offset by Share-based compensation expenses at MFS from accelerated vesting terms for retirement eligible plan members. Foreign exchange translation led to a decrease of $1 million in underlying net income and had no significant impact to the change in reported net income. Sun Life Asset Management gross flows(2) increased US$19.0 billion or 55% from prior year, reflecting a large public fixed income mandate funded at ABSLAMC(17). Higher gross flows in SLC Management were offset by lower gross flows in MFS. Total Sun Life Asset Management AUM(2) at Q2'26 was US$917.7 billion (Q2'25 - US$856.0 billion), consisting of: MFS: US$644.7 billion (Q2'25 - US$635.4 billion); SLC Management: US$193.6 billion (Q2'25 - US$183.4 billion); and Solutions & Other: US$79.4 billion (Q2'25 - US$37.2 billion). Total Sun Life Asset Management managed assets(2) at Q2'26 of US$1,034.9 billion, increased US$71.8 billion or 7% from Q2'25. Total Sun Life Asset Management net inflows(2) of US$1.5 billion in Q2'26 (Q2'25 - net outflows of US$10.9 billion) reflected: MFS net outflows of US$22.9 billion (Q2'25 - net outflows of US$14.3 billion) from retail net outflows of US$13.7 billion (Q2'25 net outflows of US$5.9 billion) reflecting continued outflows in U.S. equity markets by retail investors, and institutional net outflows of US$9.2 billion (Q2'25 net outflows of US$8.4 billion) reflecting portfolio rebalancing; more than offset by Solutions & Other net inflows of US$19.7 billion (Q2'25 - net inflows of US$0.4 billion) from a large public fixed income mandate funded at ABSLAMC; and SLC Management net inflows of US$4.6 billion (Q2'25 - net inflows of US$3.0 billion) from capital raising. MFS' active exchange-traded funds ("ETFs") continued to gain traction, generating US$640 million of net inflows in Q2'26, more than triple the prior year. Growth was led by international equity, core plus fixed income, and large value strategies, reflecting strong momentum across the ETF product suite. Distribution also expanded, with ETFs now available on 25 platforms, while AUM reached approximately US$3 billion in Q2'26, more than double the start of the year. On July 2, 2026, we completed the acquisition of Bell Partners Inc. ("Bell Partners"), a leading U.S. multifamily real estate investment manager and vertically integrated property management business. Bell Partners is our U.S. multifamily operating platform, operating under BentallGreenOak ("BGO"). The acquisition expands our asset management capabilities in one of the largest and most resilient sectors of the U.S. real estate market. Crescent Capital Group LP ("Crescent") closed its fourth U.S. direct lending fund in Q2'26, the largest fund in the firm's history, raising US$10.8 billion. This fund meaningfully surpassed the size of its predecessor fund and underscores the attractive opportunities to provide senior debt capital to sponsor-backed U.S. companies, particularly in the lower-middle market. Further, Crescent and Pantheon(18) also closed the seventh fund within Crescent's Credit Solutions series in the first half of the year, a US$3.2 billion private credit continuation vehicle, marking the largest single‑fund portfolio transaction in the private credit secondaries market to-date. The vehicle acquires a diversified portfolio of performing sponsor‑backed loans and securities, providing investors enhanced liquidity optionality. BGO partnered with Visitt, an AI-powered property operations platform, to deliver AI-powered solutions across more than 300 BGO properties in Canada. Integrating AI into BGO's property operations will unlock new efficiencies by simplifying complex workflows, enhance consistency across assets, and strengthen tenant experience. Canada: A leader in health, wealth, and insurance Canada underlying net income of $427 million increased $80 million or 23% from prior year, driven by: Business growth reflecting higher premiums in Sun Life Health, favourable morbidity and mortality experience, and higher fee income from higher Group Wealth(19) AUMA(20); partially offset by Lower earnings on surplus reflecting lower surplus asset balances and returns. Reported net income of $443 million increased $141 million or 47% from prior year, driven by: The increase in underlying net income; and Favourable public equity market impacts and improved other market-related and real estate experience(13). Canada's sales(21): Asset management gross flows & wealth sales of $7 billion increased 60%, driven by higher large case defined contribution sales and increased rollover volumes in Group Wealth(19), and higher mutual fund sales in Individual Wealth. Sun Life Health sales of $203 million were in line with prior year. Individual insurance sales of $140 million increased 3%, driven by higher participating life sales. We continue to advance our integrated digital and AI ecosystem to help Clients seamlessly manage their holistic health, wealth, and insurance needs. During the quarter, we launched an enhanced My Sun Life Mobile App experience that introduces a range of integrated health capabilities, including access to virtual care, pharmacy services, and wellness support. This personalized experience makes it easier for members to find information and take action, helping Clients across Canada through their health journey. Additionally, we introduced an AI-powered concierge for SLFD(22) advisors, providing faster access to information and support for complex inquiries. The tool complements existing advisor capabilities, including One Plan and Notes Assistant, enabling advisors to spend more time focused on advice and Client relationships. This capability represents the evolution of our advisor enablement strategy as we continue to enhance the platform by expanding access to a broader advisor network to further strengthen the advisor experience. U.S.: A leader in health and benefits U.S. underlying net income of US$164 million increased US$21 million or 15% from prior year, driven by: Medical stop-loss earnings from revenue growth, and In-force Management results from favourable experience; partially offset by Lower Employee Benefits results reflecting strong prior year earnings driven by favourable insurance experience. Reported net income of US$125 million increased US$51 million or 69% from prior year, driven by: A prior-year impairment charge of US$45 million in Dental (14); and The increase in underlying net income; partially offset by Unfavourable other market-related and interest rate impacts. Foreign exchange translation had no significant impact to the change in underlying net income and reported net income, respectively. U.S. sales of US$324 million were up 43% from prior year, primarily driven by: Higher medical stop-loss sales reflecting strong close rates, continued pricing discipline supported by our risk selection tools, and favourable market conditions; partially offset by Lower Medicaid sales in Dental. In Health and Risk Solutions, we are partnering with Medzown, Inc., a precision medicine management company, to increase access to clinical trials for employees at self-insured employers. Medzown's AI-powered clinical navigation proactively identifies patients who have been diagnosed with cancer and other costly, complex diseases and connects them to an appropriate clinical trial, before high-cost claims escalate. Medzown is the latest addition to Sun Life's comprehensive suite of health solutions designed to improve health outcomes for members and drive down costs for employers. In 2025, our suite of health solutions, along with other cost containment efforts, saved Sun Life U.S. and our employers more than US$68 million. In Employee Benefits, we were added to the digitally-powered platform of Centro, an ancillary benefits consulting, employee communications and technology firm representing many of the top brokers in the U.S. The new API connection between Centro and Sun Life enables seamless, real-time exchange of request-for-proposal data, eliminating manual workflows and significantly reducing turnaround times. This streamlined quoting process allows brokers to work faster and more accurately, delivering a better experience for group Clients. Asia: A regional leader focused on fast-growing markets Asia underlying net income of $222 million increased $34 million or 18% from prior year, driven by: Strong sales momentum and in-force business growth in Hong Kong; and Lower expenses and favourable credit experience; partially offset by Lower fee income from the transitioning of the administration business to the centralized eMPF platform in Hong Kong. Reported net income of $202 million increased $122 million or 153% from prior year, driven by favourable public equity market impacts, improved other market-related impacts, and the increase in underlying net income. Foreign exchange translation led to a decrease of $5 million in underlying net income and a decrease of $4 million in reported net income. Asia's sales(21): Individual insurance sales of $862 million were up 19%, driven by: Asset management gross flows and wealth sales of $1 billion were up 22%, reflecting higher Mandatory Provident Fund ("MPF") sales in Hong Kong, higher group fund sales in India, and higher fixed income fund sales in the Philippines. New business CSM of $277 million in Q2'26 was down from $299 million in the prior year, reflecting an increasing competitive environment primarily in Hong Kong. Reinforcing our position as a trusted provider delivering strong outcomes for Clients, in Hong Kong, we were named the inaugural Diamond Choice winner at the 2026 MPF Awards by MPF Ratings, recognizing the best value scheme across the MPF system's 25-year history. Further, across Asia, we continue to enhance our product offering to meet Clients' evolving needs. In the Philippines, we launched a legacy planning solution designed to help Clients protect and transfer wealth across generations, and in Indonesia, we launched the Sun USD Alpha Grow Fund, providing Clients with additional opportunities to participate in global markets. We continue to enhance the Client experience and empower advisors through AI-enabled solutions. In Indonesia, our AI-powered contact centre is delivering a faster, more personalized service with stronger first-call resolution. For advisors, we launched AI-enabled tools which equip them with real-time coaching and insights, strengthening Client conversations and providing a more seamless onboarding experience. Corporate Underlying net loss was $117 million compared to underlying net loss of $62 million in the prior year, reflecting higher financing costs supporting the acquisition of our remaining interests in SLC Management affiliates, higher incentive compensation, and prior year favourability from timing of strategic investment spend. Reported net loss was $144 million compared to reported net loss of $66 million in the prior year, driven by the change in underlying net loss and unfavourable market-related impacts. Foreign exchange translation led to a decrease of $4 million in underlying net loss and reported net loss, respectively. Earnings Conference Call The Company's Q2'26 financial results will be reviewed at a conference call on Friday, August 7, 2026, at 10:00 a.m. ET. Visit www.sunlife.com/QuarterlyReports 10 minutes prior to the start of the event to access the call through either the webcast or conference call options. Individuals participating in the call in a listen-only mode are encouraged to connect via our webcast. Following the call, the webcast and presentation will be archived and made available on the Company's website, www.sunlife.com, until the Q2'27 period end. The information in this document is based on the unaudited interim financial results of SLF Inc. for the period ended June 30, 2026 and should be read in conjunction with the interim management's discussion and analysis ("MD&A") and our unaudited interim consolidated financial statements and accompanying notes ("Interim Consolidated Financial Statements") for the period ended June 30, 2026, prepared in accordance with International Financial Reporting Standards ("IFRS"). Additional information relating to SLF Inc. is available on www.sunlife.com under Investors – Financial results and reports, on the SEDAR+ website at www.sedarplus.ca, and on the U.S. Securities and Exchange Commission's website at www.sec.gov. Unless otherwise noted, all amounts are in Canadian dollars. Amounts in this document may be impacted by rounding. For more details on how we report our results see section A. How We Report Our Results in the Q2'26 MD&A. 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 in isolation from or as alternatives to measures of financial performance determined in accordance with IFRS. Additional information concerning non-IFRS financial measures and, if applicable, reconciliations to the closest IFRS measures are available in the Q2'26 MD&A under the heading N - Non-IFRS Financial Measures and the Supplementary Financial Information packages that are available on www.sunlife.com under Investors – Financial results and reports. 1. Underlying Net Income and Underlying EPSUnderlying net income is a non-IFRS financial measure that assists in understanding Sun Life's business performance by making certain adjustments to IFRS income. Underlying net income, along with common shareholders' net income (Reported net income), is used as a basis for management planning, and is also a key measure in our employee incentive compensation programs. This measure reflects management's view of the underlying business performance of the company and long-term earnings potential. For example, due to the longer term nature of our individual protection businesses, market movements related to interest rates, equity markets and investment properties can have a significant impact on reported net income in the reporting period. However, these impacts are not necessarily realized, and may never be realized, if markets move in the opposite direction in subsequent periods or in the case of interest rates, the fixed income investment is held to maturity. Underlying net income removes the impact of the following items from reported net income: Market-related impacts reflecting the after-tax difference in actual versus expected market movements Assumptions changes and management actions Other adjustments: i) MFS shares owned by managementii) Acquisition, integration, and restructuringiii) Intangible asset amortizationiv) Other items that are unusual or exceptional in nature For more details about the adjustments removed from reported net income to arrive at underlying net income, see section N - Non-IFRS Financial Measures - 2 - Underlying Net Income and Underlying EPS in the Q2'26 MD&A. The following table sets out the post-tax amounts that were excluded from our underlying net income (loss) and underlying EPS and provides a reconciliation to our reported net income and EPS based on IFRS. The following table shows the pre-tax amount of underlying net income adjustments: Taxes related to underlying net income adjustments may vary from the expected effective tax rate range reflecting the mix of business based on the Company's international operations and other tax-related adjustments. 2. Additional Non-IFRS Financial MeasuresManagement also uses the following non-IFRS financial measures, and a full listing is available in section N - Non-IFRS Financial Measures in the Q2'26 MD&A. Assets under management. AUM is a non-IFRS financial measure that indicates the size of our Company's assets across asset management, wealth, and insurance. There is no standardized financial measure under IFRS. In addition to the most directly comparable IFRS measures, which are the balance of General funds and Segregated funds on our Statements of Financial Position, AUM also includes Third-party and other AUM and Consolidation adjustments. "Consolidation adjustments" is presented separately as consolidation adjustments apply to all components of total AUM. For more details about Third-party and other AUM, see sections D - Growth - 2 - Assets Under Management and N - Non-IFRS Financial Measures in the Q2'26 MD&A. Cash and other liquid assets. This measure is comprised of cash, cash equivalents, short-term investments, and publicly traded securities, net of loans related to acquisitions and short-term loans that are held at SLF Inc. (the ultimate parent company), and its wholly owned holding companies. This measure is a key consideration of available funds for capital re-deployment to support business growth. 3. Reconciliations of Select Non-IFRS Financial MeasuresUnderlying Net Income to Reported Net Income Reconciliation - Pre-tax by Business Group Underlying Net Income to Reported Net Income Reconciliation - Pre-tax by Business Unit - Sun Life Asset Management U.S. dollars Underlying Net Income to Reported Net Income Reconciliation - Pre-tax by Business Unit - Sun Life Asset Management Underlying Net Income to Reported Net Income Reconciliation - Pre-tax in U.S. dollars Forward-looking StatementsFrom 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 statements (i) relating to our strategies, plans, targets, goals and priorities; (ii) relating to our growth initiatives and other business objectives; (iii) that are predictive in nature or that depend upon or refer to future events or conditions; and (iv) that include words such as "achieve", "aim", "ambition", "anticipate", "aspiration", "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, and remain subject to change. 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 the Q2'26 MD&A under the headings C - Profitability - 5 - Income taxes, F - Financial Strength and I - Risk Management and in SLF Inc.'s 2025 AIF under the heading Risk Factors, and the factors detailed in SLF Inc.'s 2025 Annual MD&A under the heading K - Risk Management and in its other filings with Canadian and U.S. securities regulators, which are available for review at www.sedarplus.ca and www.sec.gov, respectively. Important risk factors that could cause our assumptions and estimates, and expectations and projections to be inaccurate and our actual results or events to differ materially from those expressed in or implied by the forward-looking statements contained in this document, are set out below. The realization of our forward-looking statements essentially depends on our business performance which, in turn, is subject to many risks. Factors that could cause actual results to differ materially from expectations include, but are not limited to: market risks - related to the performance of equity markets; changes or volatility in interest rates or credit spreads or swap spreads; real estate investments; fluctuations in foreign currency exchange rates; and inflation; insurance risks - related to mortality experience, morbidity experience and longevity; policyholder behaviour; product design and pricing; the impact of higher-than-expected future expenses; and the availability, cost and effectiveness of reinsurance; credit risks - related to issuers of securities held in our investment portfolio, debtors, structured securities, reinsurers, counterparties, other financial institutions and other entities; business and strategic risks - related to global economic and geopolitical conditions; the design and implementation of business strategies; changes in distribution channels or Client behaviour including risks relating to market conduct by intermediaries and agents; the impact of competition; the performance of our investments and investment portfolios managed for Clients such as segregated and mutual funds; shifts in investing trends and Client preference towards products that differ from our investment products and strategies; changes in the legal or regulatory environment, including capital requirements and tax laws; environmental and social issues and their related laws and regulations; operational risks - related to breaches or failure of information system security and privacy, including cyber-attacks; our ability to attract and retain employees; legal, regulatory compliance and market conduct, including the impact of regulatory inquiries and investigations; the execution and integration of mergers, acquisitions, strategic investments and divestitures; our information technology infrastructure; a failure of information systems and Internet-enabled technology; dependence on third-party relationships, including outsourcing arrangements; business continuity; model errors; information management; liquidity risks - the possibility that we will not be able to fund all cash outflow commitments as they fall due; and other risks - changes to accounting standards in the jurisdictions in which we operate; risks associated with our international operations, including our joint ventures; market conditions that affect our capital position or ability to raise capital; downgrades in financial strength or credit ratings; and tax matters, including estimates and judgements used in calculating taxes. 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. About Sun Life Sun Life is a leading international financial services organization providing asset management, wealth, insurance and health solutions to individual and institutional Clients. Sun Life has operations in a number of markets worldwide, including Canada, the U.S., the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of June 30, 2026, Sun Life had total assets under management of $1.70 trillion. For more information, please visit www.sunlife.com. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF. 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Brighthouse Financial (BHF) came out with quarterly earnings of $4.45 per share, missing the Zacks Consensus Estimate of $4.98 per share. This compares to earnings of $3.43 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -10.64%. A quarter ago, it was expected that this annuity and life insurance company would post earnings of $4.75 per share when it actually produced earnings of $4.35, delivering a surprise of -8.42%. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. Brighthouse Financial, which belongs to the Zacks Insurance - Life Insurance industry, posted revenues of $2.1 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 8.14%. This compares to year-ago revenues of $2.15 billion. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Brighthouse Financial shares have lost about 3.2% since the beginning of the year versus the S&P 500's gain of 13%. While Brighthouse Financial has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Brighthouse Financial was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $5.10 on $2.2 billion in revenues for the coming quarter and $19.20 on $8.84 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Life Insurance is currently in the bottom 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Sun Life (SLF), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This financial services company is expected to post quarterly earnings of $1.39 per share in its upcoming report, which represents a year-over-year change of +7.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Sun Life's revenues are expected to be $6.46 billion, down 2.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report Sun Life Financial Inc. (SLF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research