Sun Life Reports Second Quarter 2025 Results

Executive Summary

• Sun Life Financial Inc. reported second quarter 2025 results with underlying net income of $1,015 million, a 2% increase year-over-year, driven by record performance in Asia and strong wealth management flows.
• Reported net income for common shareholders was $716 million, an 11% increase from Q2 2024, despite impairment charges and unfavorable market-related impacts.
• The company maintained a strong capital position with a Life Insurance Capital Adequacy Test (LICAT) ratio of 151% and continued its share buyback program, purchasing nearly $400 million in shares during the quarter.

Key Details

• Underlying Net Income: $1,015 million (up $15 million or 2% from Q2'24).
• Reported Net Income: $716 million (up $70 million or 11% from Q2'24).
• Underlying Return on Equity (ROE): 17.6%.
• Reported ROE: 12.4%.
• Assets Under Management (AUM): $1,541 billion (up $76 billion or 5% from Q2'24).
• Segment Performance (Underlying Net Income):
  • Asset Management & Wealth: $455 million (in line with prior year).
  • Group - Health & Protection: $326 million (up $21 million or 7%).
  • Individual - Protection: $299 million (down $33 million or 10%).
  • Corporate Expenses & Other: $(65) million net loss (decrease in loss of $27 million or 29%).
• Segment Performance (Reported Net Income):
  • Asset Management: $254 million (down 7%).
  • Canada: $330 million (up 13%).
  • U.S.: $103 million (down 19%).
  • Asia: $98 million (down 35%).
  • Corporate: $(69) million loss.
• Capital & Shareholder Returns:
  • LICAT ratio: 151%.
  • Share buybacks: Nearly $400 million purchased in the quarter.
• Operational Highlights:
  • Asset Management Gross Flows & Wealth Sales: $52.7 billion (up 14% YoY).
  • Group - Health & Protection Sales: $535 million (up 8% YoY).
  • Individual - Protection Sales: $863 million (up 15% YoY).
  • New Business Contractual Service Margin (CSM): $435 million.
• Key Drivers & Charges:
  • Positive Drivers: Record underlying net income in Asia, strong protection business growth, higher wealth management and investment earnings, 15% increase in bancassurance sales in Asia, and a prior year restructuring charge of $108 million in Corporate (Q2'24).
  • Negative Drivers/Charges: Impairment charge of $61 million on a customer relationship intangible asset in the U.S. due to early termination of a group dental contract; unfavorable mortality experience in Canada and the U.S.; higher expenses in Asia; and unfavorable market-related impacts in Asia and Canada.
• Strategic Updates:
  • Acquired additional ownership interest in Bowtie Life Insurance Company Limited (Hong Kong) on July 15, 2025.
  • Launched Expert Cancer Review service in U.S. Health and Risk Solutions.
  • Transitioned Medical Second Opinion services to Lumino Health Virtual Care platform in Canada.
  • Canadian Dental Care Plan (CDCP) anniversary: Supported 5.2 million approved Canadians, with 2.2 million receiving care.

Notable Quotes

• "Sun Life's Q2 results were driven by record underlying net income in Asia with strong protection business growth, higher wealth management and investment earnings. We also saw a 15% increase in bancassurance sales across several of our Asia markets, including Hong Kong, India and the Philippines, as well as continued growth in SLC Management flows, demonstrating resilience in our business mix," said Kevin Strain, President and CEO of Sun Life.
• "We maintained a strong capital position with a LICAT ratio of 151% providing stability and flexibility to invest, grow and create long-term value for our stakeholders, while navigating an uncertain external environment. We continue to be active in our share buy-back program purchasing nearly $400 million of shares in the quarter."