☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||
Common Shares | SLF | New York Stock Exchange |
☒ Annual information form |
☒ Audited annual financial statements |
Common Shares | 584,617,001 | |||||||||||||
Class A Preferred Shares Series 3 | 10,000,000 | |||||||||||||
Class A Preferred Shares Series 4 | 12,000,000 | |||||||||||||
Class A Preferred Shares Series 5 | 10,000,000 | |||||||||||||
Class A Preferred Shares Series 8R | 6,217,331 | |||||||||||||
Class A Preferred Shares Series 9QR | 4,982,669 | |||||||||||||
Class A Preferred Shares Series 10R | 6,838,672 | |||||||||||||
Class A Preferred Shares Series 11QR | 1,161,328 | |||||||||||||
Class A Preferred Shares Series 14 | 1,000,000 | 1 |
Emerging growth company | ☐ |
Sun Life Financial Inc. | ||||||||
By: | /s/ Melissa J. Kennedy | |||||||
Melissa J. Kennedy | ||||||||
Executive Vice-President, Chief Legal | ||||||||
& Public Policy Officer |
Dated: February 7, 2024 |
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EXHIBITS: |
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Clawback Policy | ||||||||
Annual Management’s Discussion and Analysis for the year ended December 31, 2023 |
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Consolidated Annual Financial Statements for the year ended December 31, 2023 |
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Annual Information Form dated February 7, 2024 for the year ended December 31, 2023 |
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Certifications required by Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of United States Code, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
Consent of Independent Registered Public Accounting Firm (PCAOB ID No. 01208) |
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Consent of Appointed Actuary | ||||||||
101 | Interactive Data File | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||
APPROVAL | |||||
Approved By: | Board of Directors of Sun Life Financial Inc. | ||||
Date approved by Board/ Board Committee: | November 1, 2023 | ||||
Next scheduled review and approval by Board/ Board Committee: | November 1, 2026 | ||||
Effective Date: | November 1, 2023 | ||||
Sponsor: | Helena Pagano, EVP, Chief People and Culture Officer | ||||
Responsible Person/Contact: | Chantal Wade, AVP, Executive Compensation |
1.0 | PURPOSE AND APPLICATION………………………………………………………………………………………… | 2 | |||||||||
1.1 | Purpose………………………………………………………………………………………………………………………….. | 2 | |||||||||
1.2 | Application……………………………………………………………………………………………………………………. | 2 | |||||||||
2.0 | POLICY………………………………………………………………………………………………………………………………………... | 2-6 | |||||||||
3.0 | ACCOUNTABILITIES…………………………………………………………………………………………………………….. | 6 | |||||||||
4.0 | GLOSSARY…………………………………………………………………………………………………………………………………. | 6-7 | |||||||||
5.0 | REFERENCES…………………………………………………………………………………………………………………………… | 8 | |||||||||
6.0 | APPENDICES……………………………………………………………………………………………………………………………. | 8 | |||||||||
Appendix A – Modification History………………………………………………………………………….. | 8 |
1.0 | PURPOSE AND APPLICATION | ||||||||||
1.1 |
Purpose
This clawback policy is designed to allow Sun Life to reclaim or “claw back” incentive compensation in situations where employees received excessive or undeserved compensation. This includes instances of Misconduct (all employees) or financial restatements (Executives described in this policy).
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1.2 |
Application
This Policy is an Enterprise Policy. It applies to all current and former employees in the case of Misconduct. In the case of financial restatements, it applies to "Executive Officers", which are Executive Team Members of the Company, and any other individuals determined by the Board in its sole discretion to be subject to this Policy in the case of financial restatements.
This policy does not apply to Joint Ventures and Joint Ventures under management control.
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2.0 | POLICY | ||||||||||
2.1 | All current and former employees covered by this Policy are required upon demand by the Board to repay any or all Incentive Compensation received or realized by such employee during the three completed fiscal years immediately prior to a determination by the Board that the employee engaged in Misconduct. | ||||||||||
2.2 | All Executive Officers are required upon demand by the Board to repay any excess Incentive Compensation received or realized by them during the three completed fiscal years immediately preceding the relevant Restatement Date (as well as during any transition period specified in Rule 10D-1(b)(1)(i)(D) under the Exchange Act), other than any Incentive Compensation that was received prior to such Executive Officer’s service as an Executive Officer or prior to the effective date of the U.S. Stock Exchange rules implementing Rule 10D-1 under the Exchange Act, if the Incentive Compensation received or realized by such Executive Officer during such period would have been less had the results of the Accounting Restatement been known (such excess Incentive Compensation, as computed without regard to any taxes paid thereon, the “Erroneously Awarded Compensation”). |
2.3 | For purposes of this Clawback Policy, “Accounting Restatement” means any accounting restatement of the Company’s financial statements due to material noncompliance with any financial reporting requirement under the securities laws, including (i) a restatement required to correct a material error in previously-issued financial statements and/or (ii) a restatement required in the current period merely to avoid material misstatements resulting from either an uncorrected error or the recognition of a corrected error in the current period, which may include a restatement to avoid cumulative effects of an error over several reporting periods. Clawbacks do not apply to out-of-period adjustments that are not Accounting Restatements or to retrospective applications of changes in accounting principles, retrospective reclassifications due to discontinued operations or other retrospective revisions or adjustments that do not represent error corrections. | ||||||||||
2.4 | Erroneously Awarded Compensation will be “clawed back” (i.e., recovered from, or repaid by, the applicable Executive Officer) regardless of whether the Executive Officer was party to or aware of the misstatement, and applies to former Executive Officers who were employed in that capacity during the above three-fiscal-year period (or relevant transition period) (such recovery or repayment of Erroneously Awarded Compensation, a “Clawback”). Neither Executive Officers, former Executive Officers, nor the Company may insure or indemnify Executive Officers against a Clawback. The Company may decide not to attempt to recover funds in situations only as allowable under applicable legislation, in particular the Exchange Act (as discussed further below). If the Board determines that an Executive Officer received any Erroneously Awarded Compensation in connection with an Accounting Restatement, the Board shall, reasonably promptly after the Restatement Date, seek recoupment from such Executive Officer of all such Erroneously Awarded Compensation, subject to the Impracticality Exceptions. | ||||||||||
2.5 | A Clawback will not be triggered by the following changes to the Company’s financial statements: retrospective application of a change in accounting principle, retrospective revision to reportable segment information due to a change in organization structure, retrospective reclassification due to a discontinued operation, retrospective application of a change in reporting entity, or retrospective adjustment to provisional amounts in connection with a prior business combination and retrospective revision for stock splits, reverse stock splits, stock dividends or other changes to the capital structure. |
2.6 | For Incentive Compensation based on the Company’s stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in an Accounting Restatement: (i) the amount of Erroneously Awarded Compensation must be based on a reasonable estimate of the effect of the Accounting Restatement on the Company’s stock price or total shareholder return upon which the Incentive Compensation was received; and (ii) the Company must maintain documentation of the determination of that reasonable estimate and provide such documentation to the applicable U.S. Stock Exchange. Reference is further made to Rule 10D-1(b)(1)(iii) under the Exchange Act and the rules of the applicable U.S. Stock Exchange used for calculating Erroneously Awarded Compensation. | ||||||||||
2.7 | Prior to making a demand for payment related to financial restatements, the Board will conduct an appropriate investigation of relevant facts in compliance with relevant regulations in Canada, the United States or other competent jurisdiction. | ||||||||||
2.8 | The Board may retain a financial advisor to provide an opinion on the fair market value of a common share of Sun Life Financial Inc. on the date that a payment of Incentive Compensation was calculated or that an option was exercised had the Misconduct and/or Accounting Restatement not occurred. | ||||||||||
2.9 | The Board may take into account a variety of factors in its sole discretion in determining whether to demand repayment for Misconduct. | ||||||||||
2.10 | The Board shall not, under this Clawback Policy, demand payment of an amount in excess of (i) the pre-tax amount of Incentive Compensation received or realized by the Executive Officer or former Executive Officer in situations of Misconduct or (ii) the amount of Erroneously Awarded Compensation received or realized by the Executive Officer or former Executive Officer attributable to an Accounting Restatement. | ||||||||||
2.11 | A demand for payment under this Clawback Policy shall be on such terms as the Board specifies in compliance with applicable legislation and related regulations and rules (including the U.S. Clawback Rules). | ||||||||||
2.12 | The Company will take any action authorized by law to enforce a demand for repayment by the Board that is not promptly complied with by a current or former employee. |
2.13 | This Clawback Policy does not in any way detract from the requirements of section 304 of the Sarbanes-Oxley Act of 2002 and does not prevent the Company from taking any other appropriate action against an employee who is determined to have engaged in Misconduct, up to and including termination of employment. | ||||||||||
2.14 | The Board will determine, in its sole discretion, the method for recouping amounts hereunder which may include, without limitation: | ||||||||||
2.14.1 | • requiring reimbursement of cash amounts previously paid (on a pre-tax basis); | ||||||||||
2.14.2 | • seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any Incentive Compensation; | ||||||||||
2.14.3 | • offsetting the amount of the Erroneously Awarded Compensation, or Incentive Compensation, as applicable, otherwise owed by the Company to the Executive Officer as of the Restatement Date; | ||||||||||
2.14.4 | • cancelling outstanding vested or unvested Incentive Compensation; | ||||||||||
2.14.5 | • taking any other remedial and recovery action permitted by law, as determined by the Board; or | ||||||||||
2.14.6 | • any combination of the foregoing, as determined by the Board. | ||||||||||
2.15 | The Company must recover any Erroneously Awarded Compensation unless the Management Resources Committee of the Board determines that any of the impracticality exceptions set forth in Rule 10D-1(b)(1)(iv) under the Exchange Act and/or the rules of the applicable U.S. Stock Exchange are available, as set forth below (the “Impracticality Exceptions”): | ||||||||||
2.15.1 | • The direct expense paid to a third party to assist in enforcing this Clawback Policy would exceed the amount of Erroneously Awarded Compensation to be recovered. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation pursuant to this clause, the Company must make a reasonable attempt to recover such Erroneously Awarded Compensation, document (in writing) such reasonable attempt(s) to recover and provide that documentation to the applicable U.S. Stock Exchange | ||||||||||
2.15.2 | • Recovery would violate applicable Canadian law where that law was adopted prior to November 28, 2022. |
2.15.3 | • Recovery would likely cause an otherwise tax-qualified retirement plan of the Company, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder. | ||||||||||
2.16 | The Company’s obligation to recover Erroneously Awarded Compensation is not dependent on if or when the restated financial statements for the Accounting Restatement have been filed. | ||||||||||
2.17 | Recoupment of Erroneously Awarded Compensation under section 2.2 of this Clawback Policy is made on a “no fault” basis, without regard to whether any misconduct occurred or whether any Executive Officer is responsible for the noncompliance that resulted in the Accounting Restatement. | ||||||||||
2.18 | This Clawback Policy is qualified by reference to applicable SEC rules (including Rule 10D-1 under the Exchange Act) and, when adopted, the rules of the applicable U.S. Stock Exchange (collectively, the “U.S. Clawback Rules”). To the extent there is a conflict between this Clawback Policy and the U.S. Clawback Rules, or any interpretive question arises hereunder, the U.S. Clawback Rules will prevail. | ||||||||||
3.0 |
ACCOUNTABILITIES
The Board of Directors:
•Approving this Policy
•Determination that employee engaged in Misconduct such that the Clawback Policy is triggered
•Conducting an appropriate investigation of relevant facts in compliance with relevant regulations in Canada, the United States or other competent jurisdiction prior to making a demand for payment related to financial restatements
•Determining the method for recouping amounts
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Management Resources Committee
•Determining any impracticality exceptions
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4.0 |
GLOSSARY
“Company” means each of Sun Life Financial Inc. and Sun Life Assurance Company of Canada. Reference to the terms “Sun Life”, “we”, “our”, and “us” within this document refers to each of Sun Life Financial Inc. and Sun Life Assurance Company of Canada.
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“Exchange Act” means the U.S. Securities and Exchange Act of 1934, as amended from time to time. |
“Financial Reporting Measure” means a measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measure that is derived wholly or in part from such measure, including stock price and total shareholder return. |
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“Incentive Compensation” means any incentive compensation paid or realized that can increase or decrease from the target amount based on actual performance. Incentive Compensation includes, with respect to any employee covered by this Clawback Policy, (i) any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure, (ii) any amount paid to an employee of the Company under an incentive or deferred compensation plan sponsored or administered by the Company and (iii) the difference between the exercise price of an option to purchase a common share of Sun Life Financial Inc. and the closing price of such a share on the Toronto Stock Exchange on the date such an option was exercised. |
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“Joint Venture” means corporation or other entity in which the company has a substantial interest. A joint venture is considered to be under management control where Sun Life has supervision over and authority to direct the day-to-day business and operations of the joint venture in the ordinary course of business. The following joint ventures are under management control as of the date of this policy approval: Sun Life Malaysia Assurance Berhad, Sun Life Malaysia Takaful Berhad and Sun Life Grepa Financial Inc. |
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“Misconduct” means fraud, dishonesty, material and intentional non-compliance with legal requirements or the Company’s policies or procedures (including the Code of Conduct) or, any other act or omission that would permit the lawful termination of employment or summary dismissal from employment without notice or payment whatsoever, and includes a failure to report or take action to stop Misconduct of another employee that an employee knew, or ought to have known, about. |
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“Restatement Date” means the date on which the Company is required to prepare an Accounting Restatement (as determined by Rule 10D-1(b)(1)(ii) under the Exchange Act). |
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“Subsidiary” means a corporation whereby more than 50 per cent of each of the total voting power and total value of the shares (other than preferred shares) are owned, directly or indirectly, by the Corporation and/or a Subsidiary or Subsidiaries. Thus, where a joint venture does not meet the said “more than 50%” test, it is not a Subsidiary. For the purposes of this Framework, “Subsidiary” excludes Sun Life Assurance Company of Canada. |
“U.S. Stock Exchange” means the New York Stock Exchange and/or any other U.S. national securities exchange on which the Company’s securities are listed. |
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5.0 | REFERENCES | ||||||||||
5.1 | Policies | ||||||||||
5.1.1 | Compensation and Appointment Policy | ||||||||||
5.2 | Operating Guidelines | ||||||||||
5.2.1 | For clarity, in cases of discrepancy between this Clawback Policy and the Compensation & Appointment Policy, this Clawback Policy will govern. | ||||||||||
5.2.2 | With the exception of impracticality exceptions, which the Management Resources Committee determines, the Board has full and final authority to make all determinations under this Clawback Policy including whether the Clawback Policy applies and, if so, the amount of compensation to be repaid or forfeited by an Employee or Executive Officer. All determinations and decisions made by the Board under this Clawback Policy will be final and binding. | ||||||||||
5.2.3 | This Clawback Policy supersedes and replaces any previous clawback (or “compensation recovery”) provisions in existing policies. |
6.0 | APPENDICES | |||||||||||||
Appendix A – Modification History | ||||||||||||||
Approvals/Amendments | Date | |||||||||||||
Approved by Board of Directors of Sun Life Financial Inc. | Nov 1, 2023 | |||||||||||||
A. HOW WE REPORT OUR RESULTS | J. CAPITAL AND LIQUIDITY MANAGEMENT | ||||||||||
1. Capital | |||||||||||
B. OVERVIEW | 2. Capital Adequacy | ||||||||||
1. Strategy | 3. Shareholder Dividends | ||||||||||
2. Financial Objectives | 4. Principal Sources and Uses of Funds | ||||||||||
3. Sustainability Plan | 5. Liquidity | ||||||||||
4. Acquisitions and Other | |||||||||||
K. RISK MANAGEMENT | |||||||||||
C. FINANCIAL SUMMARY | 1. Risk Management Framework | ||||||||||
2. Risk Governance | |||||||||||
D. PROFITABILITY | 3. Risk Universe | ||||||||||
4. Risk Appetite | |||||||||||
E. GROWTH | 5. Risk Management Policies | ||||||||||
1. Sales, Gross Flows and Value of New Business | 6. Risk Management Process | ||||||||||
2. Assets Under Management | 7. Three Lines of Defence | ||||||||||
8. Risk Culture and Philosophy | |||||||||||
F. CONTRACTUAL SERVICE MARGIN | 9. Risk Categories | ||||||||||
G. FINANCIAL STRENGTH | L. ADDITIONAL FINANCIAL DISCLOSURE | ||||||||||
1. Selected Annual Information | |||||||||||
H. PERFORMANCE BY BUSINESS GROUP | 2. Items related to Statement of Operations | ||||||||||
1. Asset Management |
3. Items related to Statement of Financial Position | ||||||||||
2. Canada |
4. Fourth Quarter 2023 Profitability |
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3. U.S. |
5. Fourth Quarter 2023 Growth |
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4. Asia |
6. Previous Quarters | ||||||||||
5. Corporate | |||||||||||
M. NON-IFRS FINANCIAL MEASURES | |||||||||||
I. INVESTMENTS | |||||||||||
1. Investment Profile | N. ACCOUNTING AND CONTROL MATTERS | ||||||||||
2. Debt Securities | 1. Critical Accounting Policies and Estimates | ||||||||||
3. Equities | 2. Changes in Accounting Policies | ||||||||||
4. Mortgages and Loans | 3. Disclosure Controls and Procedures | ||||||||||
5. Derivatives | |||||||||||
6. Investment Properties | O. LEGAL AND REGULATORY PROCEEDINGS | ||||||||||
7. Loss Allowance and Provision for Credit Loss | |||||||||||
P. FORWARD-LOOKING STATEMENTS | |||||||||||
Management's Discussion and Analysis |
A. How We Report Our Results |
B. Overview |
IFRS 17 and IFRS 9 |
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Measure(1) |
Medium-term
financial objectives(2)(3)
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2-Year(2)(4) |
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Underlying EPS growth
Growth in EPS reflects the Company's focus on generating sustainable earnings for shareholders.
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8%-10% | 11% | ||||||
Underlying ROE
ROE is a significant driver of shareholder value and is a major focus for management across all businesses.
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18%+ | 17.4% | ||||||
Underlying dividend payout ratio
Payout of capital versus shareholder value, based on underlying net income.
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40%-50% | 48% |
C. Financial Summary |
($ millions, unless otherwise noted) | |||||||||||
Profitability | 2023 | 2022(1) |
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Net income (loss) | |||||||||||
Underlying net income (loss)(2) |
3,728 | 3,369 | |||||||||
Reported net income (loss) - Common shareholders |
3,086 | 2,871 | |||||||||
Diluted earnings per share ("EPS") ($) | |||||||||||
Underlying EPS (diluted)(2) |
6.36 | 5.75 | |||||||||
Reported EPS (diluted) |
5.26 | 4.89 | |||||||||
Return on equity ("ROE") (%) | |||||||||||
Underlying ROE(2) |
17.8% | 17.0% | |||||||||
Reported ROE(2) |
14.7% | 14.5% | |||||||||
Growth | 2023 | 2022(1) |
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Sales | |||||||||||
Wealth sales & asset management gross flows(2)(3) |
173,820 | 198,650 | |||||||||
Group - Health & Protection sales(2)(4) |
2,942 | 2,554 | |||||||||
Individual - Protection sales(2) |
2,491 | 1,767 | |||||||||
Total AUM ($ billions)(2) |
1,399.6 | 1,318.6 | |||||||||
New business Contractual Service Margin ("CSM")(2) |
1,253 | 762 | |||||||||
Financial Strength | 2023 |
As at
January 1, 2023(6)
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LICAT ratios(5)(6) |
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Sun Life Financial Inc. | 149% | 142% | |||||||||
Sun Life Assurance(7) |
141% | 139% | |||||||||
Financial leverage ratio(2)(8) |
21.5% | 23.7% | |||||||||
Book value per common share ($) | 36.51 | 34.60 | |||||||||
Weighted average common shares outstanding for basic EPS (millions) | 586 | 586 | |||||||||
Closing common shares outstanding (millions) | 585 | 586 |
D. Profitability |
($ millions, after-tax) | 2023 | 2022(1) |
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Underlying net income by business type(2): |
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Wealth & asset management | 1,726 | 1,673 | ||||||
Group - Health & Protection | 1,313 | 963 | ||||||
Individual - Protection | 1,137 | 1,000 | ||||||
Corporate expenses & other | (448) | (267) | ||||||
Underlying net income(2) |
3,728 | 3,369 | ||||||
Add: Market-related impacts(1) |
(454) | (21) | ||||||
Assumption changes and management actions ("ACMA") |
36 | (168) | ||||||
Other adjustments |
(224) | (309) | ||||||
Reported net income - Common shareholders | 3,086 | 2,871 | ||||||
Underlying ROE(2) |
17.8% | 17.0% | ||||||
Reported ROE(2) |
14.7% | 14.5% | ||||||
Notable items attributable to reported and underlying net income(2): |
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Mortality | 6 | (152) | ||||||
Morbidity | 324 | 175 | ||||||
Lapse and other policyholder behaviour ("policyholder behaviour") | (24) | (14) | ||||||
Expenses | (72) | 2 | ||||||
Credit(3) |
(34) | (28) | ||||||
Other(4) |
34 | 25 |
Exchange rate | Quarterly results | Full year | ||||||||||||||||||
Q4'23 | Q3'23 | Q2'23 | Q1'23 | 2023 | 2022 | |||||||||||||||
U.S. Dollar - Average |
1.361 | 1.341 | 1.343 | 1.352 | 1.350 | 1.301 | ||||||||||||||
U.S. Dollar - Period end |
1.325 | 1.358 | 1.324 | 1.352 | 1.325 | 1.355 |
E. Growth |
($ millions) | 2023 | 2022 | ||||||
Wealth sales & asset management gross flows by business segment(1) |
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Asset Management gross flows |
151,068 | 172,881 | ||||||
Canada wealth sales & asset management gross flows(2) |
15,039 | 14,629 | ||||||
Asia wealth sales & asset management gross flows | 7,713 | 11,140 | ||||||
Total wealth sales & asset management gross flows(1) |
173,820 | 198,650 | ||||||
Group - Health & Protection sales by business segment(1) |
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Canada | 591 | 533 | ||||||
U.S.(3) |
2,275 | 1,948 | ||||||
Asia(4) |
76 | 73 | ||||||
Total group sales(1) |
2,942 | 2,554 | ||||||
Individual - Protection sales by business segment(1) |
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Canada | 609 | 496 | ||||||
Asia | 1,882 | 1,271 | ||||||
Total individual sales(1) |
2,491 | 1,767 | ||||||
CSM - Impact of new insurance business ("New business CSM")(1) |
1,253 | 762 |
($ millions) | 2023 | 2022 | ||||||
Assets under management(1) |
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General fund assets | 204,789 | 198,316 | ||||||
Segregated funds | 128,452 | 125,292 | ||||||
Third-party assets under management(1) |
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Retail |
567,657 | 527,617 | ||||||
Institutional, managed funds and other |
537,424 | 507,673 | ||||||
Total third-party AUM(1) |
1,105,081 | 1,035,290 | ||||||
Consolidation adjustments | (38,717) | (40,337) | ||||||
Total assets under management(1) |
1,399,605 | 1,318,561 |
($ billions) | 2023 | 2022 | ||||||
Net flows for Segregated fund and Third-party AUM: |
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MFS |
(38.9) | (43.4) | ||||||
SLC Management | 12.5 | 21.4 | ||||||
Canada, Asia and other | (0.5) | 0.5 | ||||||
Total net flows for Segregated fund and Third-party AUM |
(26.9) | (21.5) |
F. Contractual Service Margin |
For the full year ended | For the full year ended | |||||||
($ millions) | December 31, 2023 | December 31, 2022 | ||||||
Beginning of Period | 10,865 | 9,797 | ||||||
Impact of new insurance business(1) |
1,253 | 762 | ||||||
Expected movements from asset returns & locked-in rates(1) |
560 | 362 | ||||||
Insurance experience gains/losses(1) |
67 | 89 | ||||||
CSM recognized for services provided | (919) | (861) | ||||||
Organic CSM Movement(1) |
961 | 352 | ||||||
Impact of markets & other(1) |
(38) | 37 | ||||||
Impact of change in assumptions(1) |
364 | 431 | ||||||
Currency impact | (104) | 248 | ||||||
Disposition(2) |
(262) | — | ||||||
Total CSM Movement | 921 | 1,068 | ||||||
Contractual Service Margin, End of Period | 11,786 | 10,865 |
At and For the Year Ended December 31, 2023 |
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($ millions) | Reported net income impacts (Post-tax)(1)(2)(3) |
Deferred in CSM (Pre-tax)(2)(3)(4) |
Comments | ||||||||
Mortality/morbidity | (98) | 179 |
Updates to reflect mortality/morbidity experience in all jurisdictions. The largest items were favourable mortality impacts in the UK Annuities in the U.S and GRS in Canada.
These were offset partially by adverse mortality in In-force Management in the U.S. Mortality updates impacting CSM favourably are funded at locked-in rates that are lower than current rates resulting in a negative net income impact. Additionally, favourable morbidity impacts in Group Benefits in the U.S. were largely offset by unfavourable morbidity updates in Sun Life Health in Canada.
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Policyholder behaviour | (91) | (274) | Updates to reflect lapse and policyholder behaviour in all jurisdictions. The largest items were an adverse lapse impact in Individual Term and Universal Life in Canada, and in International, Hong Kong and Vietnam in Asia. |
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Expense | 7 | (171) | Updates to reflect higher costs related to IFRS 17 infrastructure and higher costs in Canada. | ||||||||
Financial | 116 | 202 | Updates to various financial related assumptions including the ultimate risk-free rate. |
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Modelling enhancement and other | 102 | 428 | Various enhancements and methodology changes. The largest items were favourable impacts from refinements to the modelling of guarantees for the Individual Par in Canada and International Universal Life in Asia, as well as modelling enhancements in Vietnam in Asia offset partially by a refinement in Sun Life Health in Canada and to reinsurance and other provisions in Hong Kong in Asia. |
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Total impact of change in assumptions |
36 | 364 |
G. Financial Strength |
IFRS 17 and IFRS 9 | IFRS 4 and IAS 39(1) |
||||||||||
($ millions, unless otherwise stated) | 2023 |
As at
January 1, 2023(2)
|
2022 | ||||||||
LICAT ratio | |||||||||||
Sun Life Financial Inc.(1)(2) |
149% | 142% | 130% | ||||||||
Sun Life Assurance(1)(2) |
141% | 139% | 127% | ||||||||
Capital |
|||||||||||
Subordinated debt | 6,178 | 6,676 | 6,676 | ||||||||
Innovative capital instruments(3) |
200 | 200 | 200 | ||||||||
Equity in the participating account | 457 | 268 | 1,837 | ||||||||
Non-controlling interests | 161 | 90 | 90 | ||||||||
Preferred shares and other equity instruments | 2,239 | 2,239 | 2,239 | ||||||||
Common shareholders' equity(4) |
21,343 | 20,290 | 25,211 | ||||||||
Contractual Service Margin(2)(5) |
11,786 | 10,865 | |||||||||
Total capital(1)(2) |
42,364 | 40,628 | 36,253 | ||||||||
Financial leverage ratio(1)(5)(6) |
21.5% | 23.7% | 25.1% | ||||||||
Dividend | |||||||||||
Underlying dividend payout ratio(1)(6) |
47% | 47% | 44% | ||||||||
Dividends per common share ($) | 3.000 | 0.720 | 2.760 | ||||||||
Book value per common share ($)(1) |
36.51 | 34.60 | 42.99 |
A.M. Best | DBRS | Moody's | Standard & Poor's | |||||||||||
January 31, 2024 | A+ | AA | Aa3 | AA | ||||||||||
January 31, 2023 | A+ | AA | Aa3 | AA |
H. Performance by Business Segment |
($ millions) | 2023 | 2022(1) |
||||||
Underlying net income (loss)(2) |
||||||||
Asset Management | 1,239 | 1,238 | ||||||
Canada | 1,376 | 1,063 | ||||||
U.S. | 890 | 698 | ||||||
Asia | 600 | 539 | ||||||
Corporate | (377) | (169) | ||||||
Total underlying net income (loss)(2) |
3,728 | 3,369 | ||||||
Reported net income (loss) - Common shareholders | ||||||||
Asset Management | 1,067 | 1,148 | ||||||
Canada | 1,252 | 1,241 | ||||||
U.S. | 576 | 532 | ||||||
Asia | 511 | 210 | ||||||
Corporate | (320) | (260) | ||||||
Total reported net income (loss) - Common shareholders | 3,086 | 2,871 |
Our Asset Management business group is comprised of MFS and SLC Management. MFS is a premier global asset manager offering a comprehensive selection of financial products and services that deliver superior value, actively managing assets for retail and institutional investors around the world. SLC Management is a global asset manager with capabilities across fixed income and alternative asset classes including public and private fixed income, real estate equity and debt, and infrastructure equity, and manages assets on behalf of institutional investors and HNW Clients around the world. |
•We ended 2023 with $1,015.9 billion in assets under management consisting of $792.8 billion (US$598.6 billion) in MFS and $223.1 billion in SLC Management.
•Total Asset Management net outflows of $26.4 billion reflected net outflows of $38.9 billion (US$28.8 billion) from MFS partially offset by SLC Management net inflows of $12.5 billion.
|
MFS
•MFS generated solid net income and sustained a strong pre-tax net operating profit margin(1), despite challenging market conditions.
•Delivered strong long-term investment performance with 97%, 95% and 30% of MFS' U.S. retail mutual fund assets ranked in the top half of their Morningstar categories based on ten-, five- and three-year performance, respectively, as at December 31, 2023.
•During the year, MFS became the 9th largest fund group(2) for the U.S. retail mutual fund industry based on AUM.
•MFS is preparing to go to market with active exchange traded funds ("ETFs") over the next year, continuing to expand the diverse range of investment products offered to Clients.
|
SLC Management
•On February 1, we completed the acquisition of a 51%(3) interest in Advisors Asset Management, Inc. (“AAM”), a leading independent U.S. retail distribution firm, with the option to acquire the remaining interest starting in 2028. We also entered into a strategic partnership with Scotiabank in Q3'23 to distribute alternative investment capabilities to the Canadian retail market. AAM's strong U.S. retail distribution capabilities, coupled with the strategic partnership with Scotiabank, provides an attractive opportunity for SLC Management to meet the growing demand for alternative assets among HNW investors.
•AAM announced it will distribute BGO IREIT(4), a non-traded real estate investment trust launched by BentallGreenOak (“BGO”), and Crescent Private BDC, a non-traded closed-end fund launched by Crescent Capital Group LP ("Crescent"), in early 2023, highlighting the strategic benefit of adding this distribution channel.
•BGO achieved a successful final close of its third UK Secured Lending Fund, with a total of £1.4 billion in commitments from over 25 global institutional investors. The fund surpassed its initial target and has become one of the largest European fundraises for a debt strategy entirely focused on the UK.
•Crescent achieved a successful final close of its eighth private credit solutions fund(5), raising US$8 billion in investable capital. The fund exceeded its initial target and has become the largest capital raise in Crescent’s history.
•SLC Management continued to demonstrate its commitment to sustainable investing with BGO winning a number of awards including the 2023 ENERGY STAR® Partner of The Year – Sustained Excellence Award by the U.S. Environmental Protection Agency and the U.S. Department of Energy for the 13th consecutive year, and with InfraRed Capital Partners (“InfraRed”) continuing to invest capital in companies helping to build a sustainable future.
|
MFS: Continue to deliver superior investment performance while allocating capital responsibly for our Clients
MFS' active management strategy focuses on delivering value to our Clients over the long-term. Our relative performance provides us with a strong competitive position:
•MFS is well-positioned to attract flows from all Client sectors that are seeking risk-managed capital appreciation over the long-term based on our disciplined, long-term approach. We are engaging Clients to align with MFS to focus on longer investment horizons, to leverage our proven ability to deliver over benchmark performance through a market cycle.
•Our strong leadership on ESG is embedded in our overall investment approach of allocating capital responsibly on behalf of our Clients.
•Our continued strategic focus to build out institutional fixed income product and sales capabilities and broaden our non-U.S. retail initiatives enables us to meet Clients' unique and local needs.
•MFS strives to maintain margins in the top quartile of active managers while maintaining our commitment to provide long-term value to Clients.
•We continue to focus on diversity at all levels and promoting an inclusive culture.
|
SLC Management: Help investors meet their investment objectives by offering a broad suite of alternative asset classes and fixed income strategies
We are well-positioned to take advantage of key trends in our target markets:
•Institutional investors continue to increase allocations to alternative investments and fixed income.
•Growing demand for alternative investments, including demand among North American HNW retail investors.
•Consolidation of investment manager relationships by institutional investors.
•Realizing the synergies from alternative asset management and insurance capabilities.
•An increasing focus by some investors on ESG and sustainable investing.
Our strategy is to continue to deliver superior investment performance, expand and deepen our distribution relationships, and build out our product lineup, while retaining our top talent. SLC Management is positioned for growth over the medium-term; our objectives(1) are to achieve AUM of $225 billion, operating margin of 30%-35%, and underlying net income of $235 million by 2025. We offer our Clients a compelling suite of investment capabilities to meet their needs, including:
•Leading public and private fixed income capabilities, spanning both investment grade and alternative credit
•Global real estate expertise across both equity and debt investments, and
•Global infrastructure capabilities.
|
Outlook | ||
MFS
The potential for a global recession remains. We are in an environment of slowing growth with capital and labour costs remaining high, which creates the need for more companies to recapitalize at higher rates in the face of softer revenue growth. This will continue to create a more challenging environment to generate value in the short to medium-term. Companies who can operate successfully in this more challenging, higher cost environment will be rewarded by investors. This could create greater opportunities for active managers to outperform benchmarks that have not been present. MFS employs an investment philosophy that involves a long-term approach and looks across the complete business cycle. Our scale, proven long-term track record and broad product portfolios, coupled with our investment philosophy, position us well to deliver strong results over a market cycle. Our expense structure leverages significant variable costs based on assets, sales or profitability, and as a result a majority of our expense base adjusts with market dynamics. In addition, we will continue to be diligent with discretionary spending while investing in strategic initiatives that help grow the business over the long-term.
SLC Management
With current economic and geopolitical uncertainty, we expect to see more volatility in equity markets driven by higher-for-longer interest rates and continued uncertainty on stabilization of rates. These macroeconomic headwinds are expected to moderate our ability to raise capital as investors rebalance their portfolios, or defer committing further capital, as well as to deploy capital given the challenging environment for transactions. However, we expect to see continued demand for yield-orientated fixed income and alternative assets classes, as these asset types continue to provide an opportunity for portfolio diversification, a potential hedge against inflation, and a reduction in overall risk exposure across investments. We believe that we are well positioned to meet this demand with our platform of world-class investment capabilities, complimentary businesses that drive product and distribution opportunities, and our ability to leverage global resources. The acquisition of a majority stake in AAM and partnership with Scotia Global Wealth Management provides further momentum to SLC Management to grow and expand our retail HNW business in North America. The investment capabilities we use for our Clients are the same capabilities that we use in managing the general account of Sun Life; this facilitates co-investment opportunities that result in an alignment of interest with our Clients and enables SLC Management's speed to market for products.
|
Business Type | Business Unit | Description | Market position | ||||||||
Asset Management | MFS | • Actively manages assets for retail and institutional investors, including pension plans, sovereign wealth funds, monetary authorities, and endowments and foundations. • Retail products are distributed through financial advisors, brokerages and other professionals.
• Institutional products are distributed by an internal sales force, which is aided by a network of independent consultants.
|
• US$599 billion in AUM
• The 9th largest U.S. Retail funds manager(1)
|
||||||||
SLC Management |
• SLC Management delivers public and private credit, fixed income, real estate and infrastructure solutions to Clients through a group of affiliate managers, including:
• BentallGreenOak, a global real estate investment manager.
• InfraRed Capital Partners, a global infrastructure and real estate investment manager headquartered in London, UK.
• Crescent Capital Group, a U.S.-based global alternative credit investment manager.
• SLC Management, a North American institutional asset manager specializing in investment grade public and private fixed income portfolios.
• Institutional products are distributed by an internal sales force, which is aided by a network of independent consultants. The acquisition of a majority stake in AAM provides access to U.S. retail distribution and allows SLC Management to meet the growing demand for alternative assets among U.S. HNW investors. SLC Management also entered into a strategic partnership with Scotiabank to distribute alternative investment capabilities to the Canadian retail market through Scotia Global Wealth Management.
|
• $223 billion in AUM |
Asset Management (C$ millions) | 2023 | 2022 | ||||||
Underlying net income(1) |
1,239 | 1,238 | ||||||
Add: Market-related impacts | (47) | (22) | ||||||
Management's ownership of MFS shares |
12 | 115 | ||||||
Acquisition, integration and restructuring(2)(3) |
(114) | (176) | ||||||
Intangible asset amortization | (23) | (14) | ||||||
Other |
— | 7 | ||||||
Reported net income - Common shareholders | 1,067 | 1,148 | ||||||
Assets under management (C$ billions)(1) |
1,015.9 | 952.0 | ||||||
Gross flows (C$ billions)(1) |
151.1 | 172.9 | ||||||
Net flows (C$ billions)(1) |
(26.4) | (22.0) | ||||||
MFS (C$ millions) |
||||||||
Underlying net income(1) |
1,044 | 1,080 | ||||||
Add: Management's ownership of MFS shares |
12 | 115 | ||||||
Reported net income - Common shareholders | 1,056 | 1,195 | ||||||
Assets under management (C$ billions)(1) |
792.8 | 742.3 | ||||||
Gross flows (C$ billions)(1) |
126.4 | 140.6 | ||||||
Net flows (C$ billions)(1) |
(38.9) | (43.4) | ||||||
MFS (US$ millions) | ||||||||
Underlying net income(1) |
773 | 832 | ||||||
Add: Management's ownership of MFS shares |
9 | 87 | ||||||
Reported net income - Common shareholders | 782 | 919 | ||||||
Pre-tax net operating margin for MFS(1) |
38% | 39% | ||||||
Average net assets (US$ billions)(1) |
572.9 | 584.8 | ||||||
Assets under management (US$ billions)(1)(4) |
598.6 | 547.9 | ||||||
Gross flows (US$ billions)(1) |
93.7 | 108.4 | ||||||
Net flows (US$ billions)(1) |
(28.8) | (33.1) | ||||||
Asset appreciation (depreciation) (US$ billions) | 79.5 | (111.8) | ||||||
SLC Management (C$ millions) | ||||||||
Underlying net income(1) |
195 | 158 | ||||||
Add: Market-related impacts | (47) | (22) | ||||||
Acquisition, integration and restructuring(2)(3) |
(114) | (176) | ||||||
Intangible asset amortization |
(23) | (14) | ||||||
Other |
— | 7 | ||||||
Reported net income (loss) - Common shareholders | 11 | (47) | ||||||
Fee-related earnings(1) |
290 | 237 | ||||||
Pre-tax fee-related earnings margin(1)(5) |
24% | 24% | ||||||
Pre-tax net operating margin(1)(5) |
22% | 23% | ||||||
Assets under management (C$ billions)(1) |
223.1 | 209.6 | ||||||
Gross flows - AUM (C$ billions)(1) |
24.6 | 32.3 | ||||||
Net flows - AUM (C$ billions)(1) |
12.5 | 21.5 | ||||||
Fee earning assets under management ("FE AUM") (C$ billions)(1) |
176.9 | 164.4 | ||||||
Gross flows - FE AUM (C$ billions)(1) |
24.6 | 33.0 | ||||||
Net flows - FE AUM (C$ billions)(1) |
14.2 | 25.2 | ||||||
Assets under administration ("AUA") (C$ billions)(1) |
49.8 | — | ||||||
Capital raising (C$ billions)(1) |
13.1 | 18.2 | ||||||
Deployment (C$ billions)(1) |
22.7 | 30.2 |
Our Canada business segment is a leading provider of protection, health, asset management and wealth solutions, providing products and services that deliver value to approximately 5.5 million Clients. We are the largest provider of benefits and pensions in the workplace, and offer a wide range of products to individuals via retail channels. We are focused on helping Canadians achieve lifetime financial security and live healthier lives. |
Advance our One Sun Client strategy
•Enhanced the Sun Life One Plan digital tool to enable Clients to directly update their financial roadmaps as frequently as they would like, while collaborating with their advisor on personalized goals. Approximately 140,000 financial roadmaps powered by Sun Life One Plan have been completed to date. We also launched self-serve Sun Life One Plan capabilities to GRS members in 2023.
•Continued to make it easier for Clients to do business with us by expanding digital capabilities, including increased feedback provided to Clients to help them track progress towards retirement goals, and integration of Lumino HealthTM provider search into Clients' claims journey removing manual input requirements, saving time and improving operational efficiency.
•Drove $2.4 billion in insurance coverage and $706 million in wealth deposits in Canada through nudges from our digital coach, Ella, an increase of 72% and 1%, respectively, over 2022. Ella delivers proactive and personalized interactions to help Clients achieve their health and financial goals.
|
Accelerate our wealth strategy
•SLGI Asset Management Inc. was awarded Wealth Professional Mutual Fund Provider of the year, demonstrating its commitment to consistently delivering superior advisor service and innovative investment solutions to Clients.
•Launched SLGI Virtual Xspace Retirement Hub for Advisors, a first of its kind virtual 3D platform offering advisors an immersive experience to engage meaningfully with high volumes of complex information, enhancing their education on holistic products and solutions available to meet Clients' evolving needs.
•We continue to expand our distribution capabilities through the creation of a securities investment dealer, Sun Life Canada Securities Inc. ("SLCSI"). We received approval from the Canadian Investment Regulatory Organization in the fourth quarter, and expect an operational launch in 2024. Our expanded offerings in SLCSI will broaden access to wealth solutions to help Clients achieve lifetime financial security.
•Expanded our suite of sustainable wealth and asset management product offerings with the launch of three sustainability funds.
|
Strengthen and expand our health business
•Completed the acquisition of Dialogue Health Technologies Inc. (“Dialogue”), Canada’s premier virtual health care and wellness platform, providing affordable on-demand access to quality care, which will help us empower Canadians with access to the care they need from the convenience of their home.
•Launched Lumino HealthTM Pharmacy, a new online pharmacy app, which will help group benefits plan members consult a knowledgeable pharmacist by chat or a phone call and have medications delivered to their door free of charge. This service helps Clients to keep track of their medications, usage, refills, and sends them important notifications regarding their prescriptions. Expanding on this launch, we also announced a minority investment in Simpill Health Group Inc., operating as Pillway, the virtual pharmacy provider for Lumino HealthTM Pharmacy.
•Finalized a contract with the Government of Canada to be the administrator of the Canadian Dental Care Plan (“CDCP”), which will provide access to dental care for Canadians in need. Through the CDCP, up to nine million additional Canadians will have access to dental care.
•Following a successful pilot program, launched Mental Health Coach ("MHC"), a digital tool that provides a personalized and proactive approach to help group benefits members take action and improve their mental well-being. Approximately 90% of pilot participants experienced a positive mental health outcome after using MHC.
•In support of our focus on inclusive workplace benefits, we are making it easier for plan members to understand and access culturally relevant covered health expenses under the standard Personal Spending Accounts (“PSA”). For example, we created a new Indigenous Health category which outlines and creates awareness that Sun Life provides coverage for traditional medicines, fees and supplies for Indigenous ceremonies, and more under the PSA.
•Conducted a pilot of our Diabetes Signature Solutions products and expanded the program beyond Type 2 diabetes to also include Type 1 diabetes, gestational diabetes and pre-diabetes. Full launch of the products is expected in 2024, offering Canadians with diabetes flexibility to get the coverage they need and live healthier lives.
•Continue to be a leader in gender affirmation coverage, adding increased annual maximums options and creating a Sun Life specific Prior Authorization process to make coverage more accessible.
|
Transform retail distribution
•Expanded our reach through Prospr by Sun Life by partnering with national mortgage brokers to offer Canadians access to protection advice and solutions to provide lifetime financial security to them and their beneficiaries.
|
Sustain Financial Discipline
•Contributed to Sun Life's strong capital position with proactive management actions, including the optimization of capital in our investment portfolio and the sale of the sponsored markets business(1).
•Made it easier for Clients to do business with us and achieved operational efficiencies by digital straight through processing 84% of group benefits health and dental claims and 57% Chatbot inquires throughout the year.
|
Advance our One Sun Client strategy
•Support Clients across health, wealth and protection with holistic advice and solutions that build Sun Life Clients for life.
•Broaden and deepen Client relationships through personalized, seamless experiences across all Sun Life channels, for example through the use of Sun Life One Plan, and integrated health ecosystem offerings, for example Lumino Health™ Pharmacy.
|
Accelerate our wealth strategy
•Position SLGI Asset Management Inc. as a growth engine within Canada, providing third party and internal channels with more convenient access to investment solutions and a product suite to meet their asset management needs.
•Accelerate progress towards being the retirement income and estate solutions provider of choice with a focus on advice, experience and differentiated products.
•Focus on Client experience through enhanced planning tools and process simplification to drive asset consolidation and retention.
•Continue to be a market leader in the growing Canadian pension risk transfer market, with customized solutions to meet employers’ needs in managing and de-risking their defined benefit pension plans.
|
Strengthen and expand our health business
•Empower Canadians to act earlier to prevent and mitigate health risks by expanding our health solutions, including leveraging the capabilities from the acquisition of Dialogue.
•Develop targeted solutions for Canadians living with chronic conditions, for example diabetes, to improve insurability and health outcomes.
•Ensure group benefits plans are inclusive and aligned with sponsor’s focus on diversity, equity and inclusion, and drawing awareness to women’s health.
•Continue to augment predictive underwriting models to minimize risk, using advanced data analytics and predictive modelling.
|
Transform retail distribution
•Continue to build an omni-channel retail distribution continuum tailored to targeted Client segments’ preferences and needs, including digital, hybrid, dedicated face-to-face and independent insurance advisor channels.
•Modernize our dedicated face-to-face advice channel through digital, data and analytics capabilities that enable personalized holistic Client experiences and improve advisor productivity.
•Grow and scale Prospr by Sun Life, driving new-to-Sun Life Client relationships, targeting Canadians that prefer engagement through a hybrid human/digital experience.
•Build on strong momentum in the independent insurance advisor market, scale and expand relationships with group plan sponsors to drive growth.
|
Sustain financial discipline
•Enhance advisor and Client experiences and drive operational efficiencies through digital initiatives such as straight-through processing and data consolidation.
•Seek low-cost, innovative opportunities focusing on capital and risk optimization.
|
Outlook | ||
Our diversified business, which address Clients' needs in asset and wealth management, life and health protection, and our multi-channel distribution, position us well to deepen Client relationships and capture new opportunities. We continue to enhance our offerings across our Clients’ health, wealth and protection journeys, enabled by investments in systems, distribution, and digital capabilities. We are confident that our leadership position and scale in Canada will continue to help us provide positive outcomes for Clients.
We are well positioned to manage through prevailing demographic, healthcare, technological and macroeconomic trends, through pricing discipline, diversified Client centric businesses, and prudent risk management.
|
Business Type | Business Unit | Description | Market position | ||||||||
Wealth & asset management |
Individual Wealth |
• Provides advice to individuals to help them and their families achieve lifetime financial security, leveraging a broad suite of wealth and insurance-based wealth solutions.
• Products distributed via multi-channel distribution model consisting of the SLFD network(1), third-party channels, including independent brokers and broker-dealers, and direct-to-consumer.
• SLGI manufactures wealth solutions for retail and institutional clients.
|
• 2nd in fixed product sales(2) and 4th place market position by total wealth deposits and premiums(2) |
||||||||
Group Retirement Services |
• Provides defined contribution pension plans and defined benefit solutions in Canada to employers of all sizes.
• Leverages our worksite advantage to offer voluntary savings plans, including post-employment plans, to those members exiting their employer-sponsored plans.
• Defined Benefit Solutions offers an expanding range of innovative de-risking solutions for defined benefit pension plans.
• Products distributed by sales representatives in collaboration with a multi-channel distribution network of pension consultants and advisors.
• Planning and asset consolidation capabilities for current and former plan members to benefit from a simplified and seamless experience with a single provider.
|
• Ranked 1st in the defined contribution market based on total Capital Accumulation Plan assets for the 21st consecutive year(3)
• Ranked 3rd in the defined benefit solutions annuity market(2)
|
|||||||||
Group - Health & Protection |
Sun Life Health |
• Provides Clients with personalized and on-demand digital health experiences, by leveraging our acquisition of Dialogue, that will empower them to take action on their health earlier, ultimately improving their health outcomes.
• Offers group insurance products in Canada, including life, dental, extended health care, disability and critical illness, to employers of all sizes.
• Leverages our worksite advantage to offer voluntary benefits solutions to individual plan members, including post-employment life and health plans.
• Products distributed by sales representatives in collaboration with independent advisors, benefits consultants and the SLFD network.
|
• Leading group benefits provider in Canada for the 11th consecutive year(4) |
||||||||
Individual - Protection | Individual Insurance |
• Offers comprehensive life and health insurance products to individuals to help them and their families achieve lifetime financial security, and live healthier lives.
• Products distributed via multi-channel distribution model consisting of the SLFD network, third-party channels, including independent brokers and broker-dealers, and direct-to-consumer including Prospr by Sun Life.
|
• Leading provider in the individual life and health market, by premiums, for the 3rd consecutive year (2) |
($ millions) | 2023 | 2022(1) |
||||||
Wealth & asset management(2) |
432 | 364 | ||||||
Group - Health & Protection(2) |
550 | 375 | ||||||
Individual - Protection(2) |
394 | 324 | ||||||
Underlying net income(2) |
1,376 | 1,063 | ||||||
Add: Market-related impacts(1) |
(243) | 330 | ||||||
ACMA | 59 | (228) | ||||||
Acquisition, integration and restructuring | 76 | (2) | ||||||
Intangible asset amortization | (16) | (12) | ||||||
Other |
— | 90 | ||||||
Reported net income - Common shareholders(1) |
1,252 | 1,241 | ||||||
Underlying ROE (%)(2) |
21.4% | 16.3% | ||||||
Reported ROE (%)(2) |
19.4% | 19.1% | ||||||
Wealth sales & asset management gross flows(2)(3) |
15,039 | 14,629 | ||||||
Group - Health & Protection sales(2) |
591 | 533 | ||||||
Individual - Protection sales(2) |
609 | 496 |
Sun Life U.S. is one of the largest providers of employee and government benefits in the U.S., serving more than 50 million Americans with disability, life, supplemental health, medical stop-loss insurance, dental and vision benefits through employers, industry partners and government programs such as Medicaid, Medicare Advantage, and the Children's Health Insurance Program ("CHIP"). Services include absence management, dental care, and healthcare navigation. In addition, our U.S. business manages an in-force block of approximately 225,000 individual life insurance and annuity policies as well as a block of run-off reinsurance. |
Growing our business
•Sun Life U.S. delivered strong double-digit growth in underlying earnings, sales, and revenue again in 2023, driven by the successful execution of our strategy to help Clients access the health care and coverage they need as well as contributions from the DentaQuest acquisition.
•Recorded more than US$650 million in total new dental sales since closing the DentaQuest acquisition on June 1, 2022, including the largest Medicare Advantage sale in DentaQuest history in 2023. Commercial dental sales also increased 55% in 2023 as we leverage our combined strengths from the DentaQuest acquisition.
•Employee Benefits revenue increased 14% compared to 2022, reflecting strong sales and persistency results, supported by investments in products and technology, higher average premiums per case and disciplined pricing.
•Increased supplemental health premiums by 34% year-over-year and recognized in 2023 as the Voluntary Sales Growth Leader in the large carrier category by Eastbridge Consulting(1). Voluntary benefits include supplemental health benefits that help members pay for costs that may not be covered by their medical plans.
|
Helping Clients access the health care and coverage they need
•PinnacleCare's personalized care navigation solutions helped members get timely access to high quality healthcare and provided them with the knowledge to make confident decisions about their health. In 2023, more than 50% of the appointments secured for members facing a new or progressing cancer diagnosis were expedited by Health Navigator to a date sooner than the patient was able to schedule through typical hospital access channels.
•Expanded our Advantage Dental+ practices with five new offices in Texas. These practices are focused on providing high quality, preventive-focused oral health care to children with Medicaid coverage.
•Announced a relationship with Philadelphia-based Independence Health Group to exclusively provide medical stop-loss insurance to their self-funded group medical Clients to help protect against large, unpredictable health care expenses.
•Established a new preferred partnership with OptiMed Health Partners(2) to make specialty drugs more accessible and affordable for our stop-loss members. The new program will improve how specialty drugs are administered for members who need them, often in their own homes, while also managing rising health care costs.
•Launched an enhanced disability product suite specially designed for healthcare professionals, providing them with income replacement coverage that meets their specific needs.
•Launched two new commercial dental plan options that help members reduce out-of-pocket costs, encourage preventive care, and maximize their dental coverage.
•As the largest Medicaid dental benefits provider, DentaQuest was awarded four new Medicaid contracts, supporting our mission to provide access to dental care for families and children in underserved communities.
•Announced a partnership with in-home, tech-enabled medical care provider Somatus to provide one-on-one support to our members with chronic kidney disease and congestive heart failure, two common high-cost conditions.
•Established a partnership with Virtual MeTM(3) to provide our Health Navigator product through their telehealth services that cater to business clients, as well as individuals who are underinsured or uninsured.
|
Making care and benefits easier through digital solutions
•Expanded our partnership with AbleTo, a leading provider of high-quality, evidence-based virtual mental health therapy and coaching solutions, to add a digital, on-demand wellness program for our group life insurance members, supporting emotional and mental health.
•Partnered with Goodpath, an integrative, virtual clinic, to provide access to whole-person care services for our disability members to improve treatment for back and musculoskeletal conditions and long COVID-19.
•Extended our partnership with Teledentistry.com to include DentaQuest members, offering members in selected states 24/7 virtual access to dental providers, making it easier to get dental care and advice digitally.
•Improved the stop-loss underwriting process by introducing an advanced digital underwriting tool in the U.S. Leveraging this tool, which uses machine learning, we were able to provide medical stop-loss to more Clients.
•Enhanced Sun Life Onboard, our fully digital benefits implementation tool for employers and brokers, with the launch of our Digital Smart Form. This new digitally guided form captures information needed to complete employer benefits setup, which has reduced the time it takes Clients to complete onboarding paperwork from six to three days.
|
Helping Clients access the health care and coverage they need
•Extend our leadership position in medical stop-loss and innovative risk management solutions for self-funded employers by continuing to deliver complementary health-adjacent offerings, including Health Navigator powered by PinnacleCare, to help members with serious conditions get the care they need, achieve better health outcomes, and reduce costs.
•Leverage DentaQuest's scale and expertise to provide quality oral health to all and help Americans live healthier lives, continue to grow in government programs, and become a leader in commercial dental through our leading capabilities.
•Focus employee benefits offerings on health and productivity through expanded and enhanced offerings across disability, absence, life, and supplemental health to provide income protection, fill gaps in coverage, and help Clients get the care they need so they can recover and get back to work and to their lives.
•Help employers comply with complex regulations and provide more Americans with access to paid family and medical leave.
•Drive growth in FullscopeRMS by leveraging our expertise, scale, and suite of turnkey solutions for insurance and health plan partners, to improve coverage for members.
|
Making care and benefits easier through digital solutions
•Expand our ability to integrate with other major platforms in the health and benefits ecosystem, delivering a better Client experience.
•Drive digital expansion through new capabilities and partnerships while leveraging existing assets to deliver predictive and personalized analytics to help Clients make decisions that are right for them.
•Leverage digital tools to increase Client interactions and virtual engagement, helping to better serve more members and deliver deeper insights for brokers and employers.
|
Help In-force Management policy-owners achieve lifetime financial security, while effectively managing our operations
•Continue to provide excellent service to our individual insurance and annuity policy owners.
•Optimize the value of the business by implementing opportunities to improve profitability, including expense efficiencies and alternative investment strategies.
•Effectively manage risk and capital through reinsurance and via product offerings for converting or maturing policies.
|
Outlook | ||
The U.S. health and employee benefits ecosystem is large and growing, with Clients becoming increasingly aware of the value of protection products and services. These markets remain competitive, and we are committed to growing profitably by leveraging our leadership positions, deep expertise, and new capabilities to extend further into the health benefits and services space in order to help Americans live healthier lives.
The strength of our U.S. business is reflected by the growth of our sales, revenues, and underlying net income in 2023. Significant enhancements to our products, systems, and digital capabilities over the past several years have contributed to our growth, in addition to our recent acquisitions.
We have a diversified business that served us well during the pandemic and is well-positioned for growth. While we have some short-term headwinds in Dental due to the state Medicaid redetermination process following the end of the federally declared Public Health Emergency, the business is growing, we have a strong new business pipeline, and the fundamentals remain strong. The DentaQuest integration remains on schedule, and we are on track to achieve our synergy targets. Health and Risk Solutions results have begun to moderate from pandemic-related performance but remain strong as we price our products responsibility, invest in health capabilities and leverage data analytics to differentiate our product and service offerings; this will enable us to continue to grow the business with strong profit margins. We are seeing significant improvements in Employee Benefits as COVID-19 impacts subside and the business benefits from ongoing pricing discipline, a strong focus on disability claims management, and investments in technology that have improved the Client experience and driven sales and strong persistency.
We continue to work with state and federal officials to increase access to benefits for our Clients. In addition to our focus on paid family and medical leave, we have increased our advocacy to expand dental coverage for beneficiaries of Medicaid and other government programs, and to keep employer-sponsored dental benefits affordable. We are also supporting the ERISA Advisory Council’s recommendation that Congress pass legislation to ensure mental health parity in long-term disability insurance, which is already required for health insurance. We continue to monitor possible legislative and regulatory changes to key areas that impact our business, such as data security and privacy, minimum loss ratios for employer-sponsored dental insurance plans, and state government contractor requirements.
|
Business Type |
Business Unit |
Description | Market position | ||||||||
Group - Health & Protection | Group Benefits |
• Employee Benefits provides group insurance products and services, including life, long-term and short-term disability, absence management, and voluntary and supplemental health insurance such as hospital indemnity, accident and critical illness. Includes our FullscopeRMS business, which provides turnkey risk management solutions for insurers and health plans.
• Health and Risk Solutions provides protection against large medical claims for employers who self-insure their employee health plans through medical stop-loss and health care navigation services to help members access care and improve health outcomes.
• Products distributed through more than 32,000 independent brokers and benefits consultants, supported by more than 165 employed sales representatives.
• Serves more than 60,000 employers in small, medium and large workplaces across the U.S. and approximately 19 million members(1).
|
• Largest independent medical stop-loss provider(2)
• Top 10 group life and disability benefits provider, including the leading turnkey disability provider(3)
|
||||||||
Dental |
• Provides Medicaid and Medicare Advantage products and services, as well as commercial group dental and vision solutions for employers of all sizes.
• Serves approximately 36 million members(4).
•Supports preventive dental care through its innovative Preventistry® model, which focuses on early and quality care, access, and measurable outcomes.
•Approximately 80 Advantage Dental+ practices, which are located in underserved communities to help increase access to dental care.
|
•Second largest Dental benefits provider in the U.S(5)
• Largest Medicaid dental benefits provider(6)
• The commercial Sun Life Dental Network® includes more than 130,000 unique providers and offers easy access to care with in-network cost benefits(7)
|
|||||||||
Individual - Protection |
In-force Management | • Manages approximately 80,000 individual life insurance policies, primarily universal life and participating whole life insurance, plus approximately 105,000 individual annuity policies that were originally sold in the UK. Also includes a block of approximately 40,000 policies from run-off reinsurance, which includes guaranteed minimum income, death benefits and individual long-term care, as well as personal accident policies and medical policies which are 100% retroceded. In-force Management is a run-off block with no new sales. |
(US$ millions) | 2023 | 2022(1) |
||||||
Group - Health & Protection(2) |
568 | 450 | ||||||
Individual - Protection(2)(3) |
95 | 81 | ||||||
Underlying net income(2) |
663 | 531 | ||||||
Add: Market-related impacts(1) |
(25) | (30) | ||||||
ACMA | (48) | 40 | ||||||
Acquisition, integration and restructuring(4) |
(87) | (103) | ||||||
Intangible asset amortization | (63) | (47) | ||||||
Other | — | 13 | ||||||
Reported net income - Common shareholders(1) |
440 | 404 | ||||||
Underlying ROE (%)(2) |
14.2% | 13.6% | ||||||
Reported ROE (%)(2) |
9.4% | 10.3% | ||||||
After-tax profit margin for Group Benefits (%)(2)(5) |
10.0% | 8.1% | ||||||
Group - Health & Protection sales(2)(6) |
1,680 | 1,464 | ||||||
Our pan Asia businesses provides us with a strong footprint to take advantage of the high growth prospects in the region. We operate in eight Asian markets, delivering value to over 28 million Clients. ASEAN markets provides asset management and wealth, protection and health solutions through a multi-channel distribution approach in the Philippines, Indonesia, and Vietnam. The Hong Kong market offers individual protection and wealth products through agency, broker and bancassurance distribution channels. Our Joint Ventures in China, India and Malaysia, provide asset management and wealth, protection and health solutions. High-Net-Worth markets provides individual protection solutions to High-Net-Worth families and individuals, with operations in Singapore and Bermuda. Regional Office represents Asia’s headquarters based in Hong Kong. |
Leverage distribution excellence to diversify our mix, build scale and deliver Client Impact
•Strong protection sales momentum with growth of 44%(1) and total weighted premium income ("TWPI") of $6.0 billion up 23% over prior year reflecting increased demand as pandemic-related travel restrictions were lifted in early 2023, continued contribution from High-Net-Worth through our selected origination strategy, and investment in a well-balanced distribution mix.
•In Hong Kong, we opened Sun Gateway prestige Client center, which offers High-Net-Worth Clients professional insurance consultancy and one-stop financial products and services, with a dedicated team of onsite financial advisors and client service representatives catering to their wealth management and protection needs as they evolve through different life stages.
•In the Philippines, we maintained our leadership position ranking first for new business premiums and total premiums in 2022, reflecting our strong product offering and exceptional service to Clients. Our focus on making a difference in the lives of our Clients was recognized by our Platinum award(2) for most trusted brand in the life insurance industry in the Philippines for the 14th consecutive year.
•We continue to execute our growth strategy through strategic investments. In Hong Kong, we increased our strategic investment in Bowtie Life Insurance Company Limited (“Bowtie”), Hong Kong’s first virtual insurer with a leading market share of approximately 30%(3) in Hong Kong’s direct sales channel.
•Bancassurance is an essential distribution channel in Asia to deliver on our Purpose. We entered into a 15-year exclusive bancassurance partnership in Hong Kong with Dah Sing Bank (“Dah Sing”). Under this partnership, Sun Life will be the exclusive provider of life insurance solutions to Dah Sing's approximately 570,000 retail banking customers, helping to fulfill their savings and protection needs at different life stages. This is Sun Life's first exclusive bancassurance partnership in Hong Kong and will be a valuable complement to our existing network of over 2,500 expert insurance advisors. Sales started in July 2023 and we saw good sales momentum from this partnership in the second half of the year.
|
Be a digital leader, enhancing the digital experience to transform the Client and advisor experience, and enable greater efficiency and scalability
•As part of our aspiration to deliver meaningful impact to Clients through their life journey, we are continuing to improve the digital service experience to make it easier for them to do business with us. We made substantial progress in 2023, with 87% of policy applications and 48% of claims submitted digitally, up four and ten percentage points from prior year, respectively.
•In Malaysia and Indonesia, Client satisfaction scores(4) increased substantially, up eleven and three percentage points, respectively, from prior year. Enhancing our digital capabilities, promoting digital awareness, driving Client centricity through enhancing products, process and solutions, as well as building trusted Client and advisor relationships, contributed to this improvement.
•Developed and launched Sun Life’s first digital direct channel for Tax Deductible Voluntary Contributions ("TVC") for MPF Clients in Hong Kong, resulting in a 28% increase in overall TVC applications from prior year. This also creates an opportunity to apply direct selling capabilities to other products across our business in Hong Kong.
•In Vietnam, we launched a new Point of Sale solution creating a seamless, integrated advisor and Client experience, and established product configuration capabilities to reduce time to market.
|
Embed sustainability into our business to drive value creation, positive impact, and align with our Purpose
•To enable our Clients to achieve lifetime financial security in a more sustainable manner, we expanded our range of ESG products. We launched two new products(1) in Hong Kong designed to offer long-term financial growth potential and flexible cash withdrawal options for Clients, which actively integrate ESG concepts into investment strategies. We also launched the first ESG investing-focused whole life protection plans(2) in Hong Kong, the first low-carbon focused MPF fund(3) in Hong Kong, and the first sustainability driven variable universal life ("VUL") fund(4) for Sun Life in the Philippines.
•We started Cloud adoption this year and made significant progress by completing Vietnam’s migration, contributing to the reduction of our data center footprint by 2025.
•To promote financial security and living healthier lives as a trusted and responsible business, we place ongoing efforts to raise financial literacy in the Philippines, Vietnam, Malaysia and Indonesia, host various health and wellness campaigns and programs in the region, and sponsor ongoing philanthropic initiatives, some examples include:
◦Brighter Health Blood Glucose Screening program providing free glucose screenings at over 200 pharmacies and free eye health checks at 44 outlets in Malaysia;
◦Brighter School Program to revitalize school facilities for 600 school residents and Build Our Kids Success program helping approximately 12,000 children to live healthier lives in Indonesia; and
◦Established the Hoops + Health partnership with Beyond Sport, a global sport-for-social-change foundation, to refurbish courts across six markets in Asia to enable safe spaces for youth sports programs.
|
Risk management capabilities and financial strength
•Demonstrating our focus on adopting prudent financial practices that protect our Clients while strengthening our risk management capabilities, Sun Life Hong Kong received approval from the Hong Kong Insurance Authority for the early adoption of the Risk-Based Capital (“RBC”) regime, effective end of June 2023. Sun Life Hong Kong is among a few insurers in Hong Kong that has transitioned to the RBC regime earlier than scheduled, reflecting our risk management capabilities and financial strength.
|
Deliver on bancassurance, sustainably grow agency, embed quality and optimize distribution mix
•Build sustainable scale through a diversified mix of high performing, quality-focused channels that enhance Client impact by offering holistic sales advice delivered through our expanding range of life, wealth and health solutions.
•Continue to effectively collaborate with existing bancassurance partners to unlock the potential of recent deals, and capture scale by embedding our insurance products into Clients’ bank journeys, integrating digital tools, and engaging with partners.
•Scale agency and become the partner of choice for advisors to develop active and sustainable agency talent.
|
Strengthen brand and differentiated Client value propositions to build and deepen quality Client, advisor, and employee relationships
•Deliver digital excellence that provides simple, relevant and reliable propositions and experiences for our Clients and partners.
•Build a distinctive, trusted brand through investing further in high visibility advertising that increases awareness and further builds consideration of Sun Life across Asia.
•Provide quality advice and offer relevant financial solutions to enable Clients to plan and protect themselves from adverse financial events and invest for their future.
•Become a partner in our Clients' health journeys by offering a wider set of valued health solutions and deepen the level of engagement across the Client relationship.
•Embed ESG into our investment processes and introduce ESG investment opportunities for our Clients.
|
Transform Client and advisor experience, capture efficiencies, retain and gain Client and scale markets
•Digitize our business and leverage common tools and technology platforms across the region to make it easier for Clients and advisors to do business with us.
•Increase engagement of prospective and existing Clients by being more personal, proactive and predictive. Create personalized experiences to deepen our relationship and improve retention with Clients.
•Empower advisors, including bancassurance distribution, by building best-in-class digital and data capabilities that provide leads generation, enable more engaging experiences, create Client impact, and enhance prospect conversion, advisor productivity, and recruitment and training. Accelerate technology foundation modernization and position digital investments to deliver unit cost reductions and enhance advisor and Client experience.
•Deliver digital innovation for our business units that unlocks meaningful growth, efficiencies, scale and distinctiveness.
|
Outlook | ||
Our diversified business, with a multi-country presence and multi-channel distribution, positions us well to deepen Client relationships, capture opportunities as they arise, and protects against adverse economic cycles and regulatory changes in any one market. Despite short-term headwinds from market volatility, we expect that the region’s economic growth will continue, and rapid wealth creation, coupled with low insurance penetration rates, will result in sustained growth across all our markets over the medium-term. In addition, we expect to continue to reach more Clients by expanding and deepening our high-quality agency force, diverse network of bancassurance partners and broker partnerships. We are confident that our position among the global leaders in the HNW space will continue to generate value and positive outcomes for Clients.
Economic and geopolitical uncertainty, as well as intense competition, equity market downturn, rise in interest rates and inflation continue to pose challenges to our businesses. However, our steadfast dedication to our Purpose and our Clients, strengthening market positions, key strategic relationships, investments in digital and analytics, and our ability to leverage Sun Life's global expertise position us well for the future. As local governments continue to push responsibility down to their people in both the retirement and health spaces, we are well-equipped to offer current and prospective Clients a diverse range of products and solutions.
|
Business Type | Business Unit & Market |
Description | Market Position | ||||||||
Wealth & asset management |
ASEAN
Philippines(1)
|
• Asset management for individual and institutional Clients through agency, brokerage, bancassurance and digital partners. |
• #2 mutual fund operation in the country(2) |
||||||||
Hong Kong | • Mandatory Provident Fund (MPF) and pension administration to individuals and businesses through agency and brokerage distribution. | • 3rd largest provider based on AUM, 3rd based on net inflows(3) |
|||||||||
Joint Ventures
China(4)
|
• Institutional asset management, passive third-party asset management and debt financing business through direct distribution. |
• 12th largest mutual fund provider(5) |
|||||||||
India(6) |
• Asset management for both individual and institutional investors through independent financial advisors, banks, and direct distribution channels. |
• 6th largest mutual fund operation in the country(7) |
|||||||||
Individual - Protection |
ASEAN
Philippines
|
• Individual and group life and health insurance products to individuals and businesses through a multi-channel distribution network. | • #1 ranked insurance company based on total premium(8) |
||||||||
Indonesia | • Individual life and health insurance through agency, telco arrangements and banks, including a bancassurance partnership with CIMB Niaga, Indonesia's 2nd largest privately-owned bank |
• 11th ranked insurance company(9) |
|||||||||
Vietnam | • Individual insurance and pensions distributed through agency, corporate sales, and digital distribution channels and partnerships, including exclusive bancassurance agreements with TPBank(10) and ACB(10). |
• 5th in bancassurance sales, 5th ranked insurance company(11) |
|||||||||
Hong Kong | • Individual and group life and health insurance through agency, bancassurance agreement with Dah Sing(12) and brokerage distribution, including life insurance solutions for HNW Clients. |
• Top 10 in Agency for Life Insurance(13) |
|||||||||
Joint Ventures
China(4)
|
• Individual and group life and health insurance and savings products distributed through agency, brokerage, bancassurance and digital channels. | • 10th ranked life insurance company in China among multinationals(14) |
|||||||||
India(6) |
• Individual and group insurance, savings and retirement products through agency, brokerage and bancassurance channels. | • 7th largest life insurance company in India(15) |
|||||||||
Malaysia(16) |
• Individual and group insurance through banks and telco arrangements, including an exclusive bancassurance agreement with CIMB Bank, Malaysia's 2nd largest bank, and a growing agency force. |
• 1st in bancatakaful and 3rd in bancassurance sales, 7th overall(17) |
|||||||||
High-Net-Worth
International
|
• Individual life insurance solutions for HNW Clients residing outside the U.S. and Canada
• Manages a block of International wealth investment products closed to new sales.
|
• A leader in international HNW life insurance business | |||||||||
Singapore | • Individual life insurance solutions for HNW Clients in Asia. | • New entrant to the market in 2021 | |||||||||
Regional Office & other | Regional Office | • Asia's headquarters based in Hong Kong. |
($ millions) | 2023 | 2022(1) |
||||||
Wealth & asset management(2) |
55 | 71 | ||||||
Individual - Protection(2)(3) |
587 | 479 | ||||||
Regional Office expenses & other(2) |
(42) | (11) | ||||||
Underlying net income (loss)(2) |
600 | 539 | ||||||
Add: Market-related impacts(1) |
(153) | (332) | ||||||
ACMA | 39 | 1 | ||||||
Acquisition, integration and restructuring | (18) | (7) | ||||||
Intangible asset amortization | (8) | (8) | ||||||
Other |
51 | 17 | ||||||
Reported net income - Common shareholders(1) |
511 | 210 | ||||||
Underlying ROE (%)(2) |
11.0% | 11.1% | ||||||
Reported ROE (%)(2) |
9.4% | 4.3% | ||||||
Wealth sales & asset management gross flows(2) |
7,713 | 11,140 | ||||||
Individual - Protection sales(2) |
1,882 | 1,271 | ||||||
Group - Health & Protection sales(2)(3) |
76 | 73 | ||||||
New business CSM(2) |
681 | 322 |
Corporate Support operations consist of certain expenses, investment income, capital, and other items. Corporate operations pertain to core enterprise oversight activities such as Finance, Risk and Compliance as well as enterprise enablement capabilities such as Strategy, Marketing, Sustainability and Philanthropy. Corporate Support is included in the 'Corporate expenses and other' business type. |
($ millions) | 2023 | 2022(1) |
||||||
Individual - Protection(2)(3) |
29 | 87 | ||||||
Corporate expenses & other(2) |
(406) | (256) | ||||||
Underlying net income (loss)(2) |
(377) | (169) | ||||||
Add: Market-related impacts(1) |
33 | 38 | ||||||
ACMA | 3 | 6 | ||||||
Acquisition, integration and restructuring | 21 | (170) | ||||||
Other | — | 35 | ||||||
Reported net income (loss) - Common shareholders(1) |
(320) | (260) |
I. Investments |
December 31, 2023 | December 31, 2022 | |||||||||||||
($ millions) | Carrying value | % of Total carrying value | Carrying value | % of Total carrying value | ||||||||||
Cash, cash equivalents and short-term securities | 13,173 | 8% | 11,219 | 7% | ||||||||||
Debt securities | 75,493 | 43% | 75,902 | 45% | ||||||||||
Equity securities | 7,138 | 4% | 7,148 | 4% | ||||||||||
Mortgages and loans | 54,600 | 31% | 51,253 | 30% | ||||||||||
Derivative assets | 2,183 | 1% | 2,095 | 1% | ||||||||||
Other invested assets |
12,018 | 7% | 11,070 | 7% | ||||||||||
Investment properties | 9,723 | 6% | 10,102 | 6% | ||||||||||
Total invested assets | 174,328 | 100% | 168,789 | 100% |
December 31, 2023 | December 31, 2022 | |||||||||||||
($ millions) | Total | % of Total | Total | % of Total | ||||||||||
Debt securities issued or guaranteed by: | ||||||||||||||
Canadian federal government | 6,010 | 8 | % | 5,611 | 8 | % | ||||||||
Canadian provincial and municipal government | 14,251 | 20 | % | 13,665 | 18 | % | ||||||||
U.S. government and agency | 1,370 | 2 | % | 1,537 | 2 | % | ||||||||
Other foreign government | 3,802 | 5 | % | 4,624 | 6 | % | ||||||||
Total government issued or guaranteed debt securities | 25,433 | 35 | % | 25,437 | 34 | % | ||||||||
Corporate debt securities by industry sector:(1) |
||||||||||||||
Financials | 11,060 | 16 | % | 11,355 | 15 | % | ||||||||
Utilities | 7,059 | 9 | % | 6,676 | 9 | % | ||||||||
Industrials | 5,489 | 7 | % | 5,575 | 7 | % | ||||||||
Energy | 3,272 | 4 | % | 3,342 | 4 | % | ||||||||
Communication services | 3,149 | 4 | % | 3,329 | 4 | % | ||||||||
Real estate |
2,525 | 3 | % | 2,506 | 3 | % | ||||||||
Health care | 2,038 | 3 | % | 2,034 | 3 | % | ||||||||
Consumer staples | 1,805 | 2 | % | 1,978 | 3 | % | ||||||||
Consumer discretionary | 1,726 | 2 | % | 1,836 | 2 | % | ||||||||
Information technology | 904 | 1 | % | 1,384 | 2 | % | ||||||||
Materials | 1,102 | 1 | % | 1,295 | 2 | % | ||||||||
Total corporate debt securities | 40,129 | 52 | % | 41,310 | 54 | % | ||||||||
Asset-backed securities | 9,931 | 13 | % | 9,155 | 12 | % | ||||||||
Total debt securities | 75,493 | 100 | % | 75,902 | 100 | % |
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ millions) | FVTPL debt securities |
FVOCI debt securities | Total | % of Total | FVTPL debt securities |
FVOCI debt securities | Total | % of Total | ||||||||||||||||||
Debt securities by geography: | ||||||||||||||||||||||||||
Canada | 30,180 | 4,339 | 34,519 | 46% | 26,613 | 6,064 | 32,677 | 43% | ||||||||||||||||||
United States | 20,111 | 6,266 | 26,377 | 35% | 20,274 | 6,196 | 26,470 | 35% | ||||||||||||||||||
Europe | 3,892 | 1,470 | 5,362 | 7% | 5,814 | 1,789 | 7,603 | 10% | ||||||||||||||||||
Asia | 5,440 | 900 | 6,340 | 8% | 4,549 | 964 | 5,513 | 7% | ||||||||||||||||||
Other | 1,557 | 1,338 | 2,895 | 4% | 2,107 | 1,532 | 3,639 | 5% | ||||||||||||||||||
Total debt securities | 61,180 | 14,313 | 75,493 | 100% | 59,357 | 16,545 | 75,902 | 100% |
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ millions) | FVTPL debt securities |
FVOCI debt securities | Total | % of Total | FVTPL debt securities |
FVOCI debt securities | Total | % of Total | ||||||||||||||||||
Debt securities by credit rating: | ||||||||||||||||||||||||||
AAA | 10,654 | 4,572 | 15,226 | 20 | % | 9,440 | 5,822 | 15,262 | 20 | % | ||||||||||||||||
AA | 9,632 | 1,453 | 11,085 | 15 | % | 9,267 | 2,043 | 11,310 | 15 | % | ||||||||||||||||
A | 23,523 | 4,653 | 28,176 | 37 | % | 23,050 | 4,646 | 27,696 | 37 | % | ||||||||||||||||
BBB | 16,872 | 3,210 | 20,082 | 27 | % | 17,007 | 3,661 | 20,668 | 27 | % | ||||||||||||||||
BB and lower | 499 | 425 | 924 | 1 | % | 593 | 373 | 966 | 1 | % | ||||||||||||||||
Total debt securities | 61,180 | 14,313 | 75,493 | 100 | % | 59,357 | 16,545 | 75,902 | 100 | % |
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ millions) | FVTPL equities | FVOCI equities |
Total |
% of Total | FVTPL equities | FVOCI equities |
Total |
% of Total | ||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||
Canada | 3,081 | — | 3,081 | 43 | % | 3,038 | — | 3,038 | 42 | % | ||||||||||||||||
United States | 2,185 | 68 | 2,253 | 32 | % | 1,924 | — | 1,924 | 27 | % | ||||||||||||||||
Europe | 153 | — | 153 | 2 | % | 365 | — | 365 | 5 | % | ||||||||||||||||
Asia | 1,645 | — | 1,645 | 23 | % | 1,788 | — | 1,788 | 25 | % | ||||||||||||||||
Other | 6 | — | 6 | — | % | 33 | — | 33 | 1 | % | ||||||||||||||||
Total equity securities | 7,070 | 68 | 7,138 | 100 | % | 7,148 | — | 7,148 | 100 | % |
December 31, 2023 | December 31, 2022 | |||||||||||||||||||
($ millions) | Mortgages | Loans | Total | Mortgages | Loans | Total | ||||||||||||||
Canada | 9,377 | 12,924 | 22,301 | 9,363 | 12,433 | 21,796 | ||||||||||||||
United States | 4,609 | 17,086 | 21,695 | 5,029 | 15,468 | 20,497 | ||||||||||||||
Europe | 159 | 7,420 | 7,579 | 29 | 6,479 | 6,508 | ||||||||||||||
Asia | — | 550 | 550 | — | 494 | 494 | ||||||||||||||
Other | — | 2,475 | 2,475 | — | 1,958 | 1,958 | ||||||||||||||
Total mortgages and loans | 14,145 | 40,455 | 54,600 | 14,421 | 36,832 | 51,253 | ||||||||||||||
% of Total invested assets | 8% | 23% | 31% | 8% | 22% | 30% |
December 31, 2023 | December 31, 2022 | |||||||||||||||||||
($ millions) | Insured | Uninsured | Total | Insured | Uninsured | Total | ||||||||||||||
Mortgages: | ||||||||||||||||||||
Retail | — | 2,558 | 2,558 | — | 2,819 | 2,819 | ||||||||||||||
Office | — | 2,754 | 2,754 | — | 3,014 | 3,014 | ||||||||||||||
Multi-family residential | 3,583 | 1,256 | 4,839 | 3,592 | 1,422 | 5,014 | ||||||||||||||
Industrial | — | 2,954 | 2,954 | — | 2,665 | 2,665 | ||||||||||||||
Other | 440 | 600 | 1,040 | 443 | 466 | 909 | ||||||||||||||
Total mortgages | 4,023 | 10,122 | 14,145 | 4,035 | 10,386 | 14,421 | ||||||||||||||
% of Total mortgages | 28% | 72% | 100% | 28% | 72% | 100% |
($ millions) | December 31, 2023 | As % of Total Mortgages |
December 31, 2022 | As % of Total Mortgages |
||||||||||
Mortgages by credit rating: | ||||||||||||||
Insured | 4,023 | 28 | % | 4,035 | 28 | % | ||||||||
AAA | 7 | — | % | — | — | % | ||||||||
AA | 1,990 | 14 | % | 1,665 | 12 | % | ||||||||
A | 5,158 | 37 | % | 5,483 | 37 | % | ||||||||
BBB | 2,425 | 17 | % | 2,686 | 19 | % | ||||||||
BB and lower | 530 | 4 | % | 538 | 4 | % | ||||||||
Impaired | 12 | — | % | 14 | — | % | ||||||||
Total mortgages | 14,145 | 100 | % | 14,421 | 100 | % |
($ millions) | December 31, 2023 | As % of Total Loans | December 31, 2022 | As % of Total Loans | ||||||||||
Loans by credit rating: | ||||||||||||||
AAA | 180 | — | % | 285 | 1 | % | ||||||||
AA | 5,815 | 14 | % | 5,101 | 14 | % | ||||||||
A | 16,507 | 42 | % | 15,257 | 41 | % | ||||||||
BBB | 15,896 | 39 | % | 14,284 | 39 | % | ||||||||
BB and lower | 1,950 | 5 | % | 1,872 | 5 | % | ||||||||
Impaired | 107 | — | % | 33 | — | % | ||||||||
Total loans | 40,455 | 100 | % | 36,832 | 100 | % |
($ millions) | December 31, 2023 | As % of Total Loans | December 31, 2022 | As % of Total Loans | ||||||||||
Loans by Sector(1): |
||||||||||||||
Corporate issued loans | 33,189 | 83 | % | 29,849 | 81 | % | ||||||||
Canadian provincial & municipal government | 4,179 | 10 | % | 3,941 | 11 | % | ||||||||
U.S. government & agency | 2,173 | 5 | % | 2,099 | 6 | % | ||||||||
Other foreign government | 855 | 2 | % | 880 | 2 | % | ||||||||
Canadian federal government |
59 | — | % | 63 | — | % | ||||||||
Total loans | 40,455 | 100 | % | 36,832 | 100 | % |
($ millions) | December 31, 2023 | December 31, 2022 | ||||||
Net fair value asset (liability) | 872 | (256) | ||||||
Total notional amount | 70,421 | 69,768 | ||||||
Credit equivalent amount(1) |
1,594 | 1,173 | ||||||
Risk-weighted credit equivalent amount(1) |
34 | 26 |
December 31, 2023 | December 31, 2022 | |||||||||||||
($ millions) | Credit equivalent amount ("CEA")(1) |
Risk
weighted CEA(1)
|
Credit equivalent amount ("CEA")(1) |
Risk
weighted CEA(1)
|
||||||||||
Foreign exchange contracts | 1,488 | 32 | 1,049 | 24 | ||||||||||
Interest rate contracts | 58 | 1 | 73 | 1 | ||||||||||
Equity and other contracts | 48 | 1 | 51 | 1 | ||||||||||
Total | 1,594 | 34 | 1,173 | 26 |
December 31, 2023 | December 31, 2022 | |||||||||||||
($ millions) | Notional amount | Fair value | Notional amount | Fair value | ||||||||||
Single name credit default swap contracts | ||||||||||||||
AA | — | — | 20 | — | ||||||||||
A | 491 | 5 | 587 | 4 | ||||||||||
BBB | 540 | 15 | 706 | 5 | ||||||||||
BB | — | — | 47 | 7 | ||||||||||
Total single name credit default swap contracts | 1,031 | 20 | 1,360 | 16 | ||||||||||
Credit default swap index contracts | — | — | — | — | ||||||||||
Total credit default swap contracts sold | 1,031 | 20 | 1,360 | 16 |
December 31, 2023 | |||||||||||||||||||||||
($ millions) | Office | Industrial | Retail | Multi-family residential |
Other | Total | % of Total by Geography | ||||||||||||||||
Canada | 1,558 | 3,318 | 921 | 1,468 | 668 | 7,933 | 82% | ||||||||||||||||
United States | 476 | 1,046 | 232 | 34 | 2 | 1,790 | 18% | ||||||||||||||||
Total | 2,034 | 4,364 | 1,153 | 1,502 | 670 | 9,723 | 100% | ||||||||||||||||
% of Total by Type | 21% | 45% | 12% | 15% | 7% | 100% | |||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
($ millions) | Office | Industrial | Retail | Multi-family residential |
Other | Total | % of Total by Geography | ||||||||||||||||
Canada | 1,747 | 3,434 | 926 | 1,322 | 612 | 8,041 | 79% | ||||||||||||||||
United States | 647 | 1,105 | 263 | — | 1 | 2,016 | 20% | ||||||||||||||||
Europe | 12 | 16 | 17 | — | — | 45 | 1% | ||||||||||||||||
Total | 2,406 | 4,555 | 1,206 | 1,322 | 613 | 10,102 | 100% | ||||||||||||||||
% of Total by Type | 24% | 45% | 12% | 13% | 6% | 100% |
J. Capital and Liquidity Management |
IFRS 17 and IFRS 9 | IFRS 4 and IAS 39(1) |
||||||||||
($ millions) | 2023 |
As at
January 1, 2023(2)
|
2022 | ||||||||
Subordinated debt | 6,178 | 6,676 | 6,676 | ||||||||
Innovative capital instruments(3) |
200 | 200 | 200 | ||||||||
Equity | |||||||||||
Preferred shares and other equity instruments | 2,239 | 2,239 | 2,239 | ||||||||
Common shareholders' equity(4) |
21,343 | 20,290 | 25,211 | ||||||||
Equity in the participating account | 457 | 268 | 1,837 | ||||||||
Non-controlling interests' equity | 161 | 90 | 90 | ||||||||
Total equity | 24,200 | 22,887 | 29,377 | ||||||||
Contractual Service Margin | 11,786 | 10,865 | |||||||||
Total capital(1) |
42,364 | 40,628 | 36,253 | ||||||||
Financial leverage ratio(1)(5)(6) |
21.5 | % | 23.7 | % | 25.1 | % |
Description | Interest Rate | Earliest Par Call Date/Redemption Date(1) |
Maturity | Principal/ Face Amount ($ millions) |
||||||||||
Subordinated Debt Issued by Sun Life Assurance | ||||||||||||||
6.30% Debentures, Series 2 | 6.30% | n/a | 2028 | 150 | ||||||||||
Subordinated Debt Issued by SLF Inc. | ||||||||||||||
Series 2007-1 | 5.40% | May 29, 2037 | 2042 | 400 | ||||||||||
Series 2019-1 | 2.38% | August 13, 2024 | 2029 | 750 | ||||||||||
Series 2020-1 | 2.58% | May 10, 2027 | 2032 | 1,000 | ||||||||||
Series 2020-2 | 2.06% | October 1, 2030 | 2035 | 750 | ||||||||||
Series 2021-1 | 2.46% | November 18, 2026 | 2031 | 500 | ||||||||||
Series 2021-2 | 2.80% | November 21, 2028 | 2033 | 1,000 | ||||||||||
Series 2021-3 | 3.15% | November 18, 2031 | 2036 | 500 | ||||||||||
Series 2022-1 | 4.78% | August 10, 2029 | 2034 |
650 | ||||||||||
Series 2023-1 | 5.50% | July 4, 2030 | 2035 |
500 | ||||||||||
Trust Units Issued by Sun Life Capital Trust | ||||||||||||||
SLEECS - Series B | 7.093% | June 30, 2032 | Perpetual | 200 | ||||||||||
Class A Preferred Shares and Other Equity Instruments Issued by SLF Inc. | ||||||||||||||
Series 3 | 4.45% | Any time | Perpetual | 250 | ||||||||||
Series 4 | 4.45% | Any time | Perpetual | 300 | ||||||||||
Series 5 | 4.50% | Any time | Perpetual | 250 | ||||||||||
Series 8R(2) |
1.825% | June 30, 2025 | Perpetual | 155 | ||||||||||
Series 9QR(3) |
Floating | June 30, 2025(5) |
Perpetual | 125 | ||||||||||
Series 10R(2) |
2.967% | September 30, 2026 | Perpetual | 171 | ||||||||||
Series 11QR(4) |
Floating | September 30, 2026(5) |
Perpetual | 29 | ||||||||||
Series 2021-1 - LRCN(6) |
3.60% | June 30, 2026 | 2081 | 1,000 |
Number of Common Shares Outstanding | ||||||||
(in millions) | 2023 | 2022 | ||||||
Balance, beginning of year | 586.4 | 586.0 | ||||||
Stock options exercised | 1.0 | 0.4 | ||||||
Common shares repurchased and cancelled | (2.8) | — | ||||||
Balance, end of year | 584.6 | 586.4 | ||||||
Number of Stock Options Outstanding | ||||||||
(in millions) | 2023 | 2022 | ||||||
Balance, beginning of year | 3.6 | 3.0 | ||||||
Options issued | 0.8 | 0.7 | ||||||
Options exercised, forfeited or expired | (1.0) | (0.1) | ||||||
Balance, end of year | 3.4 | 3.6 |
IFRS 17 and IFRS 9 | |||||
($ millions) | 2023 | ||||
Capital resources | |||||
Adjusted retained earnings and contributed surplus (including contractual service margin)(1) |
24,076 | ||||
Adjusted accumulated other comprehensive income | 771 | ||||
Common and preferred shares | 10,566 | ||||
Innovative capital instruments and subordinated debt | 6,348 | ||||
Less: | |||||
Goodwill | 4,620 | ||||
Non-life investments and other | 10,668 | ||||
Available capital | 26,473 | ||||
Surplus allowance and eligible deposits | 6,165 | ||||
Total Capital resources | 32,638 | ||||
Capital requirements | |||||
Credit, market and insurance risks | 24,068 | ||||
Less: Diversification and other credits | 4,984 | ||||
Segregated fund guarantee risk | 719 | ||||
Operational risk | 2,139 | ||||
Base solvency buffer | 21,942 | ||||
LICAT ratio | 149 | % |
Amount per share | 2023 | 2022 | 2021 | ||||||||
Common shares | 3.00 | 2.76 | 2.31 | ||||||||
Class A preferred shares | |||||||||||
Series 1(1) |
— | — | 0.890625 | ||||||||
Series 2(1) |
— | — | 0.900000 | ||||||||
Series 3 | 1.112500 | 1.112500 | 1.112500 | ||||||||
Series 4 | 1.112500 | 1.112500 | 1.112500 | ||||||||
Series 5 | 1.125000 | 1.125000 | 1.125000 | ||||||||
Series 8R(2)(3) |
0.456250 | 0.456250 | 0.456250 | ||||||||
Series 9QR(4) |
1.504240 | 0.701122 | 0.382421 | ||||||||
Series 10R(2)(5) |
0.741750 | 0.741750 | 0.718313 | ||||||||
Series 11QR(6) |
1.694240 | 0.891122 | 0.572421 | ||||||||
Series 12R(1) |
— | — | 0.951500 |
($ millions) | 2023 | 2022 | ||||||
Net cash and cash equivalents, beginning of period | 9,372 | 7,693 | ||||||
Cash flows provided by (used in): | ||||||||
Operating activities | 5,612 | 4,311 | ||||||
Investing activities | (559) | (2,863) | ||||||
Financing activities | (3,086) | (71) | ||||||
Changes due to fluctuations in exchange rates | (169) | 302 | ||||||
Increase (decrease) in cash and cash equivalents | 1,798 | 1,679 | ||||||
Net cash and cash equivalents, end of period | 11,170 | 9,372 | ||||||
Short-term securities, end of period | 2,003 | 1,841 | ||||||
Net cash, cash equivalents and short-term securities, end of period | 13,173 | 11,213 |
($ millions) | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||
Credit Facility | Amount | Utilized | Expiry | Amount | Utilized | Expiry | ||||||||||||||||||||||||||
Committed | US | $ | 400 | US | $ | 11 | 2025 | US | $ | 400 | US | $ | 11 | 2025 | ||||||||||||||||||
Committed | US | $ | 1,710 | US | $ | 1,384 | 2024 | US | $ | 1,950 | US | $ | 1,358 | 2024 | ||||||||||||||||||
Committed | $ | 500 | $ | 500 | 2025 | $ | 500 | $ | 500 | 2025 | ||||||||||||||||||||||
Uncommitted | US | $ | 100 | US | $ | — | n/a | US | $ | 100 | US | $ | — | n/a | ||||||||||||||||||
Uncommitted | $ | 229 | $ | 95 | n/a | $ | 227 | $ | 89 | n/a | ||||||||||||||||||||||
Uncommitted | US | $ | 25 | US | $ | 3 | n/a | US | $ | 25 | US | $ | 5 | n/a |
K. Risk Management |
The text and tables in the following section of this MD&A include our disclosure on credit, market and liquidity risks in accordance with IFRS 7 Financial Instruments - Disclosures ("IFRS 7") and IFRS 17 Insurance Contracts, as well as a discussion on how we measure risk and our objectives, policies and methodologies for managing these risks. Disclosures in accordance with IFRS 7 and IFRS 17 are identified by a vertical line in the left margin of the page. The identified text and tables represent an integral part of our audited Annual Consolidated Financial Statements for the year ended December 31, 2023. The fact that certain text and tables are identified with a vertical line does not imply that these disclosures are of any greater importance than any other text or tables, and the Risk Management disclosure should be read in its entirely. |
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The disclosures in the Risk Management section of this document should be considered carefully together with other information in this MD&A and in the 2023 AIF, our Consolidated Financial Statements and other reports and materials that we file with securities regulators. |
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In this section, segregated funds include segregated fund guarantees, variable annuities and investment products, and includes Run-off reinsurance in U.S. In-force Management. |
Interest Rate and Spread Risk
Interest rate and spread risk includes the potential for financial loss arising from changes in the value of insurance and investment contract liabilities and financial assets due to changes or volatility in interest rates or spreads. In practice, when asset cash flows and the policy obligations they support are not matched, this may result in the need to either sell assets to meet policy payments and expenses or reinvest excess asset cash flows in unfavourable interest rate or credit spread environments. This risk is managed in our asset-liability management program. Details of the asset-liability management program are discussed under the heading "Market Risk Management Governance and Control" in section K - Risk Management in this document.
Our primary exposure to interest rate and spread risk arises from insurance and investment contracts that contain guarantees in the form of minimum crediting rates, maximum premium rates, settlement options, guaranteed annuitization options and minimum benefits. If investment returns fall below guaranteed levels, we may be required to increase liabilities or capital in respect of these contracts. The guarantees attached to these products may be applicable to both past premiums collected and future premiums not yet received. Segregated fund contracts provide benefit guarantees that are linked to underlying fund performance and may be triggered upon death, maturity, withdrawal or annuitization. Exposure to guarantees is managed within our risk appetite limits through our asset-liability management program, which may include the use of hedging strategies utilizing interest rate derivatives such as interest rate floors, swaps, futures and swaptions. The impact of these guarantees on net income, contractual service margin, and capital are included in the disclosed market risk sensitivities.
Significant changes or volatility in interest rates or spreads could have a negative impact on sales of certain insurance and annuity products, and adversely impact the expected pattern of redemptions (surrenders) on existing policies. Increases in interest rates or widening credit spreads may increase the risk that policyholders will surrender their contracts, potentially forcing us to liquidate assets at a loss. While we have established hedging programs in place and our insurance and annuity products often contain surrender mitigation features, these may not be sufficient to fully offset the adverse impact of changes in interest rates or spreads. Declines in interest rates or narrowing spreads can result in compression of the net spread between interest earned on investments and interest credited to policyholders. Declines in interest rates or narrowing spreads can also result in increased asset calls, mortgage prepayments, and net reinvestment of positive cash flows at lower yields, and therefore adversely impact our profitability and financial position. Negative interest rates may additionally result in losses on our cash and short-term deposits and low or negative returns on our fixed income assets impacting our profitability.
|
We also have direct exposure to interest rates and spreads from investments supporting other general account liabilities, surplus and employee benefit plans. Higher interest rates or wider spreads will reduce the value of our existing assets. Conversely, lower interest rates or a narrowing of spreads will result in reduced investment income on new fixed income asset purchases. These exposures fall within our risk-taking philosophy and appetite and are therefore generally not hedged. |
Foreign Currency Risk
Foreign currency risk is the result of mismatches in the currency of our assets and liabilities (inclusive of capital), and cash flows. This risk may arise from a variety of sources such as foreign currency transactions and services, foreign currency hedging, investments denominated in foreign currencies, investments in foreign subsidiaries and net income from foreign operations. Changes or volatility in foreign exchange rates, including a change to currencies that are fixed in value to another currency, could adversely affect our net income, contractual service margin and capital.
As an international provider of financial services, we operate in a number of countries, with revenues and expenses denominated in several local currencies. In each country in which we operate, we generally maintain the currency profile of assets to match the currency of liabilities and required capital. This approach provides an operational hedge against disruptions in local operations caused by currency fluctuations. Foreign currency derivative contracts such as currency swaps and forwards are used as a risk management tool to manage the currency exposure in accordance with our Asset Liability Management Policy. As at December 31, 2023 and December 31, 2022, the Company did not have a material foreign currency risk exposure.
Changes in exchange rates can affect our net income and surplus when financial results in functional currencies are translated into Canadian dollars. Net income earned outside of Canada is generally not currency hedged and a weakening in the local currency of our foreign operations relative to the Canadian dollar can have a negative impact on our net income reported in Canadian currency. A strengthening in the local currency of our foreign operations relative to the Canadian dollar would have the opposite effect. Regulatory capital ratios could also be impacted by changes in exchange rates.
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Market Risk Sensitivities |
|||||
We use a variety of methods and measures to manage and quantify our market risk exposures. These include duration and key rate duration management, convexity measures, cash flow gap analysis, scenario testing, and sensitivity testing of earnings and regulatory capital ratios.
The measurement of liabilities and assets are affected by the level of equity market performance, interest rates, credit and swap spreads and other market risk variables. The following sections set out the estimated immediate impact on, or sensitivity of, our net income(1), contractual service margin, OCI and SLF Inc.'s LICAT ratio to certain instantaneous changes in market variables as at December 31, 2023 and December 31, 2022(2).
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(1)Net income in section K - Risk Management in this document refers to common shareholders' net income. |
The estimated sensitivities in the tables below reflect the impact of market movements on insurance contracts and investment contracts, assets backing insurance contracts, assets backing investment contracts, assets backing the surplus segment, and seed investments in our asset management subsidiaries.
Net income sensitivities to equity and real estate market movements are driven primarily by changes in the value of investments backing general account liabilities and surplus. Net income sensitivities to interest rates and spreads are driven by the net impact on liabilities and the assets backing them. Lower interest rates or a narrowing of spreads will result in increased liabilities for insurance contracts, offset by increased values of the assets backing general account liabilities. Higher interest rates or a widening of spreads will result in decreased liabilities for insurance contracts, offset by decreased values of the assets backing general account liabilities. Further detail on the impact of changes or volatility in market prices on assets and liabilities is provided under the headings "Equity Risk", "Interest Rate and Spread Risk", and "Real Estate Risk" above.
OCI sensitivities are impacted by changes in the market value of assets classified as FVOCI. The market value of FVOCI fixed income assets, which are held primarily in our surplus and investment contract segments, increases with lower interest rates or a narrowing of spreads, and decreases with higher interest rates or a widening of spreads.
As these market risk sensitivities reflect an instantaneous impact on net income, CSM, OCI and SLF Inc.'s LICAT ratio, they do not include impacts over time such as the effect on fee income in our asset management businesses.
Refer to Additional Cautionary Language and Key Assumptions Related to Sensitivities in this section for important additional information regarding these estimates.
|
($ millions, unless otherwise noted) |
As at December 31, 2023 |
||||||||||||||||||||||||||||
Change in Equity Markets(2)(3)(4) |
25% decrease | 10% decrease | 10% increase | 25% increase | |||||||||||||||||||||||||
Potential impact on net income
(after-tax)
|
(400) | (175) | 175 | 425 | |||||||||||||||||||||||||
Potential impact on CSM (pre-tax) | (625) | (250) | 250 | 600 | |||||||||||||||||||||||||
Potential impact on LICAT ratio(5) |
3.0% point decrease | 1.0% point decrease | 1.0% point increase | 2.5% point increase | |||||||||||||||||||||||||
($ millions, unless otherwise noted) | As at December 31, 2022(1) |
||||||||||||||||||||||||||||
Change in Equity Markets(2)(3)(4) |
25% decrease | 10% decrease | 10% increase | 25% increase | |||||||||||||||||||||||||
Potential impact on net income
(after-tax)
|
(300) | (125) | 125 | 325 | |||||||||||||||||||||||||
Potential impact on CSM (pre-tax) | (650) | (250) | 250 | 625 | |||||||||||||||||||||||||
Potential impact on LICAT ratio(5) |
3.5% point decrease | 1.0% point decrease | 0.5% point increase | 2.0% point increase | |||||||||||||||||||||||||
(1)Effective January 1, 2023, we adopted IFRS 17 and IFRS 9, and certain financial assets were reclassified between measurement categories as permitted. December 31, 2022 amounts provided in the sensitivities in section K - Risk Management of this document have been adjusted to reflect these January 1, 2023 reclassifications. See Note 2 of the 2023 Annual Consolidated Financial Statements for further details on the reclassifications.
(2)Represents the respective change across all equity markets as at December 31, 2023 and December 31, 2022. Assumes that actual equity exposures consistently and precisely track the broader equity markets. Since in actual practice equity-related exposures differ from broad market indices (due to the impact of active management, basis risk, investments in private equity and other factors), realized sensitivities may differ significantly from those illustrated above. Sensitivities include the impact of re-balancing equity hedges for hedging programs at 2% intervals (for 10% changes in equity markets) and at 5% intervals (for 25% changes in equity markets).
(3)The market risk sensitivities include the estimated impact of our hedging programs in effect as at December 31, 2023 and December 31, 2022, and include new business added and product changes implemented prior to such dates.
(4)Net income, CSM and OCI sensitivities have been rounded in increments of $25 million. The sensitivities exclude the market impacts on the income from our joint ventures and associates, which we account for on an equity basis.
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(5)The LICAT sensitivities illustrate the impact on SLF Inc. as at December 31, 2023 and December 31, 2022. LICAT ratios are rounded in increments of 0.5%. |
($ millions, unless otherwise noted) | As at December 31, 2023 | As at December 31, 2022(1) |
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Change in Interest Rates(2)(3)(4) |
50 basis point decrease | 50 basis point increase | 50 basis point decrease | 50 basis point increase | |||||||||||||||||||||||||
Potential impact on net income (after-tax) | (25) | 50 | (100) | 75 | |||||||||||||||||||||||||
Potential impact on CSM (pre-tax) | 75 | (75) | 125 | (150) | |||||||||||||||||||||||||
Potential impact on OCI | 200 | (200) | 225 | (225) | |||||||||||||||||||||||||
Potential impact on LICAT ratio(5) |
1.5% point increase | 1.5% point decrease | 1.5% point increase | 2.5% point decrease | |||||||||||||||||||||||||
(1)Effective January 1, 2023, we adopted IFRS 17 and IFRS 9, and certain financial assets were reclassified between measurement categories as permitted. December 31, 2022 amounts provided in the sensitivities in section K - Risk Management of this document have been adjusted to reflect these January 1, 2023 reclassifications. See Note 2 of the 2023 Annual Consolidated Financial Statements for further details on the reclassifications.
(2)Interest rate sensitivities assume a parallel shift in assumed interest rates across the entire yield curve as at December 31, 2023 and December 31, 2022 with no change to the ultimate risk-free rate. Variations in realized yields based on factors such as different terms to maturity and geographies may result in realized sensitivities being significantly different from those illustrated above. Sensitivities include the impact of re-balancing interest rate hedges for hedging programs at 10 basis point intervals (for 50 basis point changes in interest rates).
(3)The market risk sensitivities include the estimated impact of our hedging programs in effect as at December 31, 2023 and December 31, 2022, and include new business added and product changes implemented prior to such dates.
(4)Net income, CSM and OCI sensitivities have been rounded in increments of $25 million. The sensitivities exclude the market impacts on the income from our joint ventures and associates, which we account for on an equity basis.
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(5)The LICAT sensitivities illustrate the impact on SLF Inc. as at December 31, 2023 and December 31, 2022. The sensitivities reflect the worst scenario as at December 31, 2023 and assume that a scenario switch does not occur in the quarter. LICAT ratios are rounded in increments of 0.5%. |
Credit Spread and Swap Sensitivities
Credit spread sensitivities reflect the impact of changes in credit spreads on our asset and liability values (including provincial government bonds, corporate bonds, and other fixed income assets). Swap spread sensitivities reflect the impact of changes in swap spreads on swap-based derivative positions and liability values.
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($ millions, unless otherwise noted) | As at December 31, 2023 |
As at December 31, 2022(1) |
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Change in Credit Spreads(2)(3) |
50 basis point decrease | 50 basis point increase | 50 basis point decrease | 50 basis point increase | |||||||||||||||||||||||||
Potential impact on net income (after-tax) | 50 | (50) | 50 | (50) | |||||||||||||||||||||||||
Potential impact on CSM (pre-tax) | 75 | (25) | 75 | (100) | |||||||||||||||||||||||||
Potential impact on OCI | 200 | (175) | 200 | (200) | |||||||||||||||||||||||||
Potential impact on LICAT ratio(4) |
1.0% point increase | 1.0% point decrease | 1.0% point increase | 2.0% point decrease | |||||||||||||||||||||||||
(1)Effective January 1, 2023, we adopted IFRS 17 and IFRS 9, and certain financial assets were reclassified between measurement categories as permitted. December 31, 2022 amounts provided in the sensitivities in section K - Risk Management of this document have been adjusted to reflect these January 1, 2023 reclassifications. See Note 2 of the 2023 Annual Consolidated Financial Statements for further details on the reclassifications.
(2)The credit spread sensitivities assume a parallel shift in the indicated spreads across the entire term structure with no change to the ultimate liquidity premium. The sensitivities reflect a floor of zero on credit spreads where the spreads are not currently negative. Variations in realized spread changes based on different terms to maturity, geographies, asset classes and derivative types, underlying interest rate movements, and ratings may result in realized sensitivities being significantly different from those provided above.
(3)Net income, CSM, and OCI sensitivities have been rounded in increments of $25 million.
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(4)The LICAT sensitivities illustrate the impact on SLF Inc. as at December 31, 2023 and December 31, 2022. The sensitivities reflect the worst scenario as of December 31, 2023 and assume that a scenario switch does not occur in the quarter. LICAT ratios are rounded in increments of 0.5%. |
($ millions, unless otherwise noted) | As at December 31, 2023 |
As at December 31, 2022(1) |
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Change in Swap Spreads(2)(3) |
20 basis point decrease | 20 basis point increase | 20 basis point decrease | 20 basis point increase | |||||||||||||||||||||||||
Potential impact on net income (after-tax) | (25) | 25 | (25) | 25 | |||||||||||||||||||||||||
(1)Effective January 1, 2023, we adopted IFRS 17 and IFRS 9, and certain financial assets were reclassified between measurement categories as permitted. December 31, 2022 amounts provided in the sensitivities in section K - Risk Management of this document have been adjusted to reflect these January 1, 2023 reclassifications. See Note 2 of the 2023 Annual Consolidated Financial Statements for further details on the reclassifications.
(2)The swap spread sensitivities assume a parallel shift in the indicated spreads across the entire term structure. Variations in realized spread changes based on different terms to maturity, geographies, asset classes and derivative types, underlying interest rate movements, and ratings may result in realized sensitivities being significantly different from those provided above.
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(3)Net income, CSM, and OCI sensitivities have been rounded in increments of $25 million. |
($ millions, unless otherwise noted) | As at December 31, 2023 | As at December 31, 2022(1) |
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Change in Real Estate Values (2) |
10% decrease | 10% increase | 10% decrease | 10% increase | ||||||||||
Potential impact on net income (after-tax) | (475) | 475 | (500) | 500 | ||||||||||
Potential impact on CSM (pre-tax) | (100) | 100 | (100) | 100 | ||||||||||
We have implemented asset-liability management and hedging programs involving regular monitoring and adjustment of market risk exposures using assets, derivative instruments and repurchase agreements to maintain market risk exposures within our risk appetite. The general availability and cost of these hedging instruments may be adversely impacted by a number of factors including changes in interest rates, increased volatility in capital markets, and changes in the general market and regulatory environment within which these hedging programs operate. In particular, regulations for derivatives could impose additional costs and could affect our hedging strategy. In addition, these programs may themselves expose us to other risks. |
Products/Application | Uses of Derivative | Derivatives Used | ||||||
General asset-liability management - interest rate risk exposure for most insurance and annuity products | To manage the sensitivity of the duration gap between assets and liabilities to interest rate changes | Interest rate swaps, swaptions, floors and bond futures | ||||||
Guarantees on insurance and annuity contracts - minimum interest rate guarantees, guaranteed surrender values and guaranteed annuitization options | To limit potential financial losses from significant reductions in asset earned rates relative to contract guarantees | Interest rate swaps, swaptions, floors and bond futures | ||||||
Segregated fund guarantees | To manage the exposure of product guarantees sensitive to movement in equity market and interest rate levels and currency fluctuations | Put options, call options, futures and swaps on equity indices, interest rate swaps, bond futures, and foreign exchange forwards | ||||||
Currency exposure in relation to asset-liability management | To reduce the sensitivity to currency fluctuations by matching the value and cash flows of specific assets denominated in one currency with the value and cash flows of the corresponding liabilities denominated in another currency | Currency swaps and forwards | ||||||
Credit exposure | To replicate credit exposures and enhance investment returns | Credit default swaps |
Additional Cautionary Language and Key Assumptions Related to Sensitivities |
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Our market risk sensitivities are measures of our estimated change in net income, OCI, CSM and LICAT ratio for changes in market risk variables described above, based on market risk variables and business in force as at the reporting date. These sensitivities are calculated independently for each risk factor, generally assuming that all other risk variables stay constant. The sensitivities do not take into account indirect effects such as potential impacts on goodwill impairment or valuation allowances on deferred tax assets. |
Actual results can differ materially from these estimates for a variety of reasons, including differences in the pattern or distribution of the market shocks, the interaction between these risk factors, model error, or changes in other assumptions such as business mix, effective tax rates, policyholder behaviour, currency exchange rates and other market variables relative to those underlying the calculation of these sensitivities. The extent to which actual results may differ from the indicative ranges will generally increase with larger movements in risk variables. Our sensitivities as at December 31, 2022(1) have been included for comparative purposes only. |
The sensitivities reflect the composition of our assets and liabilities as at December 31, 2023 and December 31, 2022(1), respectively. Changes in these positions due to new sales or maturities, asset purchases/sales, or other management actions could result in material changes to these reported sensitivities. In particular, these sensitivities reflect the expected impact of hedging activities based on the hedging programs in place as at the respective calculation dates. The actual impact of hedging activity can differ materially from that assumed in the estimated sensitivities due to ongoing hedge re-balancing activities, changes in the scale or scope of hedging activities, changes in the cost or general availability of hedging instruments, basis risk (i.e., the risk that hedges do not exactly replicate the underlying portfolio experience), model risk, and other operational risks in the ongoing management of the hedge programs or the potential failure of hedge counterparties to perform in accordance with expectations. |
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Our hedging programs may themselves expose us to other risks, including basis risk, volatility risk, and increased levels of derivative counterparty credit risk, liquidity risk, model risk and other operational risks. These factors may adversely impact the net effectiveness, costs, and financial viability of maintaining these hedging programs and therefore adversely impact our profitability and financial position. While our hedging programs are intended to mitigate these effects (e.g., hedge counterparty credit risk is managed by maintaining broad diversification, dealing primarily with highly-rated counterparties, and transacting through over-the-counter ("OTC") contracts cleared through central clearing houses, exchange-traded contracts or bilateral OTC contracts negotiated directly between counterparties that include credit support annexes), residual risk, potential reported earnings and capital volatility remain. |
The sensitivities are based on methods and assumptions in effect as at December 31, 2023 and December 31, 2022(1), as applicable. Changes in the regulatory environment, assumptions or methods used to measure assets and liabilities after those dates could result in material changes to the estimated sensitivities. Changes in market risk variables in excess of the changes illustrated may result in other than proportionate impacts. |
For the reasons outlined above, our sensitivities should only be viewed as indicative estimates of the underlying sensitivities of each factor under these specialized assumptions, and should not be viewed as predictors of our future income, OCI, CSM or capital. Given the nature of these calculations, we cannot provide assurance that actual impacts will be consistent with the estimates provided. |
We rate fixed income investments primarily through the use of internally developed scorecards which combine an estimated probability of default and loss given default to determine an expected loss and credit risk rating. This rating is expressed using a 22-point scale that is generally consistent with those used by external rating agencies, and is based on detailed examination of the borrower's, or issuer's, credit quality and the characteristics of the specific instrument. The probability of default assessment is based on borrower-level or issuer-level analysis, which encompasses an assessment of industry risk, business strategy, competitiveness, strength of management and other financial information. The loss given default assessment is based on instrument-level analysis, which considers the impact of guarantees, covenants, liquidity and other structural features. These scorecards provide input to stochastic value-at-risk models and are used to stress test the portfolio, which provide insight into the distribution and characteristics of credit risk within our portfolios. In accordance with our policies and under normal circumstances, our ratings cannot be higher than the highest rating provided by certain Nationally Recognized Statistical Rating Organizations ("NRSROs"). Certain assets, including those in our sovereign debt and asset-backed securities portfolios, are assigned a rating based on ratings provided by NRSROs using a priority sequence order of Standard & Poor's, Moody's, Fitch and DBRS Limited. |
The following tables present the undiscounted estimated future cash flows of insurance contract and reinsurance contract held assets and liabilities on our Consolidated Statements of Financial Position. These cash flows include estimates related to the timing and payment of death and disability claims, policy surrenders, policy maturities, annuity payments, minimum guarantees on segregated fund products, policyholder dividends, amounts on deposit, commissions and premium taxes offset by contractual future premiums and fees on in-force contracts. These estimated cash flows are based on the best estimated assumptions used in the determination of insurance contract and reinsurance contract held assets and liabilities. Due to the use of assumptions, actual cash flows will differ from these estimates. Amounts payable on demand, which includes amounts on deposit, dividends on deposit, outstanding claims and policyholder account values, are included in the 1 year or less time band. The amounts included in the table differ from the carrying value of the portfolio due to discounting, risk adjustments, and liability for remaining coverage for contracts using the premium allocation approach.
Amounts in this table include the liability for incurred claims for contracts measured using the PAA, but exclude the liability for remaining coverage for contracts measured using the PAA.
|
As at December 31, | 2023 | 2022 | ||||||||||||
Insurance contract liabilities: | ||||||||||||||
1 year or less(1) |
$ | 11,428 | $ | 11,980 | ||||||||||
1-2 years | 3,670 | 4,111 | ||||||||||||
2-3 years | 3,887 | 4,018 | ||||||||||||
3-4 years | 4,128 | 4,278 | ||||||||||||
4-5 years | 4,451 | 4,511 | ||||||||||||
Over 5 years | 556,052 | 469,366 | ||||||||||||
Total | $ | 583,616 | $ | 498,264 | ||||||||||
Insurance contract assets: | ||||||||||||||
1 year or less(1) |
$ (463) | $ (324) | ||||||||||||
1-2 years | (323) | (341) | ||||||||||||
2-3 years | (276) | (287) | ||||||||||||
3-4 years | (248) | (254) | ||||||||||||
4-5 years | (225) | (234) | ||||||||||||
Over 5 years | (3,305) | (3,753) | ||||||||||||
Total | $ (4,840) | $ (5,193) | ||||||||||||
Reinsurance contract held liabilities: | ||||||||||||||
1 year or less(1) |
$ 140 | $ 132 | ||||||||||||
1-2 years | 83 | 80 | ||||||||||||
2-3 years | 88 | 86 | ||||||||||||
3-4 years | 91 | 89 | ||||||||||||
4-5 years | 95 | 94 | ||||||||||||
Over 5 years | 5,036 | 5,085 | ||||||||||||
Total | $ 5,533 | $ 5,566 | ||||||||||||
Reinsurance contract held assets: | ||||||||||||||
1 year or less(1) |
$ (520) | $ (684) | ||||||||||||
1-2 years | (54) | (20) | ||||||||||||
2-3 years | (69) | (31) | ||||||||||||
3-4 years | (105) | (66) | ||||||||||||
4-5 years | (130) | (104) | ||||||||||||
Over 5 years | (11,330) | (12,102) | ||||||||||||
Total | $ (12,208) | $ (13,007) |
The following table summarizes the contractual maturities of our significant financial liabilities and contractual commitments other than insurance contracts as at December 31, 2023 and 2022: |
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Financial Liabilities and Contractual Obligations | |||||||||||||||||||||||||||||||||||
December 31, 2023
($ millions)
|
Within 1 year |
1 year to 3 years |
3 years to 5 years |
Over 5 years |
Total | ||||||||||||||||||||||||||||||
Investment contract liabilities(1) |
$ | 5,728 | $ | 2,518 | $ | 1,442 | $ | 1,727 | $ | 11,415 | |||||||||||||||||||||||||
Senior debentures and unsecured financing(2) |
2,347 | 28 | 28 | 533 | 2,936 | ||||||||||||||||||||||||||||||
Subordinated debt(2) |
204 | 410 | 554 | 7,192 | 8,360 | ||||||||||||||||||||||||||||||
Bond repurchase agreements | 2,705 | — | — | — | 2,705 | ||||||||||||||||||||||||||||||
Accounts payable and accrued expenses | 8,665 | — | — | — | 8,665 | ||||||||||||||||||||||||||||||
Lease liabilities(3) |
188 | 319 | 228 | 534 | 1,269 | ||||||||||||||||||||||||||||||
Secured borrowings from mortgage securitization | 306 | 885 | 560 | 535 | 2,286 | ||||||||||||||||||||||||||||||
Borrowed funds(2) |
86 | 103 | 14 | 162 | 365 | ||||||||||||||||||||||||||||||
Credit facilities(4) |
2,330 | — | — | — | 2,330 | ||||||||||||||||||||||||||||||
Total liabilities | $ | 22,559 | $ | 4,263 | $ | 2,826 | $ | 10,683 | $ | 40,331 | |||||||||||||||||||||||||
Contractual commitments:(5) |
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Contractual loans, equities and mortgages | $ | 39 | $ | 1,199 | $ | 915 | $ | 2,756 | $ | 4,909 | |||||||||||||||||||||||||
Total contractual commitments | $ | 39 | $ | 1,199 | $ | 915 | $ | 2,756 | $ | 4,909 | |||||||||||||||||||||||||
December 31, 2022
($ millions)
|
Within 1 year |
1 year to 3 years |
3 years to 5 years |
Over 5 years |
Total | ||||||||||||||||||||||||||||||
Investment contract liabilities(1) |
$ | 5,581 | $ | 2,037 | $ | 1,421 | $ | 1,609 | $ | 10,648 | |||||||||||||||||||||||||
Senior debentures and unsecured financing(2) |
2,353 | 28 | 28 | 548 | 2,957 | ||||||||||||||||||||||||||||||
Subordinated debt(2) |
208 | 416 | 416 | 7,856 | 8,896 | ||||||||||||||||||||||||||||||
Bond repurchase agreements | 2,725 | — | — | — | 2,725 | ||||||||||||||||||||||||||||||
Accounts payable and accrued expenses | 8,080 | — | — | — | 8,080 | ||||||||||||||||||||||||||||||
Lease liabilities(3) |
168 | 297 | 211 | 324 | 1,000 | ||||||||||||||||||||||||||||||
Secured borrowings from mortgage securitization | 87 | 767 | 757 | 762 | 2,373 | ||||||||||||||||||||||||||||||
Borrowed funds(2) |
210 | 26 | 38 | 170 | 444 | ||||||||||||||||||||||||||||||
Credit facilities(4) |
2,339 | — | — | — | 2,339 | ||||||||||||||||||||||||||||||
Total liabilities | $ | 21,751 | $ | 3,571 | $ | 2,871 | $ | 11,269 | $ | 39,462 | |||||||||||||||||||||||||
Contractual commitments:(5) |
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Contractual loans, equities and mortgages | $ | 1,134 | $ | 1,202 | $ | 375 | $ | 2,359 | $ | 5,070 | |||||||||||||||||||||||||
Total contractual commitments | $ | 1,134 | $ | 1,202 | $ | 375 | $ | 2,359 | $ | 5,070 | |||||||||||||||||||||||||
(1) These amounts represent the undiscounted estimated cash flows of investment contract liabilities on our Consolidated Statements of Financial Position. |
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(2) Payments due based on maturity dates and include expected interest payments. Actual redemption of certain securities may occur sooner as some include an option for the issuer to call the security at par at an earlier date. |
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(3) Lease liabilities are included on the Consolidated Statements of Financial Position due to the implementation of IFRS 16 Leases ("IFRS 16"). |
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(4) Reflects a change in presentation effective December 31, 2022. |
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(5) Contractual commitments and operating lease commitments are not reported on our Consolidated Statements of Financial Position. Additional information on these commitments is included in Note 22 of our 2023 Annual Consolidated Financial Statements. |
L. Additional Financial Disclosure |
IFRS 17 and IFRS 9 | IFRS 4 and IAS 39(1) |
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($ millions, after-tax, unless otherwise stated) | 2023 | 2022 | 2021 | ||||||||
Total revenue | 40,774 | 5,769 | 35,688 | ||||||||
Common shareholders' net income (loss) | 3,086 | 2,871 | 3,934 | ||||||||
Reported basic earnings per share ($) | 5.27 | 4.90 | 6.72 | ||||||||
Reported earnings per share (diluted) ($) | 5.26 | 4.89 | 6.69 | ||||||||
Total assets | 333,241 | 323,608 | 345,370 |
2023 | 2022 | ||||||||||||||||||||||
($ millions) | Canada | U.S. | Asset Management |
Asia | Corporate | Total | Total | ||||||||||||||||
Insurance revenue | 8,165 | 11,721 | — | 1,385 | 85 | 21,356 | 18,902 | ||||||||||||||||
Investment income (loss) | 7,514 | 1,321 | 187 | 2,347 | 217 | 11,586 | (20,580) | ||||||||||||||||
Fee income | 1,483 | 458 | 5,953 | 300 | (362) | 7,832 | 7,447 | ||||||||||||||||
Revenue | 17,162 | 13,500 | 6,140 | 4,032 | (60) | 40,774 | 5,769 | ||||||||||||||||
Insurance service expenses | 6,855 | 10,522 | — | 972 | 101 | 18,450 | 16,456 | ||||||||||||||||
Reinsurance contract held net (income) expense | 164 | (100) | — | 7 | (2) | 69 | 153 | ||||||||||||||||
Insurance finance (income) expenses from insurance contracts issued | 6,415 | 1,250 | — | 1,897 | 113 | 9,675 | (22,595) | ||||||||||||||||
Reinsurance finance (income) expenses | 2 | (57) | — | (4) | — | (59) | 440 | ||||||||||||||||
(Decrease) increase in investment contract liabilities | 326 | — | — | 5 | — | 331 | 152 | ||||||||||||||||
Other income | (102) | — | — | — | (67) | (169) | — | ||||||||||||||||
Interest expenses | 160 | 107 | 158 | 74 | 53 | 552 | 445 | ||||||||||||||||
Operating expenses and commissions | 1,751 | 1,031 | 4,480 | 489 | 244 | 7,995 | 7,092 | ||||||||||||||||
Total expenses | 15,571 | 12,753 | 4,638 | 3,440 | 442 | 36,844 | 2,143 | ||||||||||||||||
Income tax expense (benefit) | 275 | 148 | 309 | (10) | (261) | 461 | 546 | ||||||||||||||||
Dividends on preferred shares and distributions on other equity instruments | — | — | — | — | 79 | 79 | 70 | ||||||||||||||||
Non-controlling interests and participating policyholders' income in net income of subsidiaries | 64 | 23 | 126 | 91 | — | 304 | 139 | ||||||||||||||||
Reported net income (loss) - Common shareholders | 1,252 | 576 | 1,067 | 511 | (320) | 3,086 | 2,871 |
($ millions) | 2023 | 2022 | ||||||
Insurance revenue | ||||||||
Annuities | 2,258 | 2,244 | ||||||
Life insurance | 5,356 | 5,220 | ||||||
Health insurance | 13,742 | 11,438 | ||||||
Total insurance revenue | 21,356 | 18,902 | ||||||
Net Investment income (loss) | 11,586 | (20,580) | ||||||
Fee income | 7,832 | 7,447 | ||||||
Total revenue | 40,774 | 5,769 |
($ millions) | 2023 | 2022 | ||||||
Expenses | ||||||||
Insurance service expenses | 18,450 | 16,456 | ||||||
Reinsurance contract held net (income) expense |
69 | 153 | ||||||
Insurance finance (income) expenses from insurance contracts issued |
9,675 | (22,595) | ||||||
Reinsurance finance (income) expenses |
(59) | 440 | ||||||
(Decrease) increase in investment contract liabilities |
331 | 152 | ||||||
Other income |
(169) | — | ||||||
Interest expenses | 552 | 445 | ||||||
Operating expenses and commissions | 7,995 | 7,092 | ||||||
Total expenses | 36,844 | 2,143 |
($ millions) | 2023 | 2022 | ||||||
Income tax expense | 461 | 546 | ||||||
Indirect taxes | ||||||||
Premium taxes (net of premium taxes on ceded business)(1) |
532 | 453 | ||||||
Payroll taxes | 241 | 221 | ||||||
Property taxes | 136 | 130 | ||||||
Goods and services tax ("GST"), harmonized tax ("HST") and other sales taxes | 124 | 130 | ||||||
Business taxes and other | 54 | 50 | ||||||
Total indirect taxes | 1,087 | 984 | ||||||
Total taxes | 1,548 | 1,530 | ||||||
($ millions, after-tax) | Q4'23 |
Q4'22(1) |
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Underlying net income by business type(2): |
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Wealth & asset management | 439 | 412 | ||||||
Group - Health & Protection | 365 | 321 | ||||||
Individual - Protection | 284 | 231 | ||||||
Corporate expenses & other | (105) | (72) | ||||||
Underlying net income(2) |
983 | 892 | ||||||
Add: Market-related impacts(1) |
(193) | 224 | ||||||
Assumption changes and management actions |
(1) | 12 | ||||||
Other adjustments |
(40) | 37 | ||||||
Reported net income - Common shareholders | 749 | 1,165 | ||||||
Underlying ROE(2) |
18.4% | 17.7% | ||||||
Reported ROE(2) |
14.0% | 23.2% | ||||||
Notable items attributable to reported and underlying net income(2): |
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Mortality | (5) | (43) | ||||||
Morbidity | 91 | 110 | ||||||
Lapse and other policyholder behaviour |
(11) | (1) | ||||||
Expenses | (26) | (4) | ||||||
Credit(3) |
(18) | (11) | ||||||
Other(4) |
(2) | 17 |
Q4'23 |
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($ millions) | Asset Management |
Canada | U.S. | Asia | Corporate | Total | ||||||||||||||
Underlying net income (loss) | 331 | 350 | 253 | 143 | (94) | 983 | ||||||||||||||
Add: Market-related impacts (pre-tax) | (11) | (223) | (60) | (142) | — | (436) | ||||||||||||||
ACMA (pre-tax) | — | 72 | (65) | (1) | — | 6 | ||||||||||||||
Other adjustments (pre-tax) | (39) | (6) | (65) | (8) | — | (118) | ||||||||||||||
Tax expense (benefit) |
16 | 155 | 38 | 52 | 53 | 314 | ||||||||||||||
Reported net income (loss) - Common shareholders | 297 | 348 | 101 | 44 | (41) | 749 | ||||||||||||||
Q4'22(1) |
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Underlying net income (loss) | 324 | 265 | 230 | 135 | (62) | 892 | ||||||||||||||
Add: Market-related impacts (pre-tax)(1) |
(8) | 250 | 21 | (110) | 26 | 179 | ||||||||||||||
ACMA (pre-tax) | — | (185) | 71 | 71 | 17 | (26) | ||||||||||||||
Other adjustments (pre-tax) | 1 | (5) | (135) | 15 | (17) | (141) | ||||||||||||||
Tax expense (benefit) |
4 | 128 | 15 | (19) | 133 | 261 | ||||||||||||||
Reported net income (loss) - Common shareholders | 321 | 453 | 202 | 92 | 97 | 1,165 |
Quarterly results | ||||||||||||||||||||||||||||||||||||||
IFRS 17 and IFRS 9(1) |
IFRS 4 and IAS 39(1) |
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($ millions, unless otherwise noted) | Q4'23 |
Q3'23 |
Q2'23 |
Q1'23 |
Q4'22 |
Q3'22 |
Q2'22 |
Q1'22 |
Q4'22 | Q3'22 | Q2'22 | Q1'22 | ||||||||||||||||||||||||||
Total revenue | 18,684 | 2,439 | 7,668 | 11,983 | 8,494 | 4,901 | (2,967) | (4,659) | 12,301 | 8,630 | 2,011 | 380 | ||||||||||||||||||||||||||
Common shareholders' net income (loss) | ||||||||||||||||||||||||||||||||||||||
Underlying net income(2) |
983 | 930 | 920 | 895 | 892 | 949 | 808 | 720 | 990 | 949 | 892 | 843 | ||||||||||||||||||||||||||
Add: Market-related impacts |
(193) | 23 | (220) | (64) | 224 | (361) | 118 | (2) | (136) | (160) | (152) | 38 | ||||||||||||||||||||||||||
ACMA | (1) | 35 | 7 | (5) | 12 | (131) | (22) | (27) | 54 | 7 | — | 1 | ||||||||||||||||||||||||||
Other adjustments |
(40) | (117) | (47) | (20) | 37 | (346) | 26 | (26) | 43 | (330) | 45 | (24) | ||||||||||||||||||||||||||
Reported net income - Common shareholder |
749 | 871 | 660 | 806 | 1,165 | 111 | 930 | 665 | 951 | 466 | 785 | 858 | ||||||||||||||||||||||||||
Diluted EPS ($) | ||||||||||||||||||||||||||||||||||||||
Underlying(2) |
1.68 | 1.59 | 1.57 | 1.52 | 1.52 | 1.62 | 1.38 | 1.23 | 1.69 | 1.62 | 1.52 | 1.44 | ||||||||||||||||||||||||||
Reported |
1.28 | 1.48 | 1.12 | 1.37 | 1.98 | 0.19 | 1.58 | 1.13 | 1.62 | 0.80 | 1.34 | 1.46 | ||||||||||||||||||||||||||
Basic reported EPS ($) | ||||||||||||||||||||||||||||||||||||||
Reported | 1.28 | 1.49 | 1.12 | 1.37 | 1.99 | 0.19 | 1.59 | 1.13 | 1.62 | 0.80 | 1.34 | 1.46 | ||||||||||||||||||||||||||
Underlying net income (loss) by segment(2) | ||||||||||||||||||||||||||||||||||||||
Asset Management | 331 | 330 | 296 | 282 | 324 | 298 | 295 | 321 | 313 | 295 | 270 | 326 | ||||||||||||||||||||||||||
Canada | 350 | 338 | 372 | 316 | 265 | 293 | 299 | 206 | 324 | 300 | 344 | 298 | ||||||||||||||||||||||||||
U.S. | 253 | 185 | 215 | 237 | 230 | 227 | 134 | 107 | 240 | 216 | 154 | 118 | ||||||||||||||||||||||||||
Asia | 143 | 166 | 150 | 141 | 135 | 153 | 118 | 133 | 152 | 175 | 148 | 152 | ||||||||||||||||||||||||||
Corporate | (94) | (89) | (113) | (81) | (62) | (22) | (38) | (47) | (39) | (37) | (24) | (51) | ||||||||||||||||||||||||||
Total underlying net income (loss)(2) |
983 | 930 | 920 | 895 | 892 | 949 | 808 | 720 | 990 | 949 | 892 | 843 | ||||||||||||||||||||||||||
Add: Market-related impacts (pre-tax) |
(436) | 107 | (298) | (99) | 179 | (400) | 282 | 172 | (273) | (212) | (109) | 193 | ||||||||||||||||||||||||||
ACMA (pre-tax) | 6 | 41 | 11 | (5) | (26) | (153) | (30) | (30) | 67 | 15 | — | 1 | ||||||||||||||||||||||||||
Other adjustments (pre-tax) |
(118) | (156) | (89) | (10) | (141) | (385) | 29 | (29) | (88) | (362) | 57 | (26) | ||||||||||||||||||||||||||
Tax expense (benefit) on above items | 314 | (51) | 116 | 25 | 261 | 100 | (159) | (168) | 255 | 76 | (55) | (153) | ||||||||||||||||||||||||||
Reported net income (loss) by segment - Common shareholders | ||||||||||||||||||||||||||||||||||||||
Asset Management |
297 | 268 | 248 | 254 | 321 | 218 | 298 | 311 | 322 | 215 | 296 | 308 | ||||||||||||||||||||||||||
Canada |
348 | 365 | 210 | 329 | 453 | 56 | 476 | 256 | 367 | 210 | 160 | 263 | ||||||||||||||||||||||||||
U.S. |
101 | 132 | 175 | 168 | 202 | 125 | 149 | 56 | 110 | 94 | 213 | 169 | ||||||||||||||||||||||||||
Asia |
44 | 211 | 122 | 134 | 92 | — | 7 | 111 | 98 | 125 | 131 | 161 | ||||||||||||||||||||||||||
Corporate |
(41) | (105) | (95) | (79) | 97 | (288) | — | (69) | 54 | (178) | (15) | (43) | ||||||||||||||||||||||||||
Total reported net income (loss) - Common shareholders |
749 | 871 | 660 | 806 | 1,165 | 111 | 930 | 665 | 951 | 466 | 785 | 858 |
M. Non-IFRS Financial Measures |
($ millions) | 2023 | |||||||||||||||||||
Statement of Operations | Underlying DOE(1) |
Non-underlying adjustments(1) |
Common Shareholders' Reported DOE(2)(3) |
Adjustment for: | Reported (per IFRS) |
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Par(2) |
Net(3) |
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Net insurance service result | 2,979 | (29) | 2,950 | 149 | (262) | 2,837 | ||||||||||||||
Net investment result | 1,710 | (682) | 1,028 | 94 | 517 | 1,639 | ||||||||||||||
ACMA(3) |
53 | 53 | — | (53) | ||||||||||||||||
Fee Income: | ||||||||||||||||||||
Asset Management | 1,677 | (270) | 1,407 | (1,407) | ||||||||||||||||
Other fee income | 247 | 12 | 259 | (15) | 7,588 | 7,832 | ||||||||||||||
Fee income | 7,832 | |||||||||||||||||||
Other expenses | (1,928) | (167) | (2,095) | — | (6,283) | (8,378) | ||||||||||||||
Income before taxes | 4,685 | (1,083) | 3,602 | 228 | 100 | 3,930 | ||||||||||||||
Income tax (expense) benefit | (811) | 404 | (407) | (50) | (4) | (461) | ||||||||||||||
Total net income | 3,874 | (679) | 3,195 | 178 | 96 | 3,469 | ||||||||||||||
Allocated to Participating and NCI(4) |
(67) | 37 | (30) | (178) | (96) | (304) | ||||||||||||||
Dividends and Distributions(5) |
(79) | — | (79) | — | — | (79) | ||||||||||||||
Underlying net income(1) |
3,728 | |||||||||||||||||||
Reported net income - Common shareholders | (642) | 3,086 | — | — | 3,086 |
($ millions) | 2022 | |||||||||||||||||||
Statement of Operations | Underlying DOE(1) |
Non-underlying adjustments(1) |
Common Shareholders' Reported DOE(2)(3) |
Adjustment for: | Reported (per IFRS) |
|||||||||||||||
Par(2) |
Net(3) |
|||||||||||||||||||
Net insurance service result | 2,376 | (75) | 2,301 | 18 | (26) | 2,293 | ||||||||||||||
Net investment result | 1,237 | 356 | 1,593 | 11 | (181) | 1,423 | ||||||||||||||
ACMA(3) |
(239) | (239) | — | 239 | ||||||||||||||||
Fee income: | ||||||||||||||||||||
Asset Management | 1,651 | (119) | 1,532 | (1,532) | ||||||||||||||||
Other fee income | 298 | — | 298 | — | 7,149 | 7,447 | ||||||||||||||
Fee income | 7,447 | |||||||||||||||||||
Other expenses | (1,435) | (470) | (1,905) | — | (5,632) | (7,537) | ||||||||||||||
Income before taxes | 4,127 | (547) | 3,580 | 29 | 17 | 3,626 | ||||||||||||||
Income tax (expense) benefit | (637) | 34 | (603) | 55 | 2 | (546) | ||||||||||||||
Total net income | 3,490 | (513) | 2,977 | 84 | 19 | 3,080 | ||||||||||||||
Allocated to Participating and NCI(4) |
(51) | 15 | (36) | (84) | (19) | (139) | ||||||||||||||
Dividends and Distributions(5) |
(70) | — | (70) | — | — | (70) | ||||||||||||||
Underlying net income(1) |
3,369 | |||||||||||||||||||
Reported net income - Common shareholders | (498) | 2,871 | — | — | 2,871 |
($ millions, after-tax) | 2023 | 2022(1) |
||||||
Underlying net income | 3,728 | 3,369 | ||||||
Market-related impacts(1) |
||||||||
Equity market impacts | (13) | (143) | ||||||
Interest rate impacts(2) |
(14) | 56 | ||||||
Impacts of changes in the fair value of investment properties (real estate experience) | (427) | 66 | ||||||
Add: Market-related impacts | (454) | (21) | ||||||
Add: Assumption changes and management actions | 36 | (168) | ||||||
Other adjustments | ||||||||
Management's ownership of MFS shares | 12 | 115 | ||||||
Acquisition, integration and restructuring(3)(4)(5)(6)(7) |
(155) | (492) | ||||||
Intangible asset amortization | (132) | (97) | ||||||
Other(8)(9)(10)(11) |
51 | 165 | ||||||
Add: Total of other adjustments | (224) | (309) | ||||||
Reported net income - Common shareholders | 3,086 | 2,871 | ||||||
Underlying EPS (diluted) ($) | 6.36 | 5.75 | ||||||
Add: Market-related impacts ($) | (0.78) | (0.04) | ||||||
Assumption changes and management actions ($) | 0.06 | (0.29) | ||||||
Management's ownership of MFS shares ($) | 0.02 | 0.20 | ||||||
Acquisition, integration and restructuring ($) | (0.26) | (0.86) | ||||||
Intangible asset amortization ($) | (0.23) | (0.17) | ||||||
Other ($) | 0.09 | 0.28 | ||||||
Impact of convertible securities on diluted EPS ($) | — | 0.02 | ||||||
Reported EPS (diluted) ($) | 5.26 | 4.89 |
($ millions) | 2023 | 2022(1) |
||||||
Underlying net income (after-tax) | 3,728 | 3,369 | ||||||
Underlying net income adjustments (pre-tax): | ||||||||
Add: Market-related impacts(1) |
(726) | 233 | ||||||
Assumption changes and management actions(2) |
53 | (239) | ||||||
Other adjustments | (373) | (526) | ||||||
Total underlying net income adjustments (pre-tax) | (1,046) | (532) | ||||||
Add: Taxes related to underlying net income adjustments | 404 | 34 | ||||||
Reported net income - Common shareholders (after-tax) | 3,086 | 2,871 |
($ millions) | As at December 31, 2023 | As at December 31, 2022 | ||||||
Cash and other liquid assets (held at SLF Inc. and its wholly owned holding companies): | ||||||||
Cash, cash equivalents & short-term securities | 712 | 423 | ||||||
Debt securities(1) |
1,228 | 1,408 | ||||||
Equity securities(2) |
102 | 102 | ||||||
Sub-total | 2,042 | 1,933 | ||||||
Less: Loans related to acquisitions (held at SLF Inc. and its wholly owned holding companies) | (411) | (883) | ||||||
Cash and other liquid assets (held at SLF Inc. and its wholly owned holding companies) | 1,631 | 1,050 |
SLC Management | ||||||||
($ millions) | 2023 | 2022 | ||||||
Fee income (per IFRS) |
1,640 | 1,412 | ||||||
Less: Non-fee-related revenue adjustments(1)(2) |
444 | 435 | ||||||
Fee-related revenue | 1,196 | 977 | ||||||
Total expenses (per IFRS) | 1,603 | 1,406 | ||||||
Less: Non-fee-related expense adjustments(2)(3) |
697 | 666 | ||||||
Fee-related expenses | 906 | 740 | ||||||
Fee-related earnings | 290 | 237 | ||||||
Add: Investment income (loss) and performance fees(4) |
102 | 56 | ||||||
Add: Interest and other(5) |
(110) | (50) | ||||||
Operating income | 282 | 243 |
($ millions) | 2023 | 2022 | ||||||
Net investment income (loss) (per IFRS) | 55 | 12 | ||||||
Less: Market-related impacts and Other - Investment income (loss) | (14) | (36) | ||||||
Add: Investment income (loss) and performance fees - fee income | 33 | 8 | ||||||
Investment income (loss) and performance fees | 102 | 56 |
MFS | ||||||||
(US$ millions) | 2023 | 2022 | ||||||
Revenue |
||||||||
Fee income (per IFRS) | 3,196 | 3,323 | ||||||
Less: Commissions | 395 | 433 | ||||||
Less: Other(1) |
(53) | (53) | ||||||
Adjusted revenue | 2,854 | 2,943 | ||||||
Expenses | ||||||||
Expenses (per IFRS) | 2,244 | 2,162 | ||||||
Net investment (income)/loss (per IFRS) | (93) | (18) | ||||||
Less: Management's ownership of MFS shares (net of NCI)(2) |
34 | (45) | ||||||
Compensation-related equity plan adjustments | 16 | 7 | ||||||
Commissions | 395 | 433 | ||||||
Other(1) |
(52) | (53) | ||||||
Adjusted expenses | 1,758 | 1,802 | ||||||
Pre-tax net operating margin | 38% | 39% |
Q4'23 |
||||||||||||||||||||
($ millions) | Asset Management |
Canada | U.S. | Asia | Corporate | Total | ||||||||||||||
Underlying net income (loss) | 331 | 350 | 253 | 143 | (94) | 983 | ||||||||||||||
Add: Market-related impacts (pre-tax) | (11) | (223) | (60) | (142) | — | (436) | ||||||||||||||
ACMA (pre-tax) | — | 72 | (65) | (1) | — | 6 | ||||||||||||||
Other adjustments (pre-tax) | (39) | (6) | (65) | (8) | — | (118) | ||||||||||||||
Tax expense (benefit) |
16 | 155 | 38 | 52 | 53 | 314 | ||||||||||||||
Reported net income (loss) - Common shareholders | 297 | 348 | 101 | 44 | (41) | 749 | ||||||||||||||
Q4'22(1) |
||||||||||||||||||||
Underlying net income (loss) | 324 | 265 | 230 | 135 | (62) | 892 | ||||||||||||||
Add: Market-related impacts (pre-tax)(1) |
(8) | 250 | 21 | (110) | 26 | 179 | ||||||||||||||
ACMA (pre-tax) | — | (185) | 71 | 71 | 17 | (26) | ||||||||||||||
Other adjustments (pre-tax) | 1 | (5) | (135) | 15 | (17) | (141) | ||||||||||||||
Tax expense (benefit) |
4 | 128 | 15 | (19) | 133 | 261 | ||||||||||||||
Reported net income (loss) - Common shareholders | 321 | 453 | 202 | 92 | 97 | 1,165 |
2023 | ||||||||||||||||||||
($ millions) | Asset Management |
Canada | U.S. | Asia | Corporate | Total | ||||||||||||||
Underlying net income (loss) | 1,239 | 1,376 | 890 | 600 | (377) | 3,728 | ||||||||||||||
Add: Market-related impacts (pre-tax) | (61) | (433) | (59) | (156) | (17) | (726) | ||||||||||||||
ACMA (pre-tax) | — | 82 | (66) | 34 | 3 | 53 | ||||||||||||||
Other adjustments (pre-tax) | (172) | 90 | (272) | (28) | 9 | (373) | ||||||||||||||
Tax expense (benefit) |
61 | 137 | 83 | 61 | 62 | 404 | ||||||||||||||
Reported net income (loss) - Common shareholders | 1,067 | 1,252 | 576 | 511 | (320) | 3,086 | ||||||||||||||
2022(1) |
||||||||||||||||||||
Underlying net income (loss) | 1,238 | 1,063 | 698 | 539 | (169) | 3,369 | ||||||||||||||
Add: Market-related impacts (pre-tax)(1) |
(21) | 651 | (41) | (317) | (39) | 233 | ||||||||||||||
ACMA (pre-tax) | — | (312) | 66 | 1 | 6 | (239) | ||||||||||||||
Other adjustments (pre-tax) | (83) | (19) | (240) | 2 | (186) | (526) | ||||||||||||||
Tax expense (benefit) |
14 | (142) | 49 | (15) | 128 | 34 | ||||||||||||||
Reported net income (loss) - Common shareholders | 1,148 | 1,241 | 532 | 210 | (260) | 2,871 |
Q4'23 |
Q4'22 |
|||||||||||||
($ millions) | MFS | SLC Management |
MFS | SLC Management |
||||||||||
Underlying net income (loss) | 261 | 70 | 276 | 48 | ||||||||||
Add: Market-related impacts (pre-tax) | — | (11) | — | (8) | ||||||||||
Other adjustments (pre-tax) |
(7) | (32) | 31 | (30) | ||||||||||
Tax expense (benefit) |
(4) | 20 | (4) | 8 | ||||||||||
Reported net income (loss) - Common shareholders | 250 | 47 | 303 | 18 |
2023 | 2022 | |||||||||||||
($ millions) | MFS | SLC Management |
MFS | SLC Management |
||||||||||
Underlying net income (loss) | 1,044 | 195 | 1,080 | 158 | ||||||||||
Add: Market-related impacts (pre-tax) | — | (61) | — | (21) | ||||||||||
Other adjustments (pre-tax) |
30 | (202) | 132 | (215) | ||||||||||
Tax expense (benefit) | (18) | 79 | (17) | 31 | ||||||||||
Reported net income (loss) - Common shareholders | 1,056 | 11 | 1,195 | (47) |
Q4'23 |
Q4'22(1) |
|||||||||||||
(US$ millions) | U.S. | MFS | U.S. | MFS | ||||||||||
Underlying net income (loss) | 187 | 191 | 173 | 202 | ||||||||||
Add: Market-related impacts (pre-tax)(1) |
(42) | — | 15 | — | ||||||||||
ACMA (pre-tax) | (49) | — | 53 | — | ||||||||||
Other adjustments (pre-tax) | (47) | (5) | (99) | 24 | ||||||||||
Tax expense (benefit) |
28 | (3) | 9 | (3) | ||||||||||
Reported net income (loss) - Common shareholders | 77 | 183 | 151 | 223 | ||||||||||
2023 | 2022(1) |
|||||||||||||
(US$ millions) | U.S. | MFS | U.S. | MFS | ||||||||||
Underlying net income (loss) | 663 | 773 | 531 | 832 | ||||||||||
Add: Market-related impacts (pre-tax)(1) |
(40) | — | (43) | — | ||||||||||
ACMA (pre-tax) | (48) | — | 49 | — | ||||||||||
Other adjustments (pre-tax) | (200) | 22 | (181) | 100 | ||||||||||
Tax expense (benefit) |
65 | (13) | 48 | (13) | ||||||||||
Reported net income (loss) - Common shareholders | 440 | 782 | 404 | 919 |
(US$ millions) | Q4'23 | Q3'23 | Q2'23 | Q1'23 | Q4'22(1) |
Q3'22(1) |
Q2'22(1) |
Q1'22(1) |
||||||||||||||||||
Underlying net income (loss) for U.S. Group Benefits(2) |
138 | 96 | 116 | 128 | 119 | 101 | 87 | 49 | ||||||||||||||||||
Add: Market-related impacts (pre-tax)(1) |
14 | (10) | (6) | 4 | (1) | (24) | (10) | (14) | ||||||||||||||||||
ACMA (pre-tax) | (11) | 47 | — | — | 8 | (7) | — | — | ||||||||||||||||||
Other adjustments (pre-tax) | (9) | (6) | (6) | (5) | (5) | (4) | (6) | (6) | ||||||||||||||||||
Tax expense (benefit) |
1 | (6) | 2 | 1 | (2) | 8 | 4 | 5 | ||||||||||||||||||
Reported net income (loss) - Common shareholders(2) |
133 | 121 | 106 | 128 | 119 | 74 | 75 | 34 |
N. Accounting and Control Matters |
($ millions) | As at December 31, 2023 |
As at December 31, 2022 | ||||||||||||
Sensitivity(1) |
Potential impact on CSM (pre-tax) |
Potential impact on
net income/equity (after-tax)
|
Potential impact on CSM (pre-tax) |
Potential impact on
net income/equity (after-tax)
|
||||||||||
Policyholder Behaviour (10% increase/decrease, where adverse) | (950) | 100 | (850) | 75 | ||||||||||
Life Mortality rates (2% increase) | (75) | (25) | (75) | (25) | ||||||||||
Annuity Mortality rates (2% decrease) | (175) | — | (175) | 25 | ||||||||||
Morbidity rates (5% incidence increase and 5% termination decrease) | (100) | (175) | (75) | (175) | ||||||||||
Expenses (5% increase) | (175) | — | (175) | — |
O. Legal and Regulatory Proceedings |
P. Forward-looking Statements |
FINANCIAL REPORTING RESPONSIBILITIES | |||||||||||
APPOINTED ACTUARY’S REPORT | |||||||||||
INDEPENDENT AUDITOR’S REPORT | 4 | ||||||||||
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |||||||||||
CONSOLIDATED FINANCIAL STATEMENTS | |||||||||||
Consolidated Statements of Operations | |||||||||||
Consolidated Statements of Comprehensive Income (Loss) | |||||||||||
Consolidated Statements of Financial Position | |||||||||||
Consolidated Statements of Changes in Equity | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | |||||||||||
Material Accounting Policies | Note 1 | ||||||||||
Changes in Accounting Policies | Note 2 | ||||||||||
Acquisitions and Other | Note 3 | ||||||||||
Segmented Information | Note 4 | ||||||||||
Total Invested Assets and Related Net Investment Income | Note 5 | ||||||||||
Financial Instrument Risk Management | Note 6 | ||||||||||
Insurance Risk Management | Note 7 | ||||||||||
Other Assets | Note 8 | ||||||||||
Goodwill and Intangible Assets | Note 9 | ||||||||||
Insurance Contracts | Note 10 | ||||||||||
Other Liabilities | Note 11 | ||||||||||
Senior Debentures and Innovative Capital Instruments | Note 12 | ||||||||||
Subordinated Debt | Note 13 | ||||||||||
Share Capital | Note 14 | ||||||||||
Interests in Other Entities | Note 15 | ||||||||||
Fee Income | Note 16 | ||||||||||
Operating expenses and commissions | Note 17 | ||||||||||
Share-Based Payments | Note 18 | ||||||||||
Income Taxes | Note 19 | ||||||||||
Capital Management | Note 20 | ||||||||||
Segregated Funds | Note 21 | ||||||||||
Commitments, Guarantees and Contingencies | Note 22 | ||||||||||
Related Party Transactions | Note 23 | ||||||||||
Pension Plans and Other Post-Retirement Benefits | Note 24 | ||||||||||
Earnings (Loss) Per Share | Note 25 | ||||||||||
Accumulated Other Comprehensive Income (Loss) | Note 26 | ||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
For the years ended December 31, (in millions of Canadian dollars, except for per share amounts) | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Insurance service result |
||||||||||||||
Insurance revenue (Note 10) |
$ | 21,356 | $ | 18,902 | ||||||||||
Insurance service expenses (Note 10) |
(18,450) | (16,456) | ||||||||||||
Reinsurance contract held net income (expenses) (Note 10) |
(69) | (153) | ||||||||||||
Net insurance service result |
2,837 | 2,293 | ||||||||||||
Investment result |
||||||||||||||
Investment result excluding result for account of segregated fund holders: | ||||||||||||||
Net investment income (loss) (Note 5) |
11,586 | (20,580) | ||||||||||||
Insurance finance income (expenses) from insurance contracts issued (Note 5) |
(9,675) | 22,595 | ||||||||||||
Insurance finance income (expenses) from reinsurance contracts held (Note 5) |
59 | (440) | ||||||||||||
Decrease (increase) in investment contract liabilities |
(331) | (152) | ||||||||||||
Net investment result excluding result for account of segregated fund holders |
1,639 | 1,423 | ||||||||||||
Investment result for insurance contracts for account of segregated fund holders: | ||||||||||||||
Investment income (loss) on investments for account of segregated fund holders (Note 21) |
1,793 | (2,353) | ||||||||||||
Insurance finance income (expenses) (Note 21) |
(1,793) | 2,353 | ||||||||||||
Net investment result for insurance contracts for account of segregated fund holders | — | — | ||||||||||||
Net investment result |
1,639 | 1,423 | ||||||||||||
Fee income (Note 16) |
7,832 | 7,447 | ||||||||||||
Other expenses (income) |
||||||||||||||
Other income | (169) | — | ||||||||||||
Operating expenses and commissions (Note 17) |
7,995 | 7,092 | ||||||||||||
Interest expenses | 552 | 445 | ||||||||||||
Total other expenses (income) |
8,378 | 7,537 | ||||||||||||
Income (loss) before income taxes | 3,930 | 3,626 | ||||||||||||
Less: Income tax expense (benefit) (Note 19) |
461 | 546 | ||||||||||||
Total net income (loss) | 3,469 | 3,080 | ||||||||||||
Less: Net income (loss) allocated to the participating account (Note 20) |
178 | 83 | ||||||||||||
Net income (loss) attributable to non-controlling interests | 126 | 56 | ||||||||||||
Shareholders' net income (loss) | 3,165 | 2,941 | ||||||||||||
Less: Dividends on preferred shares and distributions on other equity instruments | 79 | 70 | ||||||||||||
Common shareholders' net income (loss) | $ | 3,086 | $ | 2,871 | ||||||||||
Average exchange rates during the reporting periods: U.S. dollars |
1.35 | 1.30 | ||||||||||||
Earnings (loss) per share (Note 25) |
||||||||||||||
Basic | $ | 5.27 | $ | 4.90 | ||||||||||
Diluted | $ | 5.26 | $ | 4.89 | ||||||||||
Dividends per common share | $ | 3.000 | $ | 2.760 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
For the years ended December 31, (in millions of Canadian dollars) | 2023 | 2022 | |||||||||
(restated, see Note 2) | |||||||||||
Total net income (loss) | $ | 3,469 | $ | 3,080 | |||||||
Other comprehensive income (loss), net of taxes: | |||||||||||
Items that may be reclassified subsequently to income: | |||||||||||
Change in unrealized foreign currency translation gains (losses): | |||||||||||
Unrealized gains (losses) | (290) | 677 | |||||||||
Reclassifications to net income (loss) | (49) | — | |||||||||
Change in unrealized gains (losses) on investments at fair value through other comprehensive income: | |||||||||||
Unrealized gains (losses) | 482 | (1,231) | |||||||||
Reclassifications to net income (loss) and provision for credit losses recognized into income | 3 | (20) | |||||||||
Classification overlay (Note 2) |
(232) | ||||||||||
Change in unrealized gains (losses) on cash flow hedges: | |||||||||||
Unrealized gains (losses) | (11) | 42 | |||||||||
Reclassifications to net income (loss) | 28 | (53) | |||||||||
Share of other comprehensive income (loss) in joint ventures and associates: | |||||||||||
Unrealized gains (losses) | (44) | (60) | |||||||||
Total items that may be reclassified subsequently to income | 119 | (877) | |||||||||
Items that will not be reclassified subsequently to income: | |||||||||||
Remeasurement of defined benefit plans | (105) | 171 | |||||||||
Share of other comprehensive income (loss) in joint ventures and associates | 7 | (3) | |||||||||
Revaluation of property, plant and equipment | — | (2) | |||||||||
Total items that will not be reclassified subsequently to income | (98) | 166 | |||||||||
Total other comprehensive income (loss) | 21 | (711) | |||||||||
Total comprehensive income (loss) | 3,490 | 2,369 | |||||||||
Less: Comprehensive income (loss) allocated to the participating account (Note 20) |
187 | 78 | |||||||||
Non-controlling interests' comprehensive income (loss) (Note 20) |
123 | 60 | |||||||||
Shareholders’ comprehensive income (loss) | $ | 3,180 | $ | 2,231 |
INCOME TAXES INCLUDED IN OTHER COMPREHENSIVE INCOME (LOSS) |
For the years ended December 31, (in millions of Canadian dollars) | 2023 | 2022 | |||||||||
(restated, see Note 2) | |||||||||||
Income tax benefit (expense): | |||||||||||
Items that may be reclassified subsequently to income: | |||||||||||
Unrealized foreign currency translation gains (losses) | $ | (5) | $ | 7 | |||||||
Change in unrealized gains (losses) on investments at fair value through other comprehensive income: | |||||||||||
Unrealized gains (losses) | (120) | 311 | |||||||||
Reclassifications to net income (loss) and provision for credit losses recognized into income | (7) | 2 | |||||||||
Classification overlay (Note 2) |
57 | ||||||||||
Unrealized gains (losses) on cash flow hedges | (1) | 6 | |||||||||
Reclassifications to net income for cash flow hedges | (6) | — | |||||||||
Total items that may be reclassified subsequently to income | (139) | 383 | |||||||||
Items that will not be reclassified subsequently to income: | |||||||||||
Remeasurement of defined benefit plans | 38 | (75) | |||||||||
Revaluation of property, plant and equipment | — | (2) | |||||||||
Total items that will not be reclassified subsequently to income | 38 | (77) | |||||||||
Total income tax benefit (expense) included in other comprehensive income (loss) | $ | (101) | $ | 306 |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
As at | ||||||||||||||||||||
(in millions of Canadian dollars) |
December 31, 2023 | December 31, 2022 | January 1, 2022 | |||||||||||||||||
(restated, see Note 2) | (restated, see Note 2) | |||||||||||||||||||
Assets | ||||||||||||||||||||
Cash, cash equivalents and short-term securities (Note 5) |
$ | 13,173 | $ | 11,219 | $ | 12,278 | ||||||||||||||
Debt securities (Notes 5 and 6) |
75,493 | 75,902 | 88,727 | |||||||||||||||||
Equity securities (Notes 5 and 6) |
7,138 | 7,148 | 9,113 | |||||||||||||||||
Mortgages and loans (Notes 5 and 6) |
54,600 | 51,253 | 55,727 | |||||||||||||||||
Derivative assets (Notes 5 and 6) | 2,183 | 2,095 | 1,583 | |||||||||||||||||
Other financial invested assets (Note 5) |
10,361 | 9,418 | 7,071 | |||||||||||||||||
Financial assets | 162,948 | 157,035 | 174,499 | |||||||||||||||||
Investment properties (Note 5) |
9,723 | 10,102 | 9,109 | |||||||||||||||||
Other non-financial invested assets (Note 5) | 1,657 | 1,652 | 1,660 | |||||||||||||||||
Invested assets | 174,328 | 168,789 | 185,268 | |||||||||||||||||
Other assets (Note 8) |
6,462 | 6,442 | 4,279 | |||||||||||||||||
Reinsurance contract held assets (Note 10) |
5,794 | 6,115 | 6,612 | |||||||||||||||||
Insurance contract assets (Note 10) |
184 | 75 | 162 | |||||||||||||||||
Deferred tax assets (Note 19) |
3,878 | 3,466 | 2,940 | |||||||||||||||||
Intangible assets (Note 9) |
5,174 | 4,724 | 3,370 | |||||||||||||||||
Goodwill (Note 9) |
8,969 | 8,705 | 6,517 | |||||||||||||||||
Total general fund assets | 204,789 | 198,316 | 209,148 | |||||||||||||||||
Investments for account of segregated fund holders (Note 21) |
128,452 | 125,292 | 139,996 | |||||||||||||||||
Total assets | $ | 333,241 | $ | 323,608 | $ | 349,144 | ||||||||||||||
Liabilities and equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Insurance contract liabilities excluding those for account of segregated fund holders (Note 10) |
$ | 135,669 | $ | 131,294 | $ | 149,412 | ||||||||||||||
Reinsurance contract held liabilities (Note 10) |
1,623 | 1,603 | 1,994 | |||||||||||||||||
Investment contract liabilities (Note 5) |
11,672 | 10,728 | 9,914 | |||||||||||||||||
Derivative liabilities (Notes 5 and 6) | 1,311 | 2,351 | 1,392 | |||||||||||||||||
Deferred tax liabilities (Note 19) |
281 | 468 | 234 | |||||||||||||||||
Other liabilities (Note 11) |
23,655 | 22,109 | 17,371 | |||||||||||||||||
Senior debentures (Note 12) |
200 | 200 | 200 | |||||||||||||||||
Subordinated debt (Note 13) |
6,178 | 6,676 | 6,425 | |||||||||||||||||
Total general fund liabilities | 180,589 | 175,429 | 186,942 | |||||||||||||||||
Insurance contract liabilities for account of segregated fund holders (Note 21) |
19,041 | 23,139 | 26,079 | |||||||||||||||||
Investment contract liabilities for account of segregated fund holders (Note 21) |
109,411 | 102,153 | 113,917 | |||||||||||||||||
Total liabilities | $ | 309,041 | $ | 300,721 | $ | 326,938 | ||||||||||||||
Equity | ||||||||||||||||||||
Issued share capital and contributed surplus | $ | 10,660 | $ | 10,640 | $ | 10,615 | ||||||||||||||
Shareholders’ retained earnings and accumulated other comprehensive income | 12,922 | 11,889 | 11,342 | |||||||||||||||||
Total shareholders’ equity | 23,582 | 22,529 | 21,957 | |||||||||||||||||
Equity in the participating account | 457 | 268 | 190 | |||||||||||||||||
Non-controlling interests’ equity | 161 | 90 | 59 | |||||||||||||||||
Total equity | $ | 24,200 | $ | 22,887 | $ | 22,206 | ||||||||||||||
Total liabilities and equity | $ | 333,241 | $ | 323,608 | $ | 349,144 | ||||||||||||||
Exchange rates at the end of the reporting periods: U.S. dollars |
1.32 | 1.35 | 1.26 |
Kevin Strain | Barbara G. Stymiest | ||||
Chief Executive Officer | Director |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
For the years ended December 31, (in millions of Canadian dollars) | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Shareholders: | ||||||||||||||
Preferred shares and other equity instruments (Note 14) |
||||||||||||||
Balance, beginning and end of year |
$ | 2,239 | $ | 2,239 | ||||||||||
Common shares (Note 14) |
||||||||||||||
Balance, beginning of year |
8,311 | 8,305 | ||||||||||||
Stock options exercised | 56 | 6 | ||||||||||||
Common shares purchased for cancellation | (40) | — | ||||||||||||
Balance, end of year |
8,327 | 8,311 | ||||||||||||
Contributed surplus | ||||||||||||||
Balance, beginning of year |
90 | 71 | ||||||||||||
Share-based payments | 11 | 19 | ||||||||||||
Stock options exercised | (7) | — | ||||||||||||
Balance, end of year |
94 | 90 | ||||||||||||
Retained earnings | ||||||||||||||
Balance, beginning of year |
11,729 | 14,713 | ||||||||||||
Transition adjustment — IFRS 17 (Note 2) |
(7,114) | |||||||||||||
Transition adjustment — IFRS 9 (Note 2) |
(553) | |||||||||||||
Transition adjustment — Classification overlay (Note 2) |
2,873 | |||||||||||||
Balance, beginning of year, after change in accounting policies |
11,176 | 10,472 | ||||||||||||
Net income (loss) | 3,165 | 2,941 | ||||||||||||
Dividends on common shares | (1,762) | (1,614) | ||||||||||||
Dividends on preferred shares and distributions on other equity instruments | (79) | (70) | ||||||||||||
Common shares purchased for cancellation (Note 14) |
(146) | — | ||||||||||||
Transfer from accumulated other comprehensive income (loss) | (37) | — | ||||||||||||
Changes attributable to acquisition (Note 3) |
(160) | — | ||||||||||||
Balance, end of year |
12,157 | 11,729 | ||||||||||||
Accumulated other comprehensive income (loss), net of taxes (Note 26) |
||||||||||||||
Balance, beginning of year |
160 | 986 | ||||||||||||
Transition adjustment — IFRS 9 (Note 2) |
553 | |||||||||||||
Transition adjustment — Classification overlay (Note 2) |
(116) | |||||||||||||
Balance, beginning of year, after change in accounting policy |
713 | 870 | ||||||||||||
Total other comprehensive income (loss) for the year |
15 | (710) | ||||||||||||
Transfer to retained earnings | 37 | — | ||||||||||||
Balance, end of year |
765 | 160 | ||||||||||||
Total shareholders’ equity, end of year |
$ | 23,582 | $ | 22,529 | ||||||||||
Equity in the participating account: | ||||||||||||||
Balance, beginning of year |
$ | 268 | $ | 1,700 | ||||||||||
Transition adjustment — IFRS 17 (Note 2) |
(1,907) | |||||||||||||
Transition adjustment — IFRS 9 (Note 2) |
2 | |||||||||||||
Transition adjustment — Classification overlay (Note 2) |
397 | |||||||||||||
Balance, beginning of year, after changes in accounting policies |
270 | 190 | ||||||||||||
Net income (loss) | 178 | 83 | ||||||||||||
Total other comprehensive income (loss) for the year (Note 26) |
9 | (5) | ||||||||||||
Total equity in the participating account, end of year |
$ | 457 | $ | 268 | ||||||||||
Non-controlling interests: | ||||||||||||||
Balance, beginning of year |
$ | 90 | $ | 59 | ||||||||||
Net income (loss) | 126 | 56 | ||||||||||||
Additional contribution | — | 2 | ||||||||||||
Total other comprehensive income (loss) for the year (Note 26) |
(3) | 4 | ||||||||||||
Distribution to non-controlling interests | (52) | (31) | ||||||||||||
Total non-controlling interests’ equity, end of year |
$ | 161 | $ | 90 | ||||||||||
Total equity | $ | 24,200 | $ | 22,887 |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
For the years ended December 31, (in millions of Canadian dollars) | 2023 | 2022 | |||||||||
(restated, see Note 2) | |||||||||||
Cash flows provided by (used in) operating activities | |||||||||||
Income (loss) before income taxes |
$ | 3,930 | $ | 3,626 | |||||||
Adjustments: |
|||||||||||
Interest expense related to financing activities |
408 | 279 | |||||||||
(Decrease) increase in investment contract liabilities | 331 | 152 | |||||||||
Changes in insurance contract liabilities and assets | 6,769 | (25,041) | |||||||||
Changes in reinsurance contract held assets and liabilities | 10 | 593 | |||||||||
Realized and unrealized (gains) losses and foreign currency changes on invested assets | (4,657) | 26,582 | |||||||||
Sales, maturities and repayments of invested assets | 43,457 | 53,535 | |||||||||
Purchases of invested assets | (48,579) | (57,153) | |||||||||
Income taxes received (paid) | (1,240) | (795) | |||||||||
Mortgage securitization (Note 5) |
(39) | 151 | |||||||||
Other operating activities | 5,222 | 2,382 | |||||||||
Net cash provided by (used in) operating activities | 5,612 | 4,311 | |||||||||
Cash flows provided by (used in) investing activities | |||||||||||
Net (purchase) sale of property and equipment | (172) | 71 | |||||||||
Investment in and transactions with joint ventures and associates (Note 15) |
(75) | (69) | |||||||||
Dividends and other proceeds related to joint ventures and associates (Note 15) |
32 | 27 | |||||||||
Acquisitions, net of cash and cash equivalents acquired (Note 3)(1) |
(439) | (2,633) | |||||||||
Dispositions, net of cash and cash equivalents disposed (Note 3)(2) |
297 | — | |||||||||
Other investing activities | (202) | (259) | |||||||||
Net cash provided by (used in) investing activities | (559) | (2,863) | |||||||||
Cash flows provided by (used in) financing activities | |||||||||||
Increase in (repayment of) borrowed funds (Note 11) |
(72) | (34) | |||||||||
Issuance of subordinated debt, net of issuance costs (Note 13) |
497 | 646 | |||||||||
Increase in (repayment of) borrowings from credit facility | 141 | 1,786 | |||||||||
Redemption of senior debentures and subordinated debt (Notes 12 and 13) |
(1,000) | (400) | |||||||||
Issuance of common shares on exercise of stock options | 49 | 6 | |||||||||
Transactions with non-controlling interests | (52) | (25) | |||||||||
Common shares purchased for cancellation (Note 14) |
(186) | — | |||||||||
Dividends paid on common and preferred shares | (1,882) | (1,671) | |||||||||
Payment of lease liabilities | (176) | (136) | |||||||||
Interest expense paid | (405) | (270) | |||||||||
Other financing activities | — | 27 | |||||||||
Net cash provided by (used in) financing activities | (3,086) | (71) | |||||||||
Changes due to fluctuations in exchange rates | (169) | 302 | |||||||||
Increase (decrease) in cash and cash equivalents |
1,798 | 1,679 | |||||||||
Net cash and cash equivalents, beginning of year |
9,372 | 7,693 | |||||||||
Net cash and cash equivalents, end of year |
11,170 | 9,372 | |||||||||
Short-term securities, end of year |
2,003 | 1,841 | |||||||||
Net cash, cash equivalents and short-term securities, end of year (Note 5) |
$ | 13,173 | $ | 11,213 |
Notes to the Consolidated Financial Statements |
1. Material Accounting Policies |
Insurance contract and investment contract assumptions and measurement |
Note 1 Insurance Contracts and Investment Contract Liabilities
Note 10 Insurance Contracts
|
||||
Determination of fair value |
Note 1 Basis of Consolidation
Note 1 Determination of Fair Value
Note 3 Acquisitions and Other
Note 5 Total Invested Assets and Related Net Investment Income
|
||||
Determination of fair value of insurance contracts on transition for adoption of IFRS 17 | Note 2 Changes in Accounting Policies |
||||
Income taxes |
Note 1 Income Taxes
Note 19 Income Taxes
|
||||
Pension plans |
Note 1 Pension Plans and Other Post-Retirement Benefits
Note 24 Pension Plans and Other Post-Retirement Benefits
|
||||
Goodwill and intangible assets on acquisition and impairment |
Note 1 Goodwill
Note 1 Intangible Assets
Note 3 Acquisitions and Other
Note 9 Goodwill and Intangible Assets
|
||||
Determination of control for purpose of consolidation |
Note 1 Basis of Consolidation
Note 15 Interests in Other Entities
|
||||
Share-based payments | Note 18 Share-Based Payments |
IFRS 9 | |||||
Cash, cash equivalents and short-term securities | FVTPL | ||||
Debt securities | FVTPL, FVOCI | ||||
Equity securities | FVTPL, FVOCI |
||||
Mortgages and loans | FVTPL, FVOCI, Amortized cost | ||||
Other financial invested assets | FVTPL |
2. Changes in Accounting Policies |
As at January 1, 2022 |
IFRS 9 Adjustments(1) |
IFRS 17 Adjustments | Other(2) |
As at January 1, 2022 subsequent to transition |
||||||||||||||||||||||||||||
Invested assets | $ | 181,261 | $ | 4,007 | $ | — | $ | — | $ | 185,268 | ||||||||||||||||||||||
Policy loans(3) |
3,261 | — | (3,261) | — | — | |||||||||||||||||||||||||||
Reinsurance contract held assets and Insurance contract assets(4) |
3,683 | — | 3,091 | — | 6,774 | |||||||||||||||||||||||||||
Other assets(3) |
157,165 | — | (1,156) | 1,093 | 157,102 | |||||||||||||||||||||||||||
Total assets |
$ | 345,370 | $ | 4,007 | $ | (1,326) | $ | 1,093 | $ | 349,144 | ||||||||||||||||||||||
Insurance contract liabilities and Reinsurance contract held liabilities(5) |
$ | 147,811 | $ | — | $ | 3,595 | $ | — | $ | 151,406 | ||||||||||||||||||||||
Investment contract liabilities(6) |
3,368 | — | 6,546 | — | 9,914 | |||||||||||||||||||||||||||
Other liabilities(3) |
166,118 | — | (412) | (88) | 165,618 | |||||||||||||||||||||||||||
Total liabilities | $ | 317,297 | $ | — | $ | 9,729 | $ | (88) | $ | 326,938 | ||||||||||||||||||||||
Total equity(7) |
$ | 28,073 | $ | 4,007 | $ | (11,055) | $ | 1,181 | $ | 22,206 | ||||||||||||||||||||||
Total liabilities and equity | $ | 345,370 | $ | 4,007 | $ | (1,326) | $ | 1,093 | $ | 349,144 |
Classification Category | IAS 39 | IFRS 9 | ||||||||||||||||||||||||||||||||||||||||||
Financial instrument | IAS 39 | IFRS 9 | As at December 31, 2021 |
Impact of classification overlay | As at January 1, 2022 |
|||||||||||||||||||||||||||||||||||||||
Assets impacted by the classification overlay: | ||||||||||||||||||||||||||||||||||||||||||||
Debt securities | AFS | FVTPL | $ | 125 | $ | — | $ | 125 | (1) |
|||||||||||||||||||||||||||||||||||
Debt securities | AFS | FVOCI | 12,604 | — | 12,604 | |||||||||||||||||||||||||||||||||||||||
Debt securities | FVTPL | FVOCI | 3,549 | — | 3,549 | (2) |
||||||||||||||||||||||||||||||||||||||
Equity securities | AFS | FVTPL | 1,575 | — | 1,575 | (3) |
||||||||||||||||||||||||||||||||||||||
Mortgages and loans | Loans and receivables | FVTPL | 47,772 | 4,015 | 51,787 | (4) |
||||||||||||||||||||||||||||||||||||||
Mortgages and loans | Loans and receivables | FVOCI | 1,594 | 20 | 1,614 | (5) |
||||||||||||||||||||||||||||||||||||||
Mortgages and loans | Loans and receivables | Amortized cost | 2,326 | — | 2,326 | (6) |
||||||||||||||||||||||||||||||||||||||
Other financial invested assets | AFS | FVTPL | 781 | — | 781 | (3) |
||||||||||||||||||||||||||||||||||||||
Other financial invested assets (CLOs) | Loans and receivables | FVOCI | 1,865 | (10) | 1,855 | (7) |
||||||||||||||||||||||||||||||||||||||
Assets not impacted by the classification overlay: | ||||||||||||||||||||||||||||||||||||||||||||
Derivative assets | FVTPL | FVTPL | 1,583 | — | 1,583 | |||||||||||||||||||||||||||||||||||||||
Other financial invested assets | FVTPL | FVTPL | 4,435 | — | 4,435 | |||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and short-term securities | FVTPL | FVTPL | 12,278 | — | 12,278 | |||||||||||||||||||||||||||||||||||||||
Debt securities | FVTPL | FVTPL | 72,449 | — | 72,449 | |||||||||||||||||||||||||||||||||||||||
Equity securities | FVTPL | FVTPL | 7,538 | — | 7,538 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 170,474 | $ | 4,025 | $ | 174,499 |
Reconciliation of carrying amount | ||||||||||||||||||||||||||||||||
Classification Category | IFRS 9(1) |
IFRS 9 | ||||||||||||||||||||||||||||||
As at | IFRS 9(4) |
December 31, 2022 | Reclassification(2) |
Remeasurement(3) |
January 1, 2023 |
|||||||||||||||||||||||||||
Financial assets with transition impact: | ||||||||||||||||||||||||||||||||
Debt securities | FVTPL | $ | 302 | $ | 3,079 | $ | — | $ | 3,381 | |||||||||||||||||||||||
Debt securities | FVOCI | 16,545 | (2,285) | — | 14,260 | |||||||||||||||||||||||||||
Debt securities | FVTPL | 59,055 | (794) | — | 58,261 | |||||||||||||||||||||||||||
Equity securities | FVTPL | 324 | (70) | — | 254 | |||||||||||||||||||||||||||
Equity securities | FVOCI | — | 70 | — | 70 | |||||||||||||||||||||||||||
Mortgages and loans | FVTPL | 47,208 | 150 | — | 47,358 | |||||||||||||||||||||||||||
Mortgages and loans | FVOCI | 1,804 | (150) | — | 1,654 | |||||||||||||||||||||||||||
Mortgages and loans | Amortized cost | 2,241 | — | 19 | 2,260 | |||||||||||||||||||||||||||
Other financial invested assets | FVTPL | 996 | — | — | 996 | |||||||||||||||||||||||||||
Other financial invested assets (CLOs)(5) |
FVTPL | 2,880 | — | — | 2,880 | |||||||||||||||||||||||||||
Financial assets with no transition impact: | ||||||||||||||||||||||||||||||||
Derivative assets | FVTPL | 2,095 | — | — | 2,095 | |||||||||||||||||||||||||||
Other financial invested assets | FVTPL | 5,542 | — | — | 5,542 | |||||||||||||||||||||||||||
Cash, cash equivalents and short-term securities | FVTPL | 11,219 | — | — | 11,219 | |||||||||||||||||||||||||||
Equity securities | FVTPL | 6,824 | — | — | 6,824 | |||||||||||||||||||||||||||
Total financial assets | $ | 157,035 | $ | — | $ | 19 | $ | 157,054 | ||||||||||||||||||||||||
IAS 39 | IFRS 9 | ||||||||||||||||||||||
As at | December 31, 2022 | January 1, 2023 | |||||||||||||||||||||
Previous measurement category | Carrying amount | Measurement category | Carrying amount | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Debt securities | FVTPL (designated) | $ | 3,703 | FVOCI | $ | 4,497 | |||||||||||||||||
Equity securities | FVTPL (designated) | $ | 6,824 | FVTPL | $ | 6,824 | |||||||||||||||||
Other financial invested assets | FVTPL (designated) | $ | 5,542 | FVTPL | $ | 5,542 |
IAS 39
December 31, 2022
|
Remeasurement |
IFRS 9
January 1, 2023
|
||||||||||||||||||
Debt securities at FVOCI under IFRS 9: |
||||||||||||||||||||
From AFS under IAS 39 |
$ | — | $ | 15 | $ | 15 | ||||||||||||||
From FVTPL under IAS 39 |
— | 17 | 17 | |||||||||||||||||
Mortgages and loans at FVTPL under IFRS 9: |
||||||||||||||||||||
From loans and receivables under IAS 39 |
151 | (151) | — | |||||||||||||||||
Mortgages and loans at FVOCI under IFRS 9: |
||||||||||||||||||||
From loans and receivables under IAS 39 |
33 | 1 | 34 | |||||||||||||||||
Mortgages and loans at amortized cost under IFRS 9: |
||||||||||||||||||||
From loans and receivables under IAS 39 | 8 | 1 | 9 | |||||||||||||||||
Total |
$ | 192 | $ | (117) | $ | 75 |
3. Acquisitions and Other |
As at October 3, 2023 | ||||||||||||||
Intangible assets and Goodwill(1) |
$ | 355 | ||||||||||||
Net assets | 32 | |||||||||||||
Liabilities(2) |
(37) | |||||||||||||
Total identifiable net assets at fair value | 350 | |||||||||||||
Existing ownership interest | (78) | |||||||||||||
Total consideration | $ | 272 |
As at April 3, 2023 | ||||||||||||||
Cash consideration | $ | 418 | ||||||||||||
Less: Net assets | (359) | |||||||||||||
Less: Foreign currency translation, transaction costs, and other adjustments | (47) | |||||||||||||
Total gain recognized in Total net income in current year | $ | 12 | ||||||||||||
As at February 1, 2023 | |||||
Intangible assets and Goodwill | $ | 519 | |||
Net assets | 44 | ||||
Deferred tax liability | (100) | ||||
Total identifiable net assets at fair value | 463 | ||||
Non-controlling interests(1) |
(213) | ||||
Total consideration | $ | 250 |
As at February 1, 2023 | Share purchase | Put option adjustments | Total | |||||||||||||||||
Cash consideration | $ | (250) | $ | — | $ | (250) | ||||||||||||||
Intangible assets and Goodwill(1) |
519 | — | 519 | |||||||||||||||||
Net assets | 44 | — | 44 | |||||||||||||||||
Total assets | $ | 313 | $ | — | $ | 313 | ||||||||||||||
Deferred tax liability | $ | (100) | $ | — | $ | (100) | ||||||||||||||
Other financial liabilities — put option |
— | (369) | (369) | |||||||||||||||||
Total liabilities | $ | (100) | $ | (369) | $ | (469) | ||||||||||||||
Non-controlling interests | $ | (213) | $ | 213 | $ | — | ||||||||||||||
Retained earnings | — | 156 | 156 | |||||||||||||||||
Total equity | $ | (213) | $ | 369 | $ | 156 |
As at June 1, 2022 | ||||||||||||||
Intangible assets | $ | 1,074 | ||||||||||||
Net assets | 255 | |||||||||||||
Deferred tax liabilities | (189) | |||||||||||||
Total identifiable net assets at fair value | 1,140 | |||||||||||||
Goodwill arising on acquisition(1) |
2,127 | |||||||||||||
Total consideration | $ | 3,267 |
4. Segmented Information |
For the years ended |
Canada | U.S. | Asset Management | Asia | Corporate | Consolidation adjustments | Total | |||||||||||||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Insurance revenue: | ||||||||||||||||||||||||||||||||||||||||||||
Annuities | $ | 1,916 | $ | 222 | $ | — | $ | 22 | $ | 98 | $ | — | $ | 2,258 | ||||||||||||||||||||||||||||||
Life insurance | 2,165 | 1,999 | — | 1,210 | (18) | — | 5,356 | |||||||||||||||||||||||||||||||||||||
Health insurance | 4,084 | 9,500 | — | 153 | 5 | — | 13,742 | |||||||||||||||||||||||||||||||||||||
Total Insurance revenue | 8,165 | 11,721 | — | 1,385 | 85 | — | 21,356 | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 7,514 | 1,321 | 187 | 2,347 | 312 | (95) | 11,586 | |||||||||||||||||||||||||||||||||||||
Fee income | 1,483 | 458 | 5,953 | 300 | 141 | (503) | 7,832 | |||||||||||||||||||||||||||||||||||||
Total revenue(1) |
17,162 | 13,500 | 6,140 | 4,032 | 538 | (598) | 40,774 | |||||||||||||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
Insurance service expenses | 6,855 | 10,522 | — | 972 | 101 | — | 18,450 | |||||||||||||||||||||||||||||||||||||
Reinsurance contract held net (income) expenses |
164 | (100) | — | 7 | (2) | — | 69 | |||||||||||||||||||||||||||||||||||||
Insurance finance (income) expenses from insurance contracts issued | 6,415 | 1,250 | — | 1,897 | 113 | — | 9,675 | |||||||||||||||||||||||||||||||||||||
Reinsurance finance (income) expenses | 2 | (57) | — | (4) | — | — | (59) | |||||||||||||||||||||||||||||||||||||
(Decrease) increase in investment contract liabilities | 326 | — | — | 5 | — | — | 331 | |||||||||||||||||||||||||||||||||||||
Other income | (102) | — | — | — | (67) | — | (169) | |||||||||||||||||||||||||||||||||||||
Interest expenses | 160 | 107 | 158 | 74 | 149 | (96) | 552 | |||||||||||||||||||||||||||||||||||||
Operating expenses and commissions | 1,751 | 1,031 | 4,480 | 489 | 746 | (502) | 7,995 | |||||||||||||||||||||||||||||||||||||
Total expenses(1) |
15,571 | 12,753 | 4,638 | 3,440 | 1,040 | (598) | 36,844 | |||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
1,591 | 747 | 1,502 | 592 | (502) | — | 3,930 | |||||||||||||||||||||||||||||||||||||
Less: Income tax expense (benefit) | 275 | 148 | 309 | (10) | (261) | — | 461 | |||||||||||||||||||||||||||||||||||||
Total net income (loss) | 1,316 | 599 | 1,193 | 602 | (241) | — | 3,469 | |||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) allocated to the participating account | 64 | 23 | — | 91 | — | — | 178 | |||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests
|
— | — | 126 | — | — | — | 126 | |||||||||||||||||||||||||||||||||||||
Shareholders' net income (loss) |
$ | 1,252 | $ | 576 | $ | 1,067 | $ | 511 | $ | (241) | $ | — | $ | 3,165 | ||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||
Insurance revenue: | ||||||||||||||||||||||||||||||||||||||||||||
Annuities | $ | 1,833 | $ | — | $ | — | $ | 29 | $ | 382 | $ | — | $ | 2,244 | ||||||||||||||||||||||||||||||
Life insurance | 2,125 | 1,811 | — | 1,212 | 72 | — | 5,220 | |||||||||||||||||||||||||||||||||||||
Health insurance | 4,153 | 7,193 | — | 82 | 10 | — | 11,438 | |||||||||||||||||||||||||||||||||||||
Total Insurance revenue | 8,111 | 9,004 | — | 1,323 | 464 | — | 18,902 | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | (10,698) | (3,840) | 37 | (4,739) | (1,246) | (94) | (20,580) | |||||||||||||||||||||||||||||||||||||
Fee income | 1,395 | 307 | 5,736 | 340 | 104 | (435) | 7,447 | |||||||||||||||||||||||||||||||||||||
Total revenue(1) |
(1,192) | 5,471 | 5,773 | (3,076) | (678) | (529) | 5,769 | |||||||||||||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
Insurance service expenses | 6,920 | 8,200 | — | 993 | 343 | — | 16,456 | |||||||||||||||||||||||||||||||||||||
Reinsurance contract held net (income) expenses |
262 | (91) | — | (25) | 7 | — | 153 | |||||||||||||||||||||||||||||||||||||
Insurance finance (income) expenses from insurance contracts issued | (11,752) | (4,744) | — | (4,813) | (1,286) | — | (22,595) | |||||||||||||||||||||||||||||||||||||
Reinsurance finance (income) expenses | (97) | 538 | — | (3) | 2 | — | 440 | |||||||||||||||||||||||||||||||||||||
(Decrease) increase in investment contract liabilities | 160 | — | — | (8) | — | — | 152 | |||||||||||||||||||||||||||||||||||||
Interest expenses | 201 | 73 | 96 | 65 | 95 | (85) | 445 | |||||||||||||||||||||||||||||||||||||
Operating expenses and commissions | 1,512 | 795 | 4,126 | 451 | 652 | (444) | 7,092 | |||||||||||||||||||||||||||||||||||||
Total expenses(1) |
(2,794) | 4,771 | 4,222 | (3,340) | (187) | (529) | 2,143 | |||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
1,602 | 700 | 1,551 | 264 | (491) | — | 3,626 | |||||||||||||||||||||||||||||||||||||
Less: Income tax expense (benefit) | 335 | 141 | 347 | 24 | (301) | — | 546 | |||||||||||||||||||||||||||||||||||||
Total net income (loss) | 1,267 | 559 | 1,204 | 240 | (190) | — | 3,080 | |||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) allocated to the participating account | 26 | 27 | — | 30 | — | — | 83 | |||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests | — | — | 56 | — | — | — | 56 | |||||||||||||||||||||||||||||||||||||
Shareholders' net income (loss) |
$ | 1,241 | $ | 532 | $ | 1,148 | $ | 210 | $ | (190) | $ | — | $ | 2,941 |
Canada | U.S. | Asset Management |
Asia | Corporate | Consolidation adjustments |
Total | ||||||||||||||||||||||||||||||||||||||
As at December 31, 2023 |
||||||||||||||||||||||||||||||||||||||||||||
Total general fund assets | $ | 114,838 | $ | 34,820 | $ | 9,979 | $ | 37,405 | $ | 8,804 | $ | (1,057) | $ | 204,789 | ||||||||||||||||||||||||||||||
Investments for account of segregated fund holders |
$ | 120,963 | $ | 414 | $ | — | $ | 7,075 | $ | — | $ | — | $ | 128,452 | ||||||||||||||||||||||||||||||
Total general fund liabilities | $ | 107,629 | $ | 28,860 | $ | 7,434 | $ | 31,866 | $ | 5,857 | $ | (1,057) | $ | 180,589 | ||||||||||||||||||||||||||||||
As at December 31, 2022 |
||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||
Total general fund assets | $ | 107,407 | $ | 30,717 | $ | 11,576 | $ | 35,798 | $ | 13,135 | $ | (317) | $ | 198,316 | ||||||||||||||||||||||||||||||
Investments for account of segregated fund holders | $ | 109,058 | $ | 421 | $ | — | $ | 7,111 | $ | 8,702 | $ | — | $ | 125,292 | ||||||||||||||||||||||||||||||
Total general fund liabilities | $ | 99,632 | $ | 24,464 | $ | 9,477 | $ | 30,441 | $ | 11,732 | $ | (317) | $ | 175,429 |
Asset Management |
Corporate |
||||||||||||||||||||||
For the years ended December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
(restated, see Note 2) | (restated, see Note 2) |
||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
United States | $ | 5,438 | $ | 5,136 | $ | 92 | $ | 31 | |||||||||||||||
United Kingdom | 262 | 288 | 259 | (800) | |||||||||||||||||||
Canada | 327 | 304 | 57 | (10) | |||||||||||||||||||
Other countries | 113 | 45 | 130 | 101 | |||||||||||||||||||
Total revenue | $ | 6,140 | $ | 5,773 | $ | 538 | $ | (678) |
Asset Management |
Corporate |
||||||||||||||||||||||
As at December 31, |
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
(restated, see Note 2) |
(restated, see Note 2) |
||||||||||||||||||||||
Total general fund assets: | |||||||||||||||||||||||
United States | $ | 8,118 | $ | 9,822 | $ | 4,973 | $ | 1,644 | |||||||||||||||
United Kingdom | 935 | 940 | — | 4,722 | |||||||||||||||||||
Canada | 658 | 566 | 3,643 | 6,592 | |||||||||||||||||||
Other countries | 268 | 248 | 188 | 177 | |||||||||||||||||||
Total general fund assets | $ | 9,979 | $ | 11,576 | $ | 8,804 | $ | 13,135 | |||||||||||||||
Investment for account of segregated fund holders: | |||||||||||||||||||||||
United Kingdom | $ | — | $ | — | $ | — | $ | 8,702 | |||||||||||||||
Total investment for account of segregated fund holders | $ | — | $ | — | $ | — | $ | 8,702 |
5. Total Invested Assets and Related Net Investment Income |
As at | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||
Carrying value | Fair value | Carrying value | Fair value | |||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||
Cash, cash equivalents and short-term securities – FVTPL | $ | 13,173 | $ | 13,173 | $ | 11,219 | $ | 11,219 | ||||||||||||||||||
Debt securities – FVTPL(1) |
61,180 | 61,180 | 59,357 | 59,357 | ||||||||||||||||||||||
Debt securities – FVOCI | 14,313 | 14,313 | 16,545 | 16,545 | ||||||||||||||||||||||
Equity securities – FVTPL | 7,070 | 7,070 | 7,148 | 7,148 | ||||||||||||||||||||||
Equity securities – FVOCI | 68 | 68 | ||||||||||||||||||||||||
Mortgages and loans – FVTPL(2) |
50,552 | 50,552 | 47,208 | 47,208 | ||||||||||||||||||||||
Mortgages and loans – FVOCI | 1,948 | 1,948 | 1,804 | 1,804 | ||||||||||||||||||||||
Mortgages and loans – Amortized cost(3) |
2,100 | 2,006 | 2,241 | 2,106 | ||||||||||||||||||||||
Derivative assets – FVTPL | 2,183 | 2,183 | 2,095 | 2,095 | ||||||||||||||||||||||
Other financial invested assets (excluding CLOs) – FVTPL(4) |
6,883 | 6,883 | 6,538 | 6,538 | ||||||||||||||||||||||
Other financial invested assets (CLOs) – FVTPL(7) |
3,478 | 3,478 | 2,880 | 2,880 | ||||||||||||||||||||||
Total(5) |
$ | 162,948 | $ | 162,854 | $ | 157,035 | $ | 156,900 | ||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||
Investment contract liabilities – Amortized cost | $ | 11,672 | $ | 11,672 | $ | 10,728 | $ | 10,728 | ||||||||||||||||||
Obligations for securities borrowing – FVTPL | 223 | 223 | 73 | 73 | ||||||||||||||||||||||
Derivative liabilities – FVTPL | 1,311 | 1,311 | 2,351 | 2,351 | ||||||||||||||||||||||
Other financial liabilities – Amortized cost(6) |
2,449 | 2,348 | 1,996 | 1,852 | ||||||||||||||||||||||
Other financial liabilities (CLOs) – FVTPL(7) |
3,247 | 3,247 | 2,816 | 2,688 | ||||||||||||||||||||||
Total(8) |
$ | 18,902 | $ | 18,801 | $ | 17,964 | $ | 17,692 |
As at | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and short-term securities – FVTPL | $ | 12,316 | $ | 857 | $ | — | $ | 13,173 | $ | 10,622 | $ | 597 | $ | — | $ | 11,219 | ||||||||||||||||||||||||||||||||||
Debt securities – FVTPL | 564 | 60,214 | 402 | 61,180 | 650 | 58,313 | 394 | 59,357 | ||||||||||||||||||||||||||||||||||||||||||
Debt securities – FVOCI | 651 | 13,475 | 187 | 14,313 | 772 | 15,721 | 52 | 16,545 | ||||||||||||||||||||||||||||||||||||||||||
Equity securities – FVTPL | 4,220 | 2,737 | 113 | 7,070 | 4,133 | 2,844 | 171 | 7,148 | ||||||||||||||||||||||||||||||||||||||||||
Equity securities – FVOCI | — | — | 68 | 68 | ||||||||||||||||||||||||||||||||||||||||||||||
Mortgages and loans – FVTPL(1) |
— | 48,496 | 2,056 | 50,552 | — | 45,154 | 2,054 | 47,208 | ||||||||||||||||||||||||||||||||||||||||||
Mortgages and loans – FVOCI(1) |
— | 1,948 | — | 1,948 | — | 1,788 | 16 | 1,804 | ||||||||||||||||||||||||||||||||||||||||||
Derivative assets – FVTPL | 23 | 2,160 | — | 2,183 | 37 | 2,058 | — | 2,095 | ||||||||||||||||||||||||||||||||||||||||||
Other financial invested assets (excluding CLOs) – FVTPL(2) |
608 | 201 | 6,074 | 6,883 | 789 | 194 | 5,555 | 6,538 | ||||||||||||||||||||||||||||||||||||||||||
Other financial invested assets (CLOs) – FVTPL(3) |
— | 3,478 | — | 3,478 | — | 2,880 | — | 2,880 | ||||||||||||||||||||||||||||||||||||||||||
Investment properties – FVTPL | — | — | 9,723 | 9,723 | — | — | 10,102 | 10,102 | ||||||||||||||||||||||||||||||||||||||||||
Total invested assets measured at fair value | $ | 18,382 | $ | 133,566 | $ | 18,623 | $ | 170,571 | $ | 17,003 | $ | 129,549 | $ | 18,344 | $ | 164,896 | ||||||||||||||||||||||||||||||||||
Investments for account of segregated fund holders – FVTPL | 16,614 | 111,497 | 341 | 128,452 | 23,933 | 100,728 | 631 | 125,292 | ||||||||||||||||||||||||||||||||||||||||||
Total assets measured at fair value | $ | 34,996 | $ | 245,063 | $ | 18,964 | $ | 299,023 | $ | 40,936 | $ | 230,277 | $ | 18,975 | $ | 290,188 | ||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations for securities borrowing – FVTPL | $ | 3 | $ | 220 | $ | — | $ | 223 | $ | — | $ | 73 | $ | — | $ | 73 | ||||||||||||||||||||||||||||||||||
Derivative liabilities – FVTPL | 10 | 1,301 | — | 1,311 | 10 | 2,341 | — | 2,351 | ||||||||||||||||||||||||||||||||||||||||||
Investment contract liabilities for account of segregated fund holders – FVTPL | — | — | 109,411 | 109,411 | — | — | 102,153 | 102,153 | ||||||||||||||||||||||||||||||||||||||||||
Other financial liabilities (CLOs) – FVTPL(3) |
— | 3,247 | — | 3,247 | — | 2,688 | — | 2,688 | ||||||||||||||||||||||||||||||||||||||||||
Total liabilities measured at fair value | $ | 13 | $ | 4,768 | $ | 109,411 | $ | 114,192 | $ | 10 | $ | 5,102 | $ | 102,153 | $ | 107,265 |
As at | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
Canadian federal government | $ | — | $ | 5,147 | $ | 14 | $ | 5,161 | $ | — | $ | 3,684 | $ | 12 | $ | 3,696 | ||||||||||||||||||||||||||||||||||
Canadian provincial and municipal government | — | 13,694 | — | 13,694 | — | 12,612 | — | 12,612 | ||||||||||||||||||||||||||||||||||||||||||
U.S. government and agency | 564 | 148 | — | 712 | 650 | 109 | — | 759 | ||||||||||||||||||||||||||||||||||||||||||
Other foreign government | — | 3,329 | — | 3,329 | — | 3,755 | — | 3,755 | ||||||||||||||||||||||||||||||||||||||||||
Corporate | — | 31,809 | 340 | 32,149 | — | 32,566 | 296 | 32,862 | ||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 2,029 | 5 | 2,034 | — | 1,856 | 56 | 1,912 | ||||||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 2,335 | — | 2,335 | — | 2,323 | — | 2,323 | ||||||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations | — | 188 | — | 188 | — | 189 | — | 189 | ||||||||||||||||||||||||||||||||||||||||||
Other | — | 1,535 | 43 | 1,578 | — | 1,219 | 30 | 1,249 | ||||||||||||||||||||||||||||||||||||||||||
Total debt securities at FVTPL | $ | 564 | $ | 60,214 | $ | 402 | $ | 61,180 | $ | 650 | $ | 58,313 | $ | 394 | $ | 59,357 |
As at | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
Canadian federal government | $ | — | $ | 849 | $ | — | $ | 849 | $ | — | $ | 1,915 | $ | — | $ | 1,915 | ||||||||||||||||||||||||||||||||||
Canadian provincial and municipal government | — | 557 | — | 557 | — | 1,053 | — | 1,053 | ||||||||||||||||||||||||||||||||||||||||||
U.S. government and agency | 651 | 7 | — | 658 | 772 | 6 | — | 778 | ||||||||||||||||||||||||||||||||||||||||||
Other foreign government | — | 462 | 11 | 473 | — | 858 | 11 | 869 | ||||||||||||||||||||||||||||||||||||||||||
Corporate | — | 7,905 | 75 | 7,980 | — | 8,415 | 33 | 8,448 | ||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | — | 1,017 | — | 1,017 | — | 965 | — | 965 | ||||||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | — | 944 | — | 944 | — | 722 | — | 722 | ||||||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations | — | 767 | 13 | 780 | — | 857 | — | 857 | ||||||||||||||||||||||||||||||||||||||||||
Other | — | 967 | 88 | 1,055 | — | 930 | 8 | 938 | ||||||||||||||||||||||||||||||||||||||||||
Total debt securities at FVOCI | $ | 651 | $ | 13,475 | $ | 187 | $ | 14,313 | $ | 772 | $ | 15,721 | $ | 52 | $ | 16,545 |
As at | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
Mortgages: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Retail | $ | — | $ | 2,524 | $ | 12 | $ | 2,536 | $ | — | $ | 2,764 | $ | 15 | $ | 2,779 | ||||||||||||||||||||||||||||||||||
Office | — | 2,717 | — | 2,717 | — | 2,958 | — | 2,958 | ||||||||||||||||||||||||||||||||||||||||||
Multi-family residential | — | 2,986 | — | 2,986 | — | 2,915 | — | 2,915 | ||||||||||||||||||||||||||||||||||||||||||
Industrial | — | 2,804 | — | 2,804 | — | 2,482 | — | 2,482 | ||||||||||||||||||||||||||||||||||||||||||
Other | — | 1,017 | — | 1,017 | — | 818 | — | 818 | ||||||||||||||||||||||||||||||||||||||||||
Corporate loans | — | 36,448 | 2,044 | 38,492 | — | 33,217 | 2,039 | 35,256 | ||||||||||||||||||||||||||||||||||||||||||
Total mortgages and loans at FVTPL | $ | — | $ | 48,496 | $ | 2,056 | $ | 50,552 | $ | — | $ | 45,154 | $ | 2,054 | $ | 47,208 |
As at | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||||
Mortgages: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Retail |
$ | — | $ | 22 | $ | — | $ | 22 | $ | — | $ | 40 | $ | — | $ | 40 | ||||||||||||||||||||||||||||||||||
Office | — | 37 | — | 37 | — | 51 | — | 51 | ||||||||||||||||||||||||||||||||||||||||||
Multi-family residential | — | 83 | — | 83 | — | 197 | — | 197 | ||||||||||||||||||||||||||||||||||||||||||
Industrial | — | 149 | — | 149 | — | 178 | — | 178 | ||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | 62 | — | 62 | ||||||||||||||||||||||||||||||||||||||||||
Corporate loans | — | 1,657 | — | 1,657 | — | 1,260 | 16 | 1,276 | ||||||||||||||||||||||||||||||||||||||||||
Total mortgages and loans at FVOCI | $ | — | $ | 1,948 | $ | — | $ | 1,948 | $ | — | $ | 1,788 | $ | 16 | $ | 1,804 |
For the years ended |
Debt
securities at FVTPL
|
Debt securities at FVOCI |
Equity securities at FVTPL |
Equity Securities at FVOCI | Mortgages & loans at FVTPL |
Mortgages & loans at FVOCI |
Other financial invested assets at FVTPL | Investment properties at FVTPL |
Total invested assets measured at fair value |
Investments for account of segregated fund holders | Total assets measured at fair value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 394 | $ | 52 | $ | 101 | $ | 70 | $ | 2,054 | $ | 16 | $ | 5,555 | $ | 10,102 | $ | 18,344 | $ | 631 | $ | 18,975 | ||||||||||||||||||||||||||||||||||||||||||||||
Included in net income(1)(2)(3) |
9 | — | 13 | — | 119 | (8) | (169) | (520) | (556) | (15) | (571) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Included in OCI(2) |
— | 3 | — | — | — | 1 | — | — | 4 | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases / Issuances | 211 | 153 | 18 | — | 293 | 8 | 984 | 391 | 2,058 | 173 | 2,231 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales / Payments | (8) | (6) | (19) | (1) | (75) | (17) | (261) | (220) | (607) | (444) | (1,051) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (6) | (6) | — | — | (7) | — | — | — | (19) | (1) | (20) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3(4) |
8 | — | — | — | 382 | — | — | — | 390 | — | 390 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers (out) of Level 3(4) |
(200) | (8) | — | — | (710) | — | — | — | (918) | — | (918) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation(5) |
(6) | (1) | — | (1) | — | — | (35) | (30) | (73) | (3) | (76) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 402 | $ | 187 | $ | 113 | $ | 68 | $ | 2,056 | $ | — | $ | 6,074 | $ | 9,723 | $ | 18,623 | $ | 341 | $ | 18,964 | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) included in earnings relating to instruments still held(1) |
$ | 5 | $ | — | $ | 9 | $ | — | $ | 112 | $ | (8) | $ | (170) | $ | (522) | $ | (574) | $ | (18) | $ | (592) | ||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 152 | $ | 53 | $ | 170 | $ | 12,251 | $ | 17 | $ | 3,650 | $ | 9,109 | $ | 25,402 | $ | 611 | $ | 26,013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Included in net income(1)(2)(3) |
(23) | 1 | 5 | (3,086) | (15) | 334 | 625 | (2,159) | (32) | (2,191) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Included in OCI(2) |
— | (12) | — | — | — | — | — | (12) | — | (12) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases / Issuances | 310 | 86 | 7 | 1,782 | — | 1,843 | 664 | 4,692 | 78 | 4,770 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales / Payments | — | (2) | (16) | (506) | — | (313) | (430) | (1,267) | (6) | (1,273) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements | (1) | — | — | — | — | (47) | — | (48) | (1) | (49) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3(4) |
— | — | — | 25 | 14 | — | — | 39 | — | 39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers (out) of Level 3(4)(6) |
(49) | (74) | — | (8,572) | — | — | — | (8,695) | — | (8,695) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation(5) |
5 | — | 5 | 160 | — | 88 | 134 | 392 | (19) | 373 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 394 | $ | 52 | $ | 171 | $ | 2,054 | $ | 16 | $ | 5,555 | $ | 10,102 | $ | — | $ | 18,344 | $ | 631 | $ | 18,975 | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) included in earnings relating to instruments still held(1) |
$ | (23) | $ | — | $ | — | $ | (3,089) | $ | (15) | $ | 295 | $ | 612 | $ | (2,220) | $ | (20) | $ | (2,240) |
For the year ended December 31, 2023 |
Financial Instruments at Amortized Cost | Financial Instruments at FVOCI | Financial Instruments at FVTPL | Total |
||||||||||||||||||||||
Interest income (expense): | ||||||||||||||||||||||||||
Cash, cash equivalents and short-term investments | $ | 473 | $ | 473 | ||||||||||||||||||||||
Debt securities | 563 | 2,663 | 3,226 | |||||||||||||||||||||||
Mortgages and loans | 74 | 103 | 2,503 | 2,680 | ||||||||||||||||||||||
Derivative investments | 69 | 69 | ||||||||||||||||||||||||
Other financial invested assets | 1 | 247 | 248 | |||||||||||||||||||||||
Other financial liabilities | (154) | (217) | (371) | |||||||||||||||||||||||
Total interest income (expense) | (80) | 667 | 5,738 | 6,325 | ||||||||||||||||||||||
Dividend & other investment income: | ||||||||||||||||||||||||||
Equity securities | — | 212 | 212 | |||||||||||||||||||||||
Other financial invested assets | — | 226 | 226 | |||||||||||||||||||||||
Total dividend & other investment income | — | 438 | 438 | |||||||||||||||||||||||
Net realized and unrealized gains (losses): | ||||||||||||||||||||||||||
Cash, cash equivalents and short-term investments | — | — | ||||||||||||||||||||||||
Debt securities | 463 | 2,555 | 3,018 | |||||||||||||||||||||||
Equity securities | (1) | 397 | 396 | |||||||||||||||||||||||
Mortgages and loans | 40 | 1,573 | 1,613 | |||||||||||||||||||||||
Derivative investments | 933 | 933 | ||||||||||||||||||||||||
Other financial invested assets | 160 | (249) | (89) | |||||||||||||||||||||||
Other financial liabilities | 25 | 25 | ||||||||||||||||||||||||
Total net realized and unrealized gains (losses) | 662 | 5,234 | 5,896 | |||||||||||||||||||||||
Provision for credit losses | (2) | (12) | — | (14) | ||||||||||||||||||||||
Net investment income (loss) from financial instruments | $ | (82) | $ | 1,317 | $ | 11,410 | $ | 12,645 | ||||||||||||||||||
Net Investment income (loss) from non-financial instruments: | ||||||||||||||||||||||||||
Investment properties rental income | $ | 649 | ||||||||||||||||||||||||
Investment properties expenses | (270) | |||||||||||||||||||||||||
Investment expenses and taxes | (283) | |||||||||||||||||||||||||
Fair value changes on investment properties | (486) | |||||||||||||||||||||||||
Other investment income (loss) | 49 | |||||||||||||||||||||||||
Foreign exchange gains (losses) | (126) | |||||||||||||||||||||||||
Net investment income (loss) from non-financial instruments | $ | (467) | ||||||||||||||||||||||||
Total Net investment income (loss) | $ | 12,178 | ||||||||||||||||||||||||
Net investment income (loss) recognized in income | $ | 11,586 | ||||||||||||||||||||||||
Net investment income (loss) recognized in OCI | $ | 592 |
For the year ended December 31, 2022 | ||||||||
(restated, see Note 2) | ||||||||
Interest income: | ||||||||
Cash, cash equivalents and short-term securities |
$ | 166 | ||||||
Debt securities – FVTPL | 2,596 | |||||||
Debt securities – FVOCI | 341 | |||||||
Mortgages and loans | 2,234 | |||||||
Derivative investments | 115 | |||||||
Total interest income | 5,452 | |||||||
Equity securities |
244 | |||||||
Investment properties rental income(1) |
593 | |||||||
Investment properties expenses | (248) | |||||||
Other income | 218 | |||||||
Investment expenses and taxes | (257) | |||||||
Total interest and other investment income | $ | 6,002 |
For the year ended December 31, 2022 | ||||||||
(restated, see Note 2) | ||||||||
Fair value change: | ||||||||
Cash, cash equivalents and short-term securities | $ | 4 | ||||||
Debt securities | (15,846) | |||||||
Equity securities | (1,167) | |||||||
Mortgages and loans | (8,909) | |||||||
Derivative investments | (2,148) | |||||||
Other financial invested assets | 129 | |||||||
Other liabilities – obligations for securities borrowing | 15 | |||||||
Total change in fair value of assets and liabilities recognized in income | (27,922) | |||||||
Fair value changes on investment properties | 667 | |||||||
Foreign exchange gains (losses)(1) |
573 | |||||||
Realized gains (losses) on property and equipment(2) |
100 | |||||||
Fair value and foreign currency changes on assets and liabilities(3) |
$ | (26,582) |
For the year ended December 31, 2023 |
Insurance contracts Issued |
Reinsurance contracts held |
Total insurance | Non-insurance (all other) |
Total |
|||||||||||||||||||||||||||
Net investment income (loss): |
||||||||||||||||||||||||||||||||
Net investment income (loss) recognized in net income |
$ | 10,211 | $ | 1,375 | $ | 11,586 | ||||||||||||||||||||||||||
Net investment income (loss) recognized in OCI |
171 | 421 | 592 | |||||||||||||||||||||||||||||
Total net investment income (loss) |
10,382 | 1,796 | 12,178 | |||||||||||||||||||||||||||||
Total insurance finance income (expenses) recognized in net income: | ||||||||||||||||||||||||||||||||
Effect of time value of money (Interest on carrying value) including interest on policy loans and interest on amounts on deposit | (4,484) | 156 | (4,328) | (4,328) | ||||||||||||||||||||||||||||
Impact of change in discount rate on fulfilment cash flows excluding where measured at locked-in rates and effect of changes in financial risk | (1,985) | (91) | (2,076) | (2,076) | ||||||||||||||||||||||||||||
Application of risk mitigation option(1) |
104 | — | 104 | 104 | ||||||||||||||||||||||||||||
Changes in fair value of underlying items for contracts with direct participation features (excluding segregated funds)(2) |
(3,425) | — | (3,425) | (3,425) | ||||||||||||||||||||||||||||
Foreign exchange gains (losses) | (22) | (1) | (23) | (23) | ||||||||||||||||||||||||||||
Other | 137 | (5) | 132 | 132 | ||||||||||||||||||||||||||||
Total insurance finance income (expenses) recognized in income | (9,675) | 59 | (9,616) | (9,616) | ||||||||||||||||||||||||||||
Decrease (increase) in investment contract liabilities |
(331) | (331) | ||||||||||||||||||||||||||||||
Net investment result | $ | 766 | $ | 1,465 | $ | 2,231 | ||||||||||||||||||||||||||
Net investment result recognized in net income | $ | 595 | $ | 1,044 | $ | 1,639 | ||||||||||||||||||||||||||
Net investment result recognized in OCI | $ | 171 | $ | 421 | $ | 592 |
For the year ended December 31, 2022 |
Insurance contracts Issued | Reinsurance contracts held |
Total insurance | Non-insurance (all other) |
Total |
|||||||||||||||||||||||||||
Net investment income (loss) (restated, see Note 2): |
||||||||||||||||||||||||||||||||
Net investment income (loss) recognized in net income |
$ | (21,118) | $ | 538 | $ | (20,580) | ||||||||||||||||||||||||||
Net investment income (loss) recognized in OCI |
(481) | (1,449) | (1,930) | |||||||||||||||||||||||||||||
Total net investment income (loss) (restated, see Note 2) |
(21,599) | (911) | (22,510) | |||||||||||||||||||||||||||||
Total insurance finance income (expenses) recognized in net income: | ||||||||||||||||||||||||||||||||
Effect of time value of money (Interest on carrying value) including interest on policy loans and interest on amounts on deposit | (2,205) | 13 | (2,192) | (2,192) | ||||||||||||||||||||||||||||
Impact of change in discount rate on fulfilment cash flows excluding where measured at locked-in rates and effect of changes in financial risk | 18,618 | (455) | 18,163 | 18,163 | ||||||||||||||||||||||||||||
Application of risk mitigation option(1) |
688 | — | 688 | 688 | ||||||||||||||||||||||||||||
Changes in fair value of underlying items for contracts with direct participation features (excluding segregated funds)(2) |
5,487 | — | 5,487 | 5,487 | ||||||||||||||||||||||||||||
Foreign exchange gains (losses) | (2) | 7 | 5 | 5 | ||||||||||||||||||||||||||||
Other | 9 | (5) | 4 | 4 | ||||||||||||||||||||||||||||
Total insurance finance income (expenses) recognized in income | 22,595 | (440) | 22,155 | 22,155 | ||||||||||||||||||||||||||||
Decrease (increase) in investment contract liabilities |
(152) | (152) | ||||||||||||||||||||||||||||||
Net investment result | $ | 556 | $ | (1,063) | $ | (507) | ||||||||||||||||||||||||||
Net investment result recognized in net income | $ | 1,037 | $ | 386 | $ | 1,423 | ||||||||||||||||||||||||||
Net investment result recognized in OCI | $ | (481) | $ | (1,449) | $ | (1,930) |
As at December 31, | 2023 | 2022 | ||||||||||||
Cash | $ | 2,001 | $ | 3,068 | ||||||||||
Cash equivalents | 9,169 | 6,310 | ||||||||||||
Short-term securities | 2,003 | 1,841 | ||||||||||||
Cash, cash equivalents and short-term securities | 13,173 | 11,219 | ||||||||||||
Less: Bank overdraft, recorded in Other liabilities | — | 6 | ||||||||||||
Net cash, cash equivalents and short-term securities | $ | 13,173 | $ | 11,213 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||||
Designated in fair value hedges | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Designed in cash flow hedges | — | — | — | — | ||||||||||||||||||||||
Derivative investments | 418 | (667) | 704 | (1,138) | ||||||||||||||||||||||
Total interest rate derivatives | $ | 418 | $ | (667) | $ | 704 | $ | (1,138) | ||||||||||||||||||
Foreign exchange contracts: | ||||||||||||||||||||||||||
Designated in fair value hedges | $ | — | $ | — | $ | — | $ | (1) | ||||||||||||||||||
Designed in cash flow hedges | 2 | (19) | 9 | (20) | ||||||||||||||||||||||
Derivative investments | 1,674 | (614) | 1,291 | (1,182) | ||||||||||||||||||||||
Total foreign exchange derivatives | $ | 1,676 | $ | (633) | $ | 1,300 | $ | (1,203) | ||||||||||||||||||
Other contracts: | ||||||||||||||||||||||||||
Designated in fair value hedges | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Designed in cash flow hedges | 17 | — | 9 | — | ||||||||||||||||||||||
Derivative investments | 72 | (11) | 82 | (10) | ||||||||||||||||||||||
Total other contracts | $ | 89 | $ | (11) | $ | 91 | $ | (10) | ||||||||||||||||||
Total derivative contracts | $ | 2,183 | $ | (1,311) | $ | 2,095 | $ | (2,351) |
As at December 31, 2022 | |||||||||||||||||||||||||||||
Carrying amounts | Accumulated amount of fair value adjustments on the hedged item included in the carrying amount | ||||||||||||||||||||||||||||
Hedging risks | Hedged item | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||||
Interest rate risk | Fixed rate assets(1) |
$ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Foreign exchange risk | Fixed rate assets(1) |
$ | 37 | $ | — | $ | — | $ | — |
As at December 31, 2022 | ||||||||||||||||||||||||||
Hedging risks | Hedged item | Changes in value of the hedged item | Change in fair value of hedging instrument | Hedge ineffectiveness recognized in net investment income (loss) | ||||||||||||||||||||||
Interest rate risk | Fixed rate assets(1) |
$ | — | $ | — | $ | — | |||||||||||||||||||
Foreign exchange risk | Fixed rate assets(1) |
$ | (2) | $ | 3 | $ | 1 |
For the year ended December 31, | 2023 | 2022 | |||||||||||||||||||||||||||
Hedging risks | Hedged Item | Accumulated other comprehensive income from active hedges | Accumulated other comprehensive income from discontinued hedges | Accumulated other comprehensive income from active hedges | Accumulated other comprehensive income from discontinued hedges | ||||||||||||||||||||||||
Foreign exchange risk(1) |
Variable rate liabilities(2) |
$ | 9 | $ | — | $ | (6) | $ | — | ||||||||||||||||||||
Equity risk | Share-based payment(3) |
$ | (10) | $ | — | $ | (12) | $ | — |
Hedging risks | Hedged Item | Gains (losses) on hedged items for ineffectiveness measurement | Gain (losses) on hedging instruments for ineffectiveness measurement | Hedge ineffectiveness | Unrealized gains (losses) included in Other comprehensive income as the effective portion of the hedging instrument | Losses (gains) reclassified to Net interest income | |||||||||||||||||||||||||||||
For the year ended December 31, 2023 |
|||||||||||||||||||||||||||||||||||
Foreign exchange risk(1) |
Variable rate liabilities(2) |
$ | 18 | $ | (18) | $ | — | $ | (17) | $ | 37 | ||||||||||||||||||||||||
Equity risk | Share-based payment(3) |
$ | (6) | $ | 17 | $ | 11 | $ | 7 | $ | (3) | ||||||||||||||||||||||||
For the year ended December 31, 2022 |
|||||||||||||||||||||||||||||||||||
Foreign exchange risk(1) |
Variable rate liabilities(2) |
$ | 10 | $ | (10) | $ | — | $ | 44 | $ | (51) | ||||||||||||||||||||||||
Equity risk | Share-based payment(3) |
$ | (6) | $ | 7 | $ | 1 | $ | (8) | $ | (2) |
For the years ended December 31, | 2023 | 2022 | |||||||||||||||||||||||||||
Unrealized gains (losses) on cash flow hedges | Unrealized foreign currency translation gains (losses), net of hedging activities | Unrealized gains (losses) on cash flow hedges | Unrealized foreign currency translation gains (losses), net of hedging activities | ||||||||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||||||||
Balance, January 1 | $ | (18) | $ | 1,689 | (1) |
$ | (7) | $ | 953 | ||||||||||||||||||||
Effective portion of changes in fair value: | |||||||||||||||||||||||||||||
Foreign currency risk | (17) | (285) | 44 | 670 | |||||||||||||||||||||||||
Equity price risk | 7 | — | (8) | — | |||||||||||||||||||||||||
Net amount reclassified to income (loss): | |||||||||||||||||||||||||||||
Foreign currency risk | 37 | (49) | (51) | — | |||||||||||||||||||||||||
Equity price risk | (3) | — | (2) | — | |||||||||||||||||||||||||
Related tax | (7) | (5) | 6 | 7 | |||||||||||||||||||||||||
Balance, December 31 | $ | (1) | $ | 1,350 | $ | (18) | $ | 1,630 |
6. Financial Instrument Risk Management |
As at December 31, | 2023 | 2022 | ||||||||||||
Off-balance sheet item: | ||||||||||||||
Loan commitments(1) |
$ | 2,061 | $ | 2,217 | ||||||||||
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Financial
instruments
presented
in the
Consolidated
Statements
of Financial
Position(1)
|
Related amounts not set off in the Consolidated Statements of Financial Position |
Financial
instruments
presented
in the
Consolidated
Statements
of Financial
Position(1)
|
Related amounts not set off in the Consolidated Statements of Financial Position | |||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments subject to master netting or similar agreements | Financial collateral (received) pledged(2) |
Net amount | Financial instruments subject to master netting or similar agreements | Financial collateral (received) pledged(2) |
Net amount | |||||||||||||||||||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets (Note 6.A.v) |
$ | 2,183 | $ | (738) | $ | (1,316) | $ | 129 | $ | 2,095 | $ | (1,088) | $ | (923) | $ | 84 | ||||||||||||||||||||||||||||||||||
Reverse repurchase agreements (Note 8) |
28 | (28) | — | — | 14 | (14) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total financial assets | $ | 2,211 | $ | (766) | $ | (1,316) | $ | 129 | $ | 2,109 | $ | (1,102) | $ | (923) | $ | 84 | ||||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | (1,311) | $ | 738 | $ | 489 | $ | (84) | $ | (2,351) | $ | 1,088 | $ | 1,136 | $ | (127) | ||||||||||||||||||||||||||||||||||
Repurchase agreements (Note 5.F.ii) |
(2,705) | 28 | 2,677 | — | (2,725) | 14 | 2,711 | — | ||||||||||||||||||||||||||||||||||||||||||
Cash collateral on securities lent (Note 5.F.iii) |
(187) | — | 176 | (11) | (215) | — | 203 | (12) | ||||||||||||||||||||||||||||||||||||||||||
Obligations for securities borrowing | (223) | — | 223 | — | (73) | — | 73 | — | ||||||||||||||||||||||||||||||||||||||||||
Total financial liabilities | $ | (4,426) | $ | 766 | $ | 3,565 | $ | (95) | $ | (5,364) | $ | 1,102 | $ | 4,123 | $ | (139) |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||
FVTPL | FVOCI | Total debt securities | FVTPL | FVOCI | Total debt securities | |||||||||||||||||||||||||||||||||
Canada | $ | 30,180 | $ | 4,339 | $ | 34,519 | $ | 26,613 | $ | 6,064 | $ | 32,677 | ||||||||||||||||||||||||||
United States | 20,111 | 6,266 | 26,377 | 20,274 | 6,196 | 26,470 | ||||||||||||||||||||||||||||||||
United Kingdom | 1,224 | 517 | 1,741 | 2,760 | 737 | 3,497 | ||||||||||||||||||||||||||||||||
Other | 9,665 | 3,191 | 12,856 | 9,710 | 3,548 | 13,258 | ||||||||||||||||||||||||||||||||
Total debt securities | $ | 61,180 | $ | 14,313 | $ | 75,493 | $ | 59,357 | $ | 16,545 | $ | 75,902 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||
FVTPL | FVOCI | Total debt securities |
FVTPL | FVOCI | Total debt securities |
|||||||||||||||||||||||||||||||||
Debt securities issued or guaranteed by: | ||||||||||||||||||||||||||||||||||||||
Canadian federal government | $ | 5,161 | $ | 849 | $ | 6,010 | $ | 3,696 | $ | 1,915 | $ | 5,611 | ||||||||||||||||||||||||||
Canadian provincial and municipal government | 13,694 | 557 | 14,251 | 12,612 | 1,053 | 13,665 | ||||||||||||||||||||||||||||||||
U.S. government and agency | 712 | 658 | 1,370 | 759 | 778 | 1,537 | ||||||||||||||||||||||||||||||||
Other foreign government | 3,329 | 473 | 3,802 | 3,755 | 869 | 4,624 | ||||||||||||||||||||||||||||||||
Total government issued or guaranteed debt securities | 22,896 | 2,537 | 25,433 | 20,822 | 4,615 | 25,437 | ||||||||||||||||||||||||||||||||
Corporate debt securities by industry sector: | ||||||||||||||||||||||||||||||||||||||
Financials | 8,171 | 2,889 | 11,060 | 8,232 | 3,123 | 11,355 | ||||||||||||||||||||||||||||||||
Utilities | 6,244 | 815 | 7,059 | 5,884 | 792 | 6,676 | ||||||||||||||||||||||||||||||||
Industrials | 4,510 | 979 | 5,489 | 4,533 | 1,042 | 5,575 | ||||||||||||||||||||||||||||||||
Energy | 2,793 | 479 | 3,272 | 2,978 | 364 | 3,342 | ||||||||||||||||||||||||||||||||
Communication services | 2,727 | 422 | 3,149 | 2,861 | 468 | 3,329 | ||||||||||||||||||||||||||||||||
Real estate | 1,987 | 538 | 2,525 | 1,865 | 641 | 2,506 | ||||||||||||||||||||||||||||||||
Health care | 1,625 | 413 | 2,038 | 1,618 | 416 | 2,034 | ||||||||||||||||||||||||||||||||
Consumer staples | 1,490 | 315 | 1,805 | 1,634 | 344 | 1,978 | ||||||||||||||||||||||||||||||||
Consumer discretionary | 950 | 776 | 1,726 | 1,085 | 751 | 1,836 | ||||||||||||||||||||||||||||||||
Information technology | 730 | 174 | 904 | 1,095 | 289 | 1,384 | ||||||||||||||||||||||||||||||||
Materials | 922 | 180 | 1,102 | 1,077 | 218 | 1,295 | ||||||||||||||||||||||||||||||||
Total corporate debt securities | 32,149 | 7,980 | 40,129 | 32,862 | 8,448 | 41,310 | ||||||||||||||||||||||||||||||||
Asset-backed securities | 6,135 | 3,796 | 9,931 | 5,673 | 3,482 | 9,155 | ||||||||||||||||||||||||||||||||
Total debt securities | $ | 61,180 | $ | 14,313 | $ | 75,493 | $ | 59,357 | $ | 16,545 | $ | 75,902 |
As at December 31, 2023 |
Canada | United States | United Kingdom | Other | Total | |||||||||||||||||||||||||||
Mortgages: | ||||||||||||||||||||||||||||||||
Retail | $ | 1,376 | $ | 1,182 | $ | — | $ | — | $ | 2,558 | ||||||||||||||||||||||
Office | 1,500 | 1,254 | — | — | 2,754 | |||||||||||||||||||||||||||
Multi-family residential | 3,838 | 1,001 | — | — | 4,839 | |||||||||||||||||||||||||||
Industrial | 1,839 | 1,115 | — | — | 2,954 | |||||||||||||||||||||||||||
Other | 824 | 57 | 159 | — | 1,040 | |||||||||||||||||||||||||||
Total mortgages(1) |
$ | 9,377 | $ | 4,609 | $ | 159 | $ | — | $ | 14,145 | ||||||||||||||||||||||
Loans | $ | 12,924 | $ | 17,086 | $ | 4,089 | $ | 6,356 | $ | 40,455 | ||||||||||||||||||||||
Total mortgages and loans | $ | 22,301 | $ | 21,695 | $ | 4,248 | $ | 6,356 | $ | 54,600 |
As at December 31, 2022
(restated, see Note 2)
|
Canada | United States | United Kingdom | Other | Total | |||||||||||||||||||||||||||
Mortgages: | ||||||||||||||||||||||||||||||||
Retail | $ | 1,455 | $ | 1,364 | $ | — | $ | — | $ | 2,819 | ||||||||||||||||||||||
Office | 1,603 | 1,411 | — | — | 3,014 | |||||||||||||||||||||||||||
Multi-family residential | 3,869 | 1,145 | — | — | 5,014 | |||||||||||||||||||||||||||
Industrial | 1,669 | 996 | — | — | 2,665 | |||||||||||||||||||||||||||
Other | 767 | 113 | 29 | — | 909 | |||||||||||||||||||||||||||
Total mortgages(1) |
$ | 9,363 | $ | 5,029 | $ | 29 | $ | — | $ | 14,421 | ||||||||||||||||||||||
Loans | $ | 12,433 | $ | 15,468 | $ | 3,979 | $ | 4,952 | $ | 36,832 | ||||||||||||||||||||||
Total mortgages and loans | $ | 21,796 | $ | 20,497 | $ | 4,008 | $ | 4,952 | $ | 51,253 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||
FVTPL | FVOCI | Total debt securities | FVTPL | FVOCI | Total debt securities | |||||||||||||||||||||||||||||||||
Due in 1 year or less | $ | 1,697 | $ | 3,079 | $ | 4,776 | $ | 1,629 | $ | 2,131 | $ | 3,760 | ||||||||||||||||||||||||||
Due in years 2-5 | 8,763 | 6,272 | 15,035 | 8,983 | 7,908 | 16,891 | ||||||||||||||||||||||||||||||||
Due in years 6-10 | 9,513 | 2,199 | 11,712 | 9,488 | 3,370 | 12,858 | ||||||||||||||||||||||||||||||||
Due after 10 years | 41,207 | 2,763 | 43,970 | 39,257 | 3,136 | 42,393 | ||||||||||||||||||||||||||||||||
Total debt securities | $ | 61,180 | $ | 14,313 | $ | 75,493 | $ | 59,357 | $ | 16,545 | $ | 75,902 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
FVTPL | FVOCI | Amortized cost | Total | FVTPL | FVOCI | Amortized cost | Total | |||||||||||||||||||||||||||||||||||||||||||
Due in 1 year or less | $ | 852 | $ | 58 | $ | 171 | $ | 1,081 | $ | 1,009 | $ | 251 | $ | 78 | $ | 1,338 | ||||||||||||||||||||||||||||||||||
Due in years 2-5 | 5,605 | 222 | 1,129 | 6,956 | 4,631 | 266 | 1,152 | 6,049 | ||||||||||||||||||||||||||||||||||||||||||
Due in years 6-10 | 3,510 | 8 | 495 | 4,013 | 4,068 | 11 | 711 | 4,790 | ||||||||||||||||||||||||||||||||||||||||||
Due after 10 years | 2,093 | 3 | — | 2,096 | 2,244 | — | — | 2,244 | ||||||||||||||||||||||||||||||||||||||||||
Total mortgages | $ | 12,060 | $ | 291 | $ | 1,795 | $ | 14,146 | $ | 11,952 | $ | 528 | $ | 1,941 | $ | 14,421 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
FVTPL | FVOCI | Amortized cost | Total | FVTPL | FVOCI | Amortized cost | Total | |||||||||||||||||||||||||||||||||||||||||||
Due in 1 year or less | $ | 2,285 | $ | 257 | $ | 126 | $ | 2,668 | $ | 2,464 | $ | 178 | $ | 156 | $ | 2,798 | ||||||||||||||||||||||||||||||||||
Due in years 2-5 | 6,768 | 966 | 163 | 7,897 | 6,028 | 789 | 125 | 6,942 | ||||||||||||||||||||||||||||||||||||||||||
Due in years 6-10 | 9,177 | 401 | 27 | 9,605 | 7,797 | 288 | 19 | 8,104 | ||||||||||||||||||||||||||||||||||||||||||
Due after 10 years | 20,262 | 33 | — | 20,295 | 18,967 | 21 | — | 18,988 | ||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | 38,492 | $ | 1,657 | $ | 316 | $ | 40,465 | $ | 35,256 | $ | 1,276 | $ | 300 | $ | 36,832 |
Terms to maturity | ||||||||||||||||||||||||||
As at |
Notional Amount |
|||||||||||||||||||||||||
Under 1 Year | 1 to 5 Years | Over 5 Years | Total | |||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||
Derivative designated as hedging instrument: |
||||||||||||||||||||||||||
Interest rate contract / Interest rate risk(1) |
$ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Foreign exchange contracts / Currency risk(2) |
828 | 40 | — | 868 | ||||||||||||||||||||||
Equity price risk(3) |
54 | 114 | — | 168 | ||||||||||||||||||||||
Total designated as hedging instrument | 882 | 154 | — | 1,036 | ||||||||||||||||||||||
Derivative investments(4) |
27,534 | 11,125 | 30,726 | 69,385 | ||||||||||||||||||||||
Total derivatives |
$ | 28,416 | $ | 11,279 | $ | 30,726 | $ | 70,421 | ||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Derivative designated as hedging instrument: | ||||||||||||||||||||||||||
Interest rate contract / Interest rate risk(1) |
$ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Foreign exchange contracts / Currency risk(2) |
1,199 | — | — | 1,199 | ||||||||||||||||||||||
Equity price risk(3) |
52 | 100 | — | 152 | ||||||||||||||||||||||
Total designated as hedging instrument | 1,251 | 100 | — | 1,351 | ||||||||||||||||||||||
Derivative investments(4) |
26,598 | 10,195 | 31,624 | 68,417 | ||||||||||||||||||||||
Total derivatives | $ | 27,849 | $ | 10,295 | $ | 31,624 | $ | 69,768 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Term to maturity | Term to maturity | |||||||||||||||||||||||||||||||||||||||||||||||||
Under 1 Year |
1 to 5 Years |
Over 5 Years |
Total | Under 1 Year |
1 to 5 Years |
Over 5 Years |
Total | |||||||||||||||||||||||||||||||||||||||||||
Derivative assets | $ | 337 | $ | 266 | $ | 1,580 | $ | 2,183 | $ | 167 | $ | 351 | $ | 1,577 | $ | 2,095 | ||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | (115) | $ | (137) | $ | (1,059) | $ | (1,311) | $ | (379) | $ | (196) | $ | (1,776) | $ | (2,351) |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Gross positive
replacement
cost(2)
|
Impact of master netting
agreements(3)
|
Net
replacement
cost(4)
|
Gross positive
replacement
cost(2)
|
Impact of
master netting
agreements(3)
|
Net
replacement
cost(4)
|
|||||||||||||||||||||||||||||||||
Over-the-counter contracts: | ||||||||||||||||||||||||||||||||||||||
AA | $ | 472 | $ | (136) | $ | 336 | $ | 482 | $ | (254) | $ | 228 | ||||||||||||||||||||||||||
A | 1,686 | (603) | 1,083 | 1,560 | (834) | 726 | ||||||||||||||||||||||||||||||||
BBB | — | — | — | 15 | — | 15 | ||||||||||||||||||||||||||||||||
Total over-the-counter derivatives(1) |
$ | 2,158 | $ | (739) | $ | 1,419 | $ | 2,057 | $ | (1,088) | $ | 969 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||
Notional amount | Fair value | Notional amount | Fair value | |||||||||||||||||||||||
Single name credit default swap contracts: | ||||||||||||||||||||||||||
AA | $ | — | $ | — | $ | 20 | $ | — | ||||||||||||||||||
A | 491 | 5 | 587 | 4 | ||||||||||||||||||||||
BB | 540 | 15 | 706 | 5 | ||||||||||||||||||||||
BBB | — | — | 47 | 7 | ||||||||||||||||||||||
Total single name credit default swap contracts | $ | 1,031 | $ | 20 | $ | 1,360 | $ | 16 | ||||||||||||||||||
Total credit default swap contracts sold | $ | 1,031 | $ | 20 | $ | 1,360 | $ | 16 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gross exposure | Collateral | Net exposure | Gross exposure | Collateral | Net exposure | |||||||||||||||||||||||||||||||||||||||||||||
% |
% | |||||||||||||||||||||||||||||||||||||||||||||||||
AA or A | $ | 3,550 | $ | 7 | $ | 3,543 | 97 | $ | 3,600 | $ | 31 | $ | 3,569 | 98 | ||||||||||||||||||||||||||||||||||||
Below 'A' | 2,217 | 2,135 | 82 | 2 | 2,423 | 2,346 | 77 | 2 | ||||||||||||||||||||||||||||||||||||||||||
Not rated | 27 | 5 | 22 | 1 | 92 | 89 | 3 | — | ||||||||||||||||||||||||||||||||||||||||||
Total reinsurance contract held assets | $ | 5,794 | $ | 2,147 | $ | 3,647 | 100 | $ | 6,115 | $ | 2,466 | $ | 3,649 | 100 |
As at December 31, 2023 | Current quarter |
12 months(2) |
Remaining forecast period(2) |
||||||||||||||||||||||||||||||||||||||
Base case | Upside case | Downside case | Base case | Upside case | Downside case | ||||||||||||||||||||||||||||||||||||
U.S. |
|||||||||||||||||||||||||||||||||||||||||
Gross Domestic Product(1) |
$ | 22,538 | 1.3 | % | 3.5 | % | (2.4) | % | 2.2 | % | 2.4 | % | 2.5 | % | |||||||||||||||||||||||||||
Unemployment Rate | 3.8 | % | 4.0 | % | 3.1 | % | 6.7 | % | 4.0 | % | 3.3 | % | 6.7 | % | |||||||||||||||||||||||||||
BBB Bonds Spreads | 1.9 | % | 2.2 | % | 1.9 | % | 3.1 | % | 2.1 | % | 2.1 | % | 2.1 | % | |||||||||||||||||||||||||||
Canada | |||||||||||||||||||||||||||||||||||||||||
Gross Domestic Product(1) |
$ | 2,201 | 1.6 | % | 3.6 | % | (2.1) | % | 1.9 | % | 2.3 | % | 1.6 | % | |||||||||||||||||||||||||||
Unemployment Rate | 5.8 | % | 6.0 | % | 5.2 | % | 8.2 | % | 5.9 | % | 4.8 | % | 8.6 | % | |||||||||||||||||||||||||||
Oil Price | $ | 85.60 | $ | 82.10 | $ | 84.70 | $ | 65.60 | $ | 71.40 | $ | 71.80 | $ | 61.00 |
Performing | Impaired | Total | ||||||||||||||||||||||||
For the year ended December 31, 2023 |
Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||
Balance, beginning of year |
$ | 30 | $ | 2 | $ | — | $ | 32 | ||||||||||||||||||
Provision for credit losses: | ||||||||||||||||||||||||||
Transfer to stage 1 | — | — | — | — | ||||||||||||||||||||||
Transfer to stage 2 | — | — | — | — | ||||||||||||||||||||||
Transfer to stage 3 | — | — | — | — | ||||||||||||||||||||||
New originations or purchases | 9 | — | — | 9 | ||||||||||||||||||||||
Derecognition or maturities | (6) | — | — | (6) | ||||||||||||||||||||||
Net remeasurement(1) |
(3) | — | — | (3) | ||||||||||||||||||||||
Write-offs, net of recoveries, and other adjustments | — | — | — | — | ||||||||||||||||||||||
Balance, end of year |
$ | 30 | $ | 2 | $ | — | $ | 32 | ||||||||||||||||||
Mortgages and loans: | ||||||||||||||||||||||||||
Balance, beginning of year |
$ | 4 | $ | — | $ | 39 | $ | 43 | ||||||||||||||||||
Provision for credit losses: | ||||||||||||||||||||||||||
Transfer to stage 1 | — | — | — | — | ||||||||||||||||||||||
Transfer to stage 2 | — | — | — | — | ||||||||||||||||||||||
Transfer to stage 3 | — | — | — | — | ||||||||||||||||||||||
New originations or purchases | 5 | — | — | 5 | ||||||||||||||||||||||
Derecognition or maturities | — | — | — | — | ||||||||||||||||||||||
Net remeasurement(1) |
(1) | — | 10 | 9 | ||||||||||||||||||||||
Write-offs, net of recoveries, and other adjustments | — | — | — | — | ||||||||||||||||||||||
Balance, end of year |
$ | 8 | $ | — | $ | 49 | $ | 57 | ||||||||||||||||||
Mortgages | Loans | Total | ||||||||||||||||||
Balance, January 1, 2022 | $ | 80 | $ | 52 | $ | 132 | ||||||||||||||
Provision for (reversal of) losses | (2) | 57 | 55 | |||||||||||||||||
Foreign exchange rate movements | 2 | 3 | 5 | |||||||||||||||||
Balance, December 31, 2022 | $ | 80 | $ | 112 | $ | 192 |
Performing | Impaired | Total | |||||||||||||||||||||
As at December 31, 2023 | Stage 1 | Stage 2 | Stage 3 | ||||||||||||||||||||
Mortgages and loans at amortized cost: | |||||||||||||||||||||||
Investment grade | $ | 2,046 | $ | 25 | $ | — | $ | 2,071 | |||||||||||||||
Non-investment grade | — | 25 | — | 25 | |||||||||||||||||||
Impaired | — | — | 15 | 15 | |||||||||||||||||||
Total mortgages and loans at amortized cost | 2,046 | 50 | 15 | 2,111 | |||||||||||||||||||
Less: Total allowance for ECL | 1 | — | 10 | 11 | |||||||||||||||||||
Total mortgages and loans at amortized cost, net of total allowance for ECL | $ | 2,045 | $ | 50 | $ | 5 | $ | 2,100 | |||||||||||||||
Mortgages and loans at FVOCI: | |||||||||||||||||||||||
Investment grade | $ | 1,806 | $ | 12 | $ | — | $ | 1,818 | |||||||||||||||
Non-investment grade | 83 | 45 | — | 128 | |||||||||||||||||||
Impaired | — | — | 2 | 2 | |||||||||||||||||||
Total mortgages and loans at FVOCI | $ | 1,889 | $ | 57 | $ | 2 | $ | 1,948 | |||||||||||||||
Debt securities at FVOCI: | |||||||||||||||||||||||
Investment grade | $ | 13,834 | $ | 54 | $ | — | $ | 13,888 | |||||||||||||||
Non-investment grade | 389 | 36 | — | 425 | |||||||||||||||||||
Impaired | — | — | — | — | |||||||||||||||||||
Total debt securities at FVOCI | $ | 14,223 | $ | 90 | $ | — | $ | 14,313 | |||||||||||||||
As at December 31, 2022 |
Gross carrying value | Allowance for losses | ||||||||||||||||||||||||||||||||||||
Mortgages | Loans | Total | Mortgages | Loans | Total | |||||||||||||||||||||||||||||||||
Not past due | $ | 15,360 | $ | 40,868 | $ | 56,228 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||
Impaired | 80 | 145 | 225 | 80 | 112 | 192 | ||||||||||||||||||||||||||||||||
Total | $ | 15,440 | $ | 41,013 | $ | 56,453 | $ | 80 | $ | 112 | $ | 192 |
As at December 31, 2022
(restated, see Note 2)
|
FVTPL | FVOCI | Total debt securities |
|||||||||||||||||
Debt securities by credit rating: | ||||||||||||||||||||
AAA | $ | 9,440 | $ | 5,822 | $ | 15,262 | ||||||||||||||
AA | 9,267 | 2,043 | 11,310 | |||||||||||||||||
A | 23,050 | 4,646 | 27,696 | |||||||||||||||||
BBB | 17,007 | 3,661 | 20,668 | |||||||||||||||||
BB and lower | 593 | 373 | 966 | |||||||||||||||||
Total debt securities | $ | 59,357 | $ | 16,545 | $ | 75,902 |
As at December 31, 2022
(restated, see Note 2)
|
Insured | AAA | AA | A | BBB | BB and lower | Impaired | Total | ||||||||||||||||||||||||||||||||||||||||||
Mortgages by credit rating | $ | 4,035 | $ | — | $ | 1,665 | $ | 5,483 | $ | 2,686 | $ | 538 | $ | 14 | $ | 14,421 | ||||||||||||||||||||||||||||||||||
Loans by credit rating | n/a | $ | 285 | $ | 5,101 | $ | 15,257 | $ | 14,284 | $ | 1,872 | $ | 33 | $ | 36,832 |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||
FVTPL | FVOCI | Total equities | FVTPL | FVOCI | Total equities | |||||||||||||||||||||||||||||||||
Canada | $ | 3,081 | $ | — | $ | 3,081 | $ | 3,038 | $ | — | $ | 3,038 | ||||||||||||||||||||||||||
United States | 2,185 | 68 | 2,253 | 1,924 | — | 1,924 | ||||||||||||||||||||||||||||||||
United Kingdom | 105 | — | 105 | 154 | — | 154 | ||||||||||||||||||||||||||||||||
Other | 1,699 | — | 1,699 | 2,032 | — | 2,032 | ||||||||||||||||||||||||||||||||
Total equities | $ | 7,070 | $ | 68 | $ | 7,138 | $ | 7,148 | $ | — | $ | 7,148 |
As at | December 31, 2023 | December 31, 2022(4) |
||||||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Equity Markets(1)(2)(3) |
25% decrease | 10% decrease | 10% increase | 25% increase | 25% decrease |
10% decrease | 10% increase | 25% increase | ||||||||||||||||||||||||||||||||||||||||||
Potential impact on net income (after-tax) | $ | (400) | $ | (175) | $ | 175 | $ | 425 | $ | (300) | $ | (125) | $ | 125 | $ | 325 | ||||||||||||||||||||||||||||||||||
As at | December 31, 2023 | December 31, 2022(4) |
||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||
Change in Interest Rates(1)(2)(3) |
50 basis point decrease | 50 basis point increase | 50 basis point decrease | 50 basis point increase |
||||||||||||||||||||||
Potential impact on net income (after-tax) | $ | (25) | $ | 50 | $ | (100) | $ | 75 | ||||||||||||||||||
Potential impact on OCI | $ | 200 | $ | (200) | $ | 225 | $ | (225) | ||||||||||||||||||
As at | December 31, 2023 | December 31, 2022(3) |
||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||
Change in Credit Spreads(1)(2) |
50 basis point decrease | 50 basis point increase | 50 basis point decrease | 50 basis point increase |
||||||||||||||||||||||
Potential impact on net income (after-tax) | $ | 50 | $ | (50) | $ | 50 | $ | (50) | ||||||||||||||||||
Potential impact on OCI | $ | 200 | $ | (175) | $ | 200 | $ | (200) | ||||||||||||||||||
As at | December 31, 2023 | December 31, 2022(3) |
||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||
Change in Swap Spreads(1)(2) |
20 basis point decrease | 20 basis point increase | 20 basis point decrease | 20 basis point increase | ||||||||||||||||||||||
Potential impact on net income (after-tax) | $ | (25) | $ | 25 | $ | (25) | $ | 25 | ||||||||||||||||||
As at |
December 31, 2023 | December 31, 2022(2) |
||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||
Change in Real Estate Values(1) |
10% decrease | 10% increase | 10% decrease | 10% increase | ||||||||||||||||||||||
Potential impact on net income (after-tax) | $ | (475) | $ | 475 | $ | (500) | $ | 500 | ||||||||||||||||||
As at December 31, | 2023 |
2022 |
||||||||||||
Insurance contract liabilities: | ||||||||||||||
1 year or less(1) |
$ | 11,428 | $ | 11,980 | ||||||||||
1-2 years | 3,670 | 4,111 | ||||||||||||
2-3 years | 3,887 | 4,018 | ||||||||||||
3-4 years | 4,128 | 4,278 | ||||||||||||
4-5 years | 4,451 | 4,511 | ||||||||||||
Over 5 years | 556,052 | 469,366 | ||||||||||||
Total | $ | 583,616 | $ | 498,264 | ||||||||||
Insurance contract assets: | ||||||||||||||
1 year or less(1) |
$ | (463) | $ | (324) | ||||||||||
1-2 years | (323) | (341) | ||||||||||||
2-3 years | (276) | (287) | ||||||||||||
3-4 years | (248) | (254) | ||||||||||||
4-5 years | (225) | (234) | ||||||||||||
Over 5 years | (3,305) | (3,753) | ||||||||||||
Total | $ | (4,840) | $ | (5,193) | ||||||||||
Reinsurance contract held liabilities: | ||||||||||||||
1 year or less(1) |
$ | 140 | $ | 132 | ||||||||||
1-2 years | 83 | 80 | ||||||||||||
2-3 years | 88 | 86 | ||||||||||||
3-4 years | 91 | 89 | ||||||||||||
4-5 years | 95 | 94 | ||||||||||||
Over 5 years | 5,036 | 5,085 | ||||||||||||
Total | $ | 5,533 | $ | 5,566 | ||||||||||
Reinsurance contract held assets: | ||||||||||||||
1 year or less(1) |
$ | (520) | $ | (684) | ||||||||||
1-2 years | (54) | (20) | ||||||||||||
2-3 years | (69) | (31) | ||||||||||||
3-4 years | (105) | (66) | ||||||||||||
4-5 years | (130) | (104) | ||||||||||||
Over 5 years | (11,330) | (12,102) | ||||||||||||
Total | $ | (12,208) | $ | (13,007) |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Within
1 Year
|
1 Year to 3 Years |
3 Years to 5 Years |
Over 5 Years |
Total | Within 1 Year |
1 Year to 3 Years |
3 Years to 5 Years |
Over 5 Years |
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment contract liabilities(1) |
$ | 5,728 | $ | 2,518 | $ | 1,442 | $ | 1,727 | $ | 11,415 | $ | 5,581 | $ | 2,037 | $ | 1,421 | $ | 1,609 | $ | 10,648 | ||||||||||||||||||||||||||||||||||||||||||
Senior debentures and unsecured financing(2) |
2,347 | 28 | 28 | 533 | 2,936 | 2,353 | 28 | 28 | 548 | 2,957 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Subordinated debt(2) |
204 | 410 | 554 | 7,192 | 8,360 | 208 | 416 | 416 | 7,856 | 8,896 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Bond repurchase agreements | 2,705 | — | — | — | 2,705 | 2,725 | — | — | — | 2,725 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses | 8,665 | — | — | — | 8,665 | 8,080 | — | — | — | 8,080 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease liabilities(3) |
188 | 319 | 228 | 534 | 1,269 | 168 | 297 | 211 | 324 | 1,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Secured borrowings from mortgage securitization | 306 | 885 | 560 | 535 | 2,286 | 87 | 767 | 757 | 762 | 2,373 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowed funds(2) |
86 | 103 | 14 | 162 | 365 | 210 | 26 | 38 | 170 | 444 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit facilities(4) |
2,330 | — | — | — | 2,330 | 2,339 | — | — | — | 2,339 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | $ | 22,559 | $ | 4,263 | $ | 2,826 | $ | 10,683 | $ | 40,331 | $ | 21,751 | $ | 3,571 | $ | 2,871 | $ | 11,269 | $ | 39,462 | ||||||||||||||||||||||||||||||||||||||||||
Contractual commitments:(5) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contractual loans, equities and mortgages | $ | 39 | $ | 1,199 | $ | 915 | $ | 2,756 | $ | 4,909 | $ | 1,134 | $ | 1,202 | $ | 375 | $ | 2,359 | $ | 5,070 | ||||||||||||||||||||||||||||||||||||||||||
Total contractual commitments | $ | 39 | $ | 1,199 | $ | 915 | $ | 2,756 | $ | 4,909 | $ | 1,134 | $ | 1,202 | $ | 375 | $ | 2,359 | $ | 5,070 | ||||||||||||||||||||||||||||||||||||||||||
7. Insurance Risk Management |
As at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Potential impact on CSM (pre-tax) |
Potential impact on net income/equity (after-tax) |
Potential impact on CSM (pre-tax) |
Potential impact on net income/equity (after-tax) |
|||||||||||||||||||||||||||||||||||||||||||||||
Sensitivities(1) |
Insurance contracts issued | Net of reinsurance contracts held | Insurance contracts issued | Net of reinsurance contracts held | Insurance contracts issued | Net of reinsurance contracts held | Insurance contracts issued | Net of reinsurance contracts held | ||||||||||||||||||||||||||||||||||||||||||
Policyholder Behaviour (10% increase / decrease, where adverse) |
$ | (725) | $ | (950) | $ | 100 | $ | 100 | $ | (825) | $ | (850) | $ | 75 | $ | 75 | ||||||||||||||||||||||||||||||||||
Life Mortality rates (2% increase) |
$ | (425) | $ | (75) | $ | 25 | $ | (25) | $ | (450) | $ | (75) | $ | 50 | $ | (25) | ||||||||||||||||||||||||||||||||||
Annuity Mortality rates (2% decrease) |
$ | (175) | $ | (175) | $ | 25 | $ | — | $ | (175) | $ | (175) | $ | 25 | $ | 25 | ||||||||||||||||||||||||||||||||||
Morbidity rates (5% incidence increase and 5% termination decrease) |
$ | (225) | $ | (100) | $ | (200) | $ | (175) | $ | (200) | $ | (75) | $ | (175) | $ | (175) | ||||||||||||||||||||||||||||||||||
Expenses (5% increase) |
$ | (175) | $ | (175) | $ | — | $ | — | $ | (175) | $ | (175) | $ | — | $ | — |
8. Other Assets |
As at December 31, | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Accounts receivable | $ | 2,414 | $ | 2,396 | ||||||||||
Investment income due and accrued | 1,124 | 1,231 | ||||||||||||
Property and equipment | 666 | 607 | ||||||||||||
Right-of-use assets | 785 | 753 | ||||||||||||
Deferred acquisition costs(1) |
152 | 158 | ||||||||||||
Prepaid expenses | 1,136 | 1,089 | ||||||||||||
Accrued post-retirement benefit assets (Note 24) |
50 | 98 | ||||||||||||
Other | 135 | 110 | ||||||||||||
Total other assets | $ | 6,462 | $ | 6,442 |
9. Goodwill and Intangible Assets |
Canada | U.S. | Asia | Asset Management |
Corporate | Total | |||||||||||||||||||||||||||||||||
Balance, January 1, 2022 | $ | 2,607 | $ | 1,108 | $ | 659 | $ | 1,959 | $ | 184 | $ | 6,517 | ||||||||||||||||||||||||||
Acquisitions (Note 3) |
— | 2,030 | — | — | — | 2,030 | ||||||||||||||||||||||||||||||||
Impairment(1) |
— | — | — | — | (170) | (170) | ||||||||||||||||||||||||||||||||
Foreign exchange rate movements | — | 226 | 41 | 75 | (14) | 328 | ||||||||||||||||||||||||||||||||
Balance, December 31, 2022 |
$ | 2,607 | $ | 3,364 | $ | 700 | $ | 2,034 | $ | — | $ | 8,705 | ||||||||||||||||||||||||||
Acquisitions (Note 3) |
162 | 104 | — | 134 | — | 400 | ||||||||||||||||||||||||||||||||
Disposition | (21) | — | — | — | — | (21) | ||||||||||||||||||||||||||||||||
Foreign exchange rate movements | — | (79) | (16) | (20) | — | (115) | ||||||||||||||||||||||||||||||||
Balance, December 31, 2023 |
$ | 2,748 | $ | 3,389 | $ | 684 | $ | 2,148 | $ | — | $ | 8,969 |
As at December 31, | 2023 | 2022 | ||||||||||||
Canada | $ | 2,748 | $ | 2,607 | ||||||||||
U.S. | ||||||||||||||
Group Benefits | 1,106 | 1,132 | ||||||||||||
Dental | 2,283 | 2,232 | ||||||||||||
Asia | 684 | 700 | ||||||||||||
Asset Management | ||||||||||||||
MFS | 503 | 513 | ||||||||||||
SLC Management | 1,645 | 1,521 | ||||||||||||
Total | $ | 8,969 | $ | 8,705 |
Finite life | ||||||||||||||||||||||||||
Internally generated software |
Other | Indefinite life |
Total | |||||||||||||||||||||||
Gross carrying amount | ||||||||||||||||||||||||||
Balance, January 1, 2022 |
$ | 1,265 | $ | 2,367 | $ | 1,081 | $ | 4,713 | ||||||||||||||||||
Additions | 206 | 23 | — | 229 | ||||||||||||||||||||||
Acquisitions | 232 | 999 | — | 1,231 | ||||||||||||||||||||||
Disposals | (1) | — | — | (1) | ||||||||||||||||||||||
Foreign exchange rate movements | 59 | 153 | 36 | 248 | ||||||||||||||||||||||
Balance, December 31, 2022 |
$ | 1,761 | $ | 3,542 | $ | 1,117 | $ | 6,420 | ||||||||||||||||||
Additions | 126 | 261 | 46 | 433 | ||||||||||||||||||||||
Acquisitions | — | 368 | 67 | 435 | ||||||||||||||||||||||
Foreign exchange rate movements | (11) | (73) | (8) | (92) | ||||||||||||||||||||||
Balance, December 31, 2023 |
$ | 1,876 | $ | 4,098 | $ | 1,222 | $ | 7,196 | ||||||||||||||||||
Accumulated amortization and impairment losses | ||||||||||||||||||||||||||
Balance, January 1, 2022 |
$ | (615) | $ | (705) | $ | (23) | $ | (1,343) | ||||||||||||||||||
Amortization charge for the year | (113) | (174) | — | (287) | ||||||||||||||||||||||
Disposals | 1 | — | — | 1 | ||||||||||||||||||||||
Impairment of intangible assets | (16) | (2) | — | (18) | ||||||||||||||||||||||
Foreign exchange rate movements | (22) | (25) | (2) | (49) | ||||||||||||||||||||||
Balance, December 31, 2022 |
$ | (765) | $ | (906) | $ | (25) | $ | (1,696) | ||||||||||||||||||
Amortization charge for the year | (113) | (231) | — | (344) | ||||||||||||||||||||||
Impairment of intangible assets | — | — | (5) | (5) | ||||||||||||||||||||||
Foreign exchange rate movements | 6 | 15 | 2 | 23 | ||||||||||||||||||||||
Balance, December 31, 2023 |
$ | (872) | $ | (1,122) | $ | (28) | $ | (2,022) | ||||||||||||||||||
Net carrying amount, end of period: | ||||||||||||||||||||||||||
As at December 31, 2022 | $ | 996 | $ | 2,636 | $ | 1,092 | $ | 4,724 | ||||||||||||||||||
As at December 31, 2023 |
$ | 1,004 | $ | 2,976 | $ | 1,194 | $ | 5,174 |
As at December 31, | 2023 | 2022 | ||||||||||||
Finite life intangible assets: | ||||||||||||||
Distribution, sales potential of field force | $ | 258 | $ | 281 | ||||||||||
Client relationships and asset administration contracts | 2,718 | 2,355 | ||||||||||||
Internally generated software | 1,004 | 996 | ||||||||||||
Total finite life intangible assets | 3,980 | 3,632 | ||||||||||||
Indefinite life intangible assets: | ||||||||||||||
Fund management contracts(1) |
1,194 | 1,092 | ||||||||||||
Total indefinite life intangible assets | 1,194 | 1,092 | ||||||||||||
Total intangible assets | $ | 5,174 | $ | 4,724 |
10. Insurance Contracts |
As at December 31, 2023 | Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||||
Total contracts: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | 90 | $ | 94 | $ | — | $ | 184 | ||||||||||||||||||||||
Insurance contract liabilities(1) |
82,436 | 24,630 | 28,527 | 76 | 135,669 | |||||||||||||||||||||||||||
Net insurance contract liabilities | $ | 82,436 | $ | 24,540 | $ | 28,433 | $ | 76 | $ | 135,485 | ||||||||||||||||||||||
Reinsurance contract held assets | 1,557 | 4,083 | 154 | — | 5,794 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | 1,432 | — | 191 | — | 1,623 | |||||||||||||||||||||||||||
Net reinsurance contract held assets | $ | 125 | $ | 4,083 | $ | (37) | $ | — | $ | 4,171 | ||||||||||||||||||||||
Contracts measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Insurance contract liabilities | 12,446 | 4,791 | 27 | — | 17,264 | |||||||||||||||||||||||||||
Net insurance contract liabilities — PAA |
$ | 12,446 | $ | 4,791 | $ | 27 | $ | — | $ | 17,264 | ||||||||||||||||||||||
Reinsurance contract held assets | 152 | 185 | 4 | — | 341 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | — | — | — | — | — | |||||||||||||||||||||||||||
Net reinsurance contract held assets — PAA |
$ | 152 | $ | 185 | $ | 4 | $ | — | $ | 341 | ||||||||||||||||||||||
Contracts not measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | 90 | $ | 94 | $ | — | $ | 184 | ||||||||||||||||||||||
Insurance contract liabilities(1) |
69,990 | 19,839 | 28,500 | 76 | 118,405 | |||||||||||||||||||||||||||
Net insurance contract liabilities — non-PAA |
$ | 69,990 | $ | 19,749 | $ | 28,406 | $ | 76 | $ | 118,221 | ||||||||||||||||||||||
Reinsurance contract held assets | 1,405 | 3,898 | 150 | — | 5,453 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | 1,432 | — | 191 | — | 1,623 | |||||||||||||||||||||||||||
Net reinsurance contract held assets — non-PAA |
$ | (27) | $ | 3,898 | $ | (41) | $ | — | $ | 3,830 |
As at December 31, 2022 | Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||||
Total contracts: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | — | $ | 75 | $ | — | $ | 75 | ||||||||||||||||||||||
Insurance contract liabilities(1) |
74,435 | 25,158 | 27,437 | 4,264 | 131,294 | |||||||||||||||||||||||||||
Net insurance contract liabilities | $ | 74,435 | $ | 25,158 | $ | 27,362 | $ | 4,264 | $ | 131,219 | ||||||||||||||||||||||
Reinsurance contract held assets | 1,504 | 4,104 | 441 | 66 | 6,115 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | 1,369 | — | 234 | — | 1,603 | |||||||||||||||||||||||||||
Net reinsurance contract held assets | $ | 135 | $ | 4,104 | $ | 207 | $ | 66 | $ | 4,512 | ||||||||||||||||||||||
Contracts measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Insurance contract liabilities | 11,780 | 5,067 | 76 | — | 16,923 | |||||||||||||||||||||||||||
Net insurance contract liabilities — PAA |
$ | 11,780 | $ | 5,067 | $ | 76 | $ | — | $ | 16,923 | ||||||||||||||||||||||
Reinsurance contract held assets | 218 | 222 | 1 | — | 441 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | 41 | — | — | — | 41 | |||||||||||||||||||||||||||
Net reinsurance contract held assets — PAA |
$ | 177 | $ | 222 | $ | 1 | $ | — | $ | 400 | ||||||||||||||||||||||
Contracts not measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | — | $ | 75 | $ | — | $ | 75 | ||||||||||||||||||||||
Insurance contract liabilities(1) |
62,655 | 20,091 | 27,361 | 4,264 | 114,371 | |||||||||||||||||||||||||||
Net insurance contract liabilities — non-PAA |
$ | 62,655 | $ | 20,091 | $ | 27,286 | $ | 4,264 | $ | 114,296 | ||||||||||||||||||||||
Reinsurance contract held assets | 1,286 | 3,882 | 440 | 66 | 5,674 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | 1,328 | — | 234 | — | 1,562 | |||||||||||||||||||||||||||
Net reinsurance contract held assets — non-PAA |
$ | (42) | $ | 3,882 | $ | 206 | $ | 66 | $ | 4,112 |
As at January 1, 2022 | Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||||
Total contracts: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | 20 | $ | 142 | $ | — | $ | 162 | ||||||||||||||||||||||
Insurance contract liabilities(1) |
84,283 | 28,846 | 30,045 | 6,238 | 149,412 | |||||||||||||||||||||||||||
Net insurance contract liabilities | $ | 84,283 | $ | 28,826 | $ | 29,903 | $ | 6,238 | $ | 149,250 | ||||||||||||||||||||||
Reinsurance contract held assets | 1,864 | 4,549 | 128 | 71 | 6,612 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | 1,751 | 37 | 201 | 5 | 1,994 | |||||||||||||||||||||||||||
Net reinsurance contract held assets | $ | 113 | $ | 4,512 | $ | (73) | $ | 66 | $ | 4,618 | ||||||||||||||||||||||
Contracts measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Insurance contract liabilities | 12,472 | 4,846 | 77 | — | 17,395 | |||||||||||||||||||||||||||
Net insurance contract liabilities — PAA |
$ | 12,472 | $ | 4,846 | $ | 77 | $ | — | $ | 17,395 | ||||||||||||||||||||||
Reinsurance contract held assets | 196 | 240 | 1 | — | 437 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | — | — | — | — | — | |||||||||||||||||||||||||||
Net reinsurance contract held assets — PAA |
$ | 196 | $ | 240 | $ | 1 | $ | — | $ | 437 | ||||||||||||||||||||||
Contracts not measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | — | $ | 20 | $ | 142 | $ | — | $ | 162 | ||||||||||||||||||||||
Insurance contract liabilities(1) |
71,811 | 24,000 | 29,968 | 6,238 | 132,017 | |||||||||||||||||||||||||||
Net insurance contract liabilities — non-PAA |
$ | 71,811 | $ | 23,980 | $ | 29,826 | $ | 6,238 | $ | 131,855 | ||||||||||||||||||||||
Reinsurance contract held assets | 1,668 | 4,309 | 127 | 71 | 6,175 | |||||||||||||||||||||||||||
Reinsurance contract held liabilities | 1,751 | 37 | 201 | 5 | 1,994 | |||||||||||||||||||||||||||
Net reinsurance contract held assets — non-PAA |
$ | (83) | $ | 4,272 | $ | (74) | $ | 66 | $ | 4,181 |
As at | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||
1 year | 5 years | 10 years | 30 years | Ultimate | 1 year | 5 years | 10 years | 30 years | Ultimate | |||||||||||||||||||||||||||||
Canada | CAD | 5.51% | 4.67% | 4.59% | 4.46% | 4.95% | 5.36% | 5.00% | 5.02% | 4.80% | 4.65% | |||||||||||||||||||||||||||
U.S. | USD | 5.84% | 5.12% | 5.04% | 5.05% | 4.95% | 6.06% | 5.83% | 5.47% | 5.33% | 4.65% | |||||||||||||||||||||||||||
Asia | USD | 5.89% | 5.06% | 5.37% | 5.48% | 4.95% | 5.88% | 5.61% | 6.35% | 5.38% | 4.65% |
For the years ended and as at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||
Estimates of PV of future cash flows | Risk adjustment | CSM | Total | Estimates of PV of future cash flows | Risk adjustment | CSM | Total | |||||||||||||||||||||||||
Insurance contracts — non-PAA, beginning of year: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | (195) | $ | 51 | $ | 69 | $ | (75) | $ | (426) | $ | 163 | $ | 101 | $ | (162) | ||||||||||||||||
Insurance contract liabilities | 96,623 | 6,847 | 10,901 | 114,371 | 113,634 | 8,580 | 9,803 | 132,017 | ||||||||||||||||||||||||
Net balances, beginning of year | $ | 96,428 | $ | 6,898 | $ | 10,970 | $ | 114,296 | $ | 113,208 | $ | 8,743 | $ | 9,904 | $ | 131,855 | ||||||||||||||||
Changes related to current service: |
||||||||||||||||||||||||||||||||
CSM recognized for services provided | (923) | (923) | (871) | (871) | ||||||||||||||||||||||||||||
Risk adjustment recognized for non-financial risk expired | (545) | (545) | (493) | (493) | ||||||||||||||||||||||||||||
Income taxes specifically chargeable to the policyholder | (5) | — | (5) | 71 | — | 71 | ||||||||||||||||||||||||||
Experience adjustments | 169 | 169 | 229 | 229 | ||||||||||||||||||||||||||||
Total changes related to current service |
164 | (545) | (923) | (1,304) | 300 | (493) | (871) | (1,064) | ||||||||||||||||||||||||
Changes related to future service: | ||||||||||||||||||||||||||||||||
Changes in estimates that adjust CSM(1) |
(1,206) | 292 | 914 | — | (920) | (213) | 1,133 | — | ||||||||||||||||||||||||
Changes in estimates that do not adjust CSM (losses on onerous groups and reversals of such losses) | 33 | 9 | 42 | 55 | 2 | 57 | ||||||||||||||||||||||||||
Contracts initially recognized in the year | (1,702) | 513 | 1,259 | 70 | (1,259) | 456 | 894 | 91 | ||||||||||||||||||||||||
Total changes related to future service |
(2,875) | 814 | 2,173 | 112 | (2,124) | 245 | 2,027 | 148 | ||||||||||||||||||||||||
Changes related to past service — Adjustments to FCF for incurred claims |
(39) | (12) | (51) | (25) | (2) | (27) | ||||||||||||||||||||||||||
Insurance service result | (2,750) | 257 | 1,250 | (1,243) | (1,849) | (250) | 1,156 | (943) | ||||||||||||||||||||||||
Insurance finance (income) expenses from insurance contracts issued | 8,131 | 525 | (8) | 8,648 | (19,140) | (1,694) | (347) | (21,181) | ||||||||||||||||||||||||
Total changes recognized in income |
5,381 | 782 | 1,242 | 7,405 | (20,989) | (1,944) | 809 | (22,124) | ||||||||||||||||||||||||
Foreign currency translation | (898) | (54) | (106) | (1,058) | 2,737 | 99 | 257 | 3,093 | ||||||||||||||||||||||||
Total changes recognized in income and OCI |
4,483 | 728 | 1,136 | 6,347 | (18,252) | (1,845) | 1,066 | (19,031) | ||||||||||||||||||||||||
Cash flows: |
||||||||||||||||||||||||||||||||
Premiums received | 14,798 | 14,798 | 12,610 | 12,610 | ||||||||||||||||||||||||||||
Amounts paid to policyholders and other insurance service expenses paid | (11,809) | (11,809) | (9,499) | (9,499) | ||||||||||||||||||||||||||||
Insurance acquisition cash flows | (2,034) | (2,034) | (1,572) | (1,572) | ||||||||||||||||||||||||||||
Fees received from segregated funds | 422 | 422 | 451 | 451 | ||||||||||||||||||||||||||||
Other | 393 | 393 | (518) | (518) | ||||||||||||||||||||||||||||
Total cash flows |
1,770 | 1,770 | 1,472 | 1,472 | ||||||||||||||||||||||||||||
Dispositions (Note 3) | (3,885) | (92) | (261) | (4,238) | — | — | — | — | ||||||||||||||||||||||||
Contracts modified |
46 | — | — | 46 | — | — | — | — | ||||||||||||||||||||||||
Net balances, end of year | $ | 98,842 | $ | 7,534 | $ | 11,845 | $ | 118,221 | $ | 96,428 | $ | 6,898 | $ | 10,970 | $ | 114,296 | ||||||||||||||||
Insurance contracts — non-PAA, end of year: | ||||||||||||||||||||||||||||||||
Insurance contract assets | $ | (578) | $ | 146 | $ | 248 | $ | (184) | $ | (195) | $ | 51 | $ | 69 | $ | (75) | ||||||||||||||||
Insurance contract liabilities | 99,420 | 7,388 | 11,597 | 118,405 | 96,623 | 6,847 | 10,901 | 114,371 | ||||||||||||||||||||||||
Net balances, end of year | $ | 98,842 | $ | 7,534 | $ | 11,845 | $ | 118,221 | $ | 96,428 | $ | 6,898 | $ | 10,970 | $ | 114,296 |
Liability for remaining coverage | Liability for incurred claims | |||||||||||||||||||||||||||||||||||||
Contracts using PAA | ||||||||||||||||||||||||||||||||||||||
For the year ended and as at December 31, 2023 |
Excluding loss component | Loss component | Contracts not using PAA | Estimates of PV of future cash flows | Risk Adjustment | Total | ||||||||||||||||||||||||||||||||
Insurance contract assets, beginning of year | $ | (118) | $ | 19 | $ | 24 | $ | — | $ | — | $ | (75) | ||||||||||||||||||||||||||
Insurance contract liabilities, beginning of year | 113,237 | 185 | 1,803 | 15,233 | 836 | 131,294 | ||||||||||||||||||||||||||||||||
Net balances, beginning of year | $ | 113,119 | $ | 204 | $ | 1,827 | $ | 15,233 | $ | 836 | $ | 131,219 | ||||||||||||||||||||||||||
Insurance revenue | (21,356) | (21,356) | ||||||||||||||||||||||||||||||||||||
Insurance service expenses: | ||||||||||||||||||||||||||||||||||||||
Incurred claims and other expenses | 23 | 4,919 | 11,806 | 105 | 16,853 | |||||||||||||||||||||||||||||||||
Amortization of insurance acquisition cash flows | 202 | 202 | ||||||||||||||||||||||||||||||||||||
Changes related to future service (losses on onerous groups and reversals of such losses) | 126 | 126 | ||||||||||||||||||||||||||||||||||||
Changes related to past service (changes in FCF related to liability for incurred claims) | (51) | 309 | (163) | 95 | ||||||||||||||||||||||||||||||||||
Total insurance service expenses | 202 | 149 | 4,868 | 12,115 | (58) | 17,276 | ||||||||||||||||||||||||||||||||
Insurance service result | (21,154) | 149 | 4,868 | 12,115 | (58) | (4,080) | ||||||||||||||||||||||||||||||||
Insurance finance (income) expenses | 8,652 | 7 | (31) | 994 | 53 | 9,675 | ||||||||||||||||||||||||||||||||
Total changes recognized in income | (12,502) | 156 | 4,837 | 13,109 | (5) | 5,595 | ||||||||||||||||||||||||||||||||
Foreign currency translation | (1,071) | (2) | 43 | (161) | (3) | (1,194) | ||||||||||||||||||||||||||||||||
Total changes recognized in income and OCI | (13,573) | 154 | 4,880 | 12,948 | (8) | 4,401 | ||||||||||||||||||||||||||||||||
Cash flows: | ||||||||||||||||||||||||||||||||||||||
Premiums received | 31,876 | 31,876 | ||||||||||||||||||||||||||||||||||||
Amounts paid to policyholders and other insurance service expenses paid | — | (11,878) | (14,078) | — | (25,956) | |||||||||||||||||||||||||||||||||
Insurance acquisition cash flows | (2,061) | — | — | — | (2,061) | |||||||||||||||||||||||||||||||||
Fees received from segregated funds | 422 | — | — | — | 422 | |||||||||||||||||||||||||||||||||
Other | 794 | (428) | 27 | — | 393 | |||||||||||||||||||||||||||||||||
Total cash flows | 31,031 | (12,306) | (14,051) | — | 4,674 | |||||||||||||||||||||||||||||||||
Investment component excluded from insurance revenue and insurance service expense: | ||||||||||||||||||||||||||||||||||||||
Expected/incurred claims | (6,959) | 7,164 | 2,279 | — | 2,484 | |||||||||||||||||||||||||||||||||
Experience adjustment | (2,484) | — | — | — | (2,484) | |||||||||||||||||||||||||||||||||
Total investment component excluded from insurance revenue and insurance service expense | (9,443) | 7,164 | 2,279 | — | — | |||||||||||||||||||||||||||||||||
Dispositions (Note 3) | (1,178) | (3,070) | (561) | — | (4,809) | |||||||||||||||||||||||||||||||||
Net balances, end of year | $ | 119,956 | $ | 358 | $ | (1,505) | $ | 15,848 | $ | 828 | $ | 135,485 | ||||||||||||||||||||||||||
Insurance contract assets, end of year | $ | 2,516 | $ | — | $ | (2,700) | $ | — | $ | — | $ | (184) | ||||||||||||||||||||||||||
Insurance contract liabilities, end of year | 117,440 | 358 | 1,195 | 15,848 | 828 | 135,669 | ||||||||||||||||||||||||||||||||
Net balances, end of year | $ | 119,956 | $ | 358 | $ | (1,505) | $ | 15,848 | $ | 828 | $ | 135,485 |
Liability for remaining coverage | Liability for incurred claims | |||||||||||||||||||||||||||||||||||||
Contracts using PAA | ||||||||||||||||||||||||||||||||||||||
For the year ended and as at December 31, 2022 |
Excluding loss component | Loss component | Contracts not using PAA | Estimates of PV of future cash flows | Risk Adjustment | Total | ||||||||||||||||||||||||||||||||
Insurance contract assets, beginning of year | $ | (242) | $ | — | $ | 80 | $ | — | $ | — | $ | (162) | ||||||||||||||||||||||||||
Insurance contract liabilities, beginning of year |
131,474 | 47 | 1,342 | 15,658 | 891 | 149,412 | ||||||||||||||||||||||||||||||||
Net balances, beginning of year | $ | 131,232 | $ | 47 | $ | 1,422 | $ | 15,658 | $ | 891 | $ | 149,250 | ||||||||||||||||||||||||||
Insurance revenue | (18,902) | (18,902) | ||||||||||||||||||||||||||||||||||||
Insurance service expenses: | ||||||||||||||||||||||||||||||||||||||
Incurred claims and other expenses | (3) | 4,925 | 9,931 | 270 | 15,123 | |||||||||||||||||||||||||||||||||
Amortization of insurance acquisition cash flows | 56 | 56 | ||||||||||||||||||||||||||||||||||||
Changes related to future service (losses on onerous groups and reversals of such losses) | 153 | 153 | ||||||||||||||||||||||||||||||||||||
Changes related to past service (changes in FCF related to liability for incurred claims) | (29) | 267 | (221) | 17 | ||||||||||||||||||||||||||||||||||
Total insurance service expenses | 56 | 150 | 4,896 | 10,198 | 49 | 15,349 | ||||||||||||||||||||||||||||||||
Insurance service result | (18,846) | 150 | 4,896 | 10,198 | 49 | (3,553) | ||||||||||||||||||||||||||||||||
Insurance finance (income) expenses | (21,257) | 4 | 86 | (1,325) | (103) | (22,595) | ||||||||||||||||||||||||||||||||
Total changes recognized in income | (40,103) | 154 | 4,982 | 8,873 | (54) | (26,148) | ||||||||||||||||||||||||||||||||
Foreign currency translation | 2,636 | 3 | 198 | 494 | (1) | 3,330 | ||||||||||||||||||||||||||||||||
Total changes recognized in income and OCI | (37,467) | 157 | 5,180 | 9,367 | (55) | (22,818) | ||||||||||||||||||||||||||||||||
Cash flows: | ||||||||||||||||||||||||||||||||||||||
Premiums received(1) |
27,655 | 27,655 | ||||||||||||||||||||||||||||||||||||
Amounts paid to policyholders and other insurance service expenses paid(1) |
— | (9,419) | (12,136) | — | (21,555) | |||||||||||||||||||||||||||||||||
Insurance acquisition cash flows | (1,552) | — | — | — | (1,552) | |||||||||||||||||||||||||||||||||
Fees received from segregated funds | 451 | — | — | — | 451 | |||||||||||||||||||||||||||||||||
Other | 139 | (638) | (58) | — | (557) | |||||||||||||||||||||||||||||||||
Total cash flows(1) |
26,693 | (10,057) | (12,194) | — | 4,442 | |||||||||||||||||||||||||||||||||
Investment component excluded from insurance revenue and insurance service expense: | ||||||||||||||||||||||||||||||||||||||
Expected/incurred claims | (6,837) | 5,282 | 2,062 | — | 507 | |||||||||||||||||||||||||||||||||
Experience adjustment | (507) | — | — | — | (507) | |||||||||||||||||||||||||||||||||
Total investment component excluded from insurance revenue and insurance service expense | (7,344) | 5,282 | 2,062 | — | — | |||||||||||||||||||||||||||||||||
Acquisitions (Note 3) | 5 | — | 340 | — | 345 | |||||||||||||||||||||||||||||||||
Net balances, end of period(1) |
$ | 113,119 | $ | 204 | $ | 1,827 | $ | 15,233 | $ | 836 | $ | 131,219 | ||||||||||||||||||||||||||
Insurance contract assets, end of year | $ | (118) | $ | 19 | $ | 24 | $ | — | $ | — | $ | (75) | ||||||||||||||||||||||||||
Insurance contract liabilities, end of year |
113,237 | 185 | 1,803 | 15,233 | 836 | 131,294 | ||||||||||||||||||||||||||||||||
Net balances, end of year | $ | 113,119 | $ | 204 | $ | 1,827 | $ | 15,233 | $ | 836 | $ | 131,219 |
For the years ended and as at December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||
Estimates of PV of future cash flows | Risk adjustment | CSM | Total | Estimates of PV of future cash flows | Risk adjustment | CSM | Total | |||||||||||||||||||||||||
Reinsurance contracts — non-PAA, beginning of year: | ||||||||||||||||||||||||||||||||
Reinsurance contract assets | $ | 4,061 | $ | 1,450 | $ | 163 | $ | 5,674 | $ | 4,412 | $ | 1,606 | $ | 157 | $ | 6,175 | ||||||||||||||||
Reinsurance contract liabilities | (2,275) | 771 | (58) | (1,562) | (3,037) | 1,093 | (50) | (1,994) | ||||||||||||||||||||||||
Net balances, beginning of year | $ | 1,786 | $ | 2,221 | $ | 105 | $ | 4,112 | $ | 1,375 | $ | 2,699 | $ | 107 | $ | 4,181 | ||||||||||||||||
Changes related to current service: | ||||||||||||||||||||||||||||||||
CSM recognized for services received | (4) | (4) | (10) | (10) | ||||||||||||||||||||||||||||
Risk adjustment recognized for non-financial risk expired | (148) | (148) | (131) | (131) | ||||||||||||||||||||||||||||
Experience adjustments | 137 | 137 | (105) | (105) | ||||||||||||||||||||||||||||
Total changes related to current service | 137 | (148) | (4) | (15) | (105) | (131) | (10) | (246) | ||||||||||||||||||||||||
Changes related to future service: | ||||||||||||||||||||||||||||||||
Changes in estimates that adjust CSM | 68 | (52) | (16) | — | (203) | 147 | 56 | — | ||||||||||||||||||||||||
Loss recoveries at initial recognition of onerous underlying contracts | 35 | 35 | 23 | 23 | ||||||||||||||||||||||||||||
Changes in estimates that relate to losses and reversals of losses on groups of underlying contracts | (6) | 23 | (4) | 13 | (4) | 25 | (23) | (2) | ||||||||||||||||||||||||
Contracts initially recognized in the year | (45) | 102 | (57) | — | (37) | 95 | (58) | — | ||||||||||||||||||||||||
Total changes related to future service | 17 | 73 | (42) | 48 | (244) | 267 | (2) | 21 | ||||||||||||||||||||||||
Changes related to past service — Adjustments to FCF for incurred claims |
(38) | (9) | (47) | 249 | (4) | 245 | ||||||||||||||||||||||||||
Reinsurance contract held net income (expense) | 116 | (84) | (46) | (14) | (100) | 132 | (12) | 20 | ||||||||||||||||||||||||
Insurance finance income (expenses) from reinsurance contracts held | (120) | 164 | 1 | 45 | 229 | (648) | 1 | (418) | ||||||||||||||||||||||||
Total changes recognized in income | (4) | 80 | (45) | 31 | 129 | (516) | (11) | (398) | ||||||||||||||||||||||||
Foreign currency translation | (81) | (14) | (2) | (97) | 359 | 38 | 9 | 406 | ||||||||||||||||||||||||
Total changes recognized in income and OCI | (85) | 66 | (47) | (66) | 488 | (478) | (2) | 8 | ||||||||||||||||||||||||
Cash flows: | ||||||||||||||||||||||||||||||||
Premiums paid | 1,525 | 1,525 | 1,562 | 1,562 | ||||||||||||||||||||||||||||
Amounts recovered from reinsurers | (1,434) | (1,434) | (1,711) | (1,711) | ||||||||||||||||||||||||||||
Other | (279) | (279) | 72 | 72 | ||||||||||||||||||||||||||||
Total cash flows | (188) | (188) | (77) | (77) | ||||||||||||||||||||||||||||
Dispositions (Note 3) | (25) | (9) | 1 | (33) | — | — | — | — | ||||||||||||||||||||||||
Contracts modified | 5 | — | — | 5 | — | — | — | — | ||||||||||||||||||||||||
Net balances, end of year | $ | 1,493 | $ | 2,278 | $ | 59 | $ | 3,830 | $ | 1,786 | $ | 2,221 | $ | 105 | $ | 4,112 | ||||||||||||||||
Reinsurance contracts — non-PAA, end of year: | ||||||||||||||||||||||||||||||||
Reinsurance contract assets | $ | 3,848 | $ | 1,431 | $ | 174 | $ | 5,453 | $ | 4,061 | $ | 1,450 | $ | 163 | $ | 5,674 | ||||||||||||||||
Reinsurance contract liabilities | (2,355) | 847 | (115) | (1,623) | (2,275) | 771 | (58) | (1,562) | ||||||||||||||||||||||||
Net balances, end of year | $ | 1,493 | $ | 2,278 | $ | 59 | $ | 3,830 | $ | 1,786 | $ | 2,221 | $ | 105 | $ | 4,112 |
Asset for remaining coverage | Asset for incurred claims | |||||||||||||||||||||||||||||||||||||
Contracts using PAA | ||||||||||||||||||||||||||||||||||||||
For the year ended and as at December 31, 2023 |
Excluding loss-recovery component | Loss-recovery component | Contracts not using PAA | Estimates of PV of future cash flows | Risk Adjustment | Total | ||||||||||||||||||||||||||||||||
Reinsurance contract assets, beginning of year | $ | 4,894 | $ | 18 | $ | 752 | $ | 450 | $ | 1 | $ | 6,115 | ||||||||||||||||||||||||||
Reinsurance contract liabilities, beginning of year | (1,501) | — | (40) | (70) | 8 | (1,603) | ||||||||||||||||||||||||||||||||
Net balances, beginning of year | $ | 3,393 | $ | 18 | $ | 712 | $ | 380 | $ | 9 | $ | 4,512 | ||||||||||||||||||||||||||
Reinsurance contract held net income (expense) excluding changes in risk of non-performance by the reinsurer | (1,994) | 38 | 1,300 | 580 | 7 | (69) | ||||||||||||||||||||||||||||||||
Changes in the risk of non-performance by the reinsurer | 24 | — | (24) | — | — | — | ||||||||||||||||||||||||||||||||
Reinsurance contract held net income (expense) | (1,970) | 38 | 1,276 | 580 | 7 | (69) | ||||||||||||||||||||||||||||||||
Insurance finance income (expenses) from reinsurance contracts held | 23 | 2 | 8 | 25 | 1 | 59 | ||||||||||||||||||||||||||||||||
Total changes recognized in income | (1,947) | 40 | 1,284 | 605 | 8 | (10) | ||||||||||||||||||||||||||||||||
Foreign currency translation | (67) | — | (82) | (22) | — | (171) | ||||||||||||||||||||||||||||||||
Total changes recognized in income and OCI | (2,014) | 40 | 1,202 | 583 | 8 | (181) | ||||||||||||||||||||||||||||||||
Cash flows: | ||||||||||||||||||||||||||||||||||||||
Premiums paid | 2,268 | 2,268 | ||||||||||||||||||||||||||||||||||||
Amounts recovered from reinsurers | (1,549) | (562) | (2,111) | |||||||||||||||||||||||||||||||||||
Other | (165) | (30) | (2) | (197) | ||||||||||||||||||||||||||||||||||
Total cash flows | 2,103 | (1,579) | (564) | (40) | ||||||||||||||||||||||||||||||||||
Investment component excluded from reinsurance contract held net income (expense): | ||||||||||||||||||||||||||||||||||||||
Expected/incurred claims | 103 | — | 44 | 25 | — | 172 | ||||||||||||||||||||||||||||||||
Experience adjustment | (172) | — | — | — | (172) | |||||||||||||||||||||||||||||||||
Total investment component excluded from reinsurance contract held net income (expense) | (69) | — | 44 | 25 | — | — | ||||||||||||||||||||||||||||||||
Dispositions (Note 3) | 7 | — | (22) | (105) | — | (120) | ||||||||||||||||||||||||||||||||
Net balances, end of year | $ | 3,420 | $ | 58 | $ | 357 | $ | 319 | $ | 17 | $ | 4,171 | ||||||||||||||||||||||||||
Reinsurance contract assets, end of year | $ | 5,019 | $ | 56 | $ | 383 | $ | 319 | $ | 17 | $ | 5,794 | ||||||||||||||||||||||||||
Reinsurance contract liabilities, end of year | (1,599) | 2 | (26) | — | — | (1,623) | ||||||||||||||||||||||||||||||||
Net balances, end of year | $ | 3,420 | $ | 58 | $ | 357 | $ | 319 | $ | 17 | $ | 4,171 |
Asset for remaining coverage | Asset for incurred claims | |||||||||||||||||||||||||||||||||||||
Contracts using PAA | ||||||||||||||||||||||||||||||||||||||
For the year ended and as at December 31, 2022 |
Excluding loss-recovery component | Loss-recovery component | Contracts not using PAA | Estimates of PV of future cash flows | Risk Adjustment | Total | ||||||||||||||||||||||||||||||||
Reinsurance contract assets, beginning of year | $ | 5,600 | $ | — | $ | 558 | $ | 444 | $ | 10 | $ | 6,612 | ||||||||||||||||||||||||||
Reinsurance contract liabilities, beginning of year | (1,957) | — | (37) | — | — | (1,994) | ||||||||||||||||||||||||||||||||
Net balances, beginning of year | $ | 3,643 | $ | — | $ | 521 | $ | 444 | $ | 10 | $ | 4,618 | ||||||||||||||||||||||||||
Reinsurance contract held net income (expense) excluding changes in risk of non-performance by the reinsurer | (2,279) | 18 | 1,407 | 701 | — | (153) | ||||||||||||||||||||||||||||||||
Changes in the risk of non-performance by the reinsurer | 38 | — | (38) | — | — | — | ||||||||||||||||||||||||||||||||
Reinsurance contract held net income (expense) | (2,241) | 18 | 1,369 | 701 | — | (153) | ||||||||||||||||||||||||||||||||
Insurance finance income (expenses) from reinsurance contracts held | (430) | — | 9 | (18) | (1) | (440) | ||||||||||||||||||||||||||||||||
Total changes recognized in income | (2,671) | 18 | 1,378 | 683 | (1) | (593) | ||||||||||||||||||||||||||||||||
Foreign currency translation | 227 | — | 165 | (17) | — | 375 | ||||||||||||||||||||||||||||||||
Total changes recognized in income and OCI | (2,444) | 18 | 1,543 | 666 | (1) | (218) | ||||||||||||||||||||||||||||||||
Cash flows: | ||||||||||||||||||||||||||||||||||||||
Premiums paid | 2,489 | 2,489 | ||||||||||||||||||||||||||||||||||||
Amounts recovered from reinsurers | (1,702) | (753) | (2,455) | |||||||||||||||||||||||||||||||||||
Other | (217) | 295 | — | 78 | ||||||||||||||||||||||||||||||||||
Total cash flows | 2,272 | (1,407) | (753) | 112 | ||||||||||||||||||||||||||||||||||
Investment component excluded from reinsurance contract held net income (expense): | ||||||||||||||||||||||||||||||||||||||
Expected/incurred claims | 38 | — | 55 | 23 | — | 116 | ||||||||||||||||||||||||||||||||
Experience adjustment | (116) | — | — | — | (116) | |||||||||||||||||||||||||||||||||
Total investment component excluded from reinsurance contract held net income (expense) | (78) | — | 55 | 23 | — | — | ||||||||||||||||||||||||||||||||
Net balances, end of year | $ | 3,393 | $ | 18 | $ | 712 | $ | 380 | $ | 9 | $ | 4,512 | ||||||||||||||||||||||||||
Reinsurance contract assets, end of year | $ | 4,894 | $ | 18 | $ | 752 | $ | 450 | $ | 1 | $ | 6,115 | ||||||||||||||||||||||||||
Reinsurance contract liabilities, end of year | (1,501) | — | (40) | (70) | 8 | (1,603) | ||||||||||||||||||||||||||||||||
Net balances, end of year | $ | 3,393 | $ | 18 | $ | 712 | $ | 380 | $ | 9 | $ | 4,512 |
For the year ended and as at December 31, 2023 |
Canada |
U.S. |
Asia |
Corporate |
Total | |||||||||||||||||||||||||||
Net balances, beginning of year | $ | 5,481 | $ | 1,296 | $ | 3,811 | $ | 382 | $ | 10,970 | ||||||||||||||||||||||
Changes recognized in income and OCI: | ||||||||||||||||||||||||||||||||
CSM recognized for services provided | (432) | (116) | (365) | (10) | (923) | |||||||||||||||||||||||||||
Changes in estimates that adjust CSM | 492 | (128) | 555 | (5) | 914 | |||||||||||||||||||||||||||
Contracts initially recognized in the year | 552 | — | 707 | — | 1,259 | |||||||||||||||||||||||||||
Insurance finance (income) expenses from insurance contracts issued | (31) | 20 | 4 | (1) | (8) | |||||||||||||||||||||||||||
Foreign currency translation | — | (29) | (91) | 14 | (106) | |||||||||||||||||||||||||||
Dispositions | — | 119 | — | (380) | (261) | |||||||||||||||||||||||||||
Net balances, end of year | $ | 6,062 | $ | 1,162 | $ | 4,621 | $ | — | $ | 11,845 |
For the year ended and as at December 31, 2022 | Canada |
U.S. |
Asia |
Corporate |
Total | |||||||||||||||||||||||||||
Net balances, beginning of year | $ | 5,346 | $ | 1,201 | $ | 3,054 | $ | 303 | $ | 9,904 | ||||||||||||||||||||||
Changes recognized in income and OCI: | ||||||||||||||||||||||||||||||||
CSM recognized for services provided | (398) | (111) | (326) | (36) | (871) | |||||||||||||||||||||||||||
Changes in estimates that adjust CSM | 419 | 105 | 483 | 126 | 1,133 | |||||||||||||||||||||||||||
Contracts initially recognized in the year | 443 | — | 451 | — | 894 | |||||||||||||||||||||||||||
Insurance finance (income) expenses from insurance contracts issued | (329) | 9 | (21) | (6) | (347) | |||||||||||||||||||||||||||
Foreign currency translation | — | 92 | 170 | (5) | 257 | |||||||||||||||||||||||||||
Net balances, end of year | $ | 5,481 | $ | 1,296 | $ | 3,811 | $ | 382 | $ | 10,970 |
For the year ended and as at December 31, 2023 |
Canada |
U.S. |
Asia |
Corporate |
Total | |||||||||||||||||||||||||||
Net balances, beginning of year | $ | (20) | $ | 128 | $ | (7) | $ | 4 | $ | 105 | ||||||||||||||||||||||
Changes recognized in income and OCI: | ||||||||||||||||||||||||||||||||
CSM recognized for services received | — | (7) | 1 | 2 | (4) | |||||||||||||||||||||||||||
Changes in estimates that adjust CSM | 78 | (113) | 26 | (7) | (16) | |||||||||||||||||||||||||||
Loss recoveries at initial recognition of onerous underlying contracts | 34 | — | 1 | — | 35 | |||||||||||||||||||||||||||
Changes in estimates that relate to losses and reversals of losses on groups of underlying contracts | (3) | — | (1) | — | (4) | |||||||||||||||||||||||||||
Contracts initially recognized in the year | (57) | — | — | — | (57) | |||||||||||||||||||||||||||
Insurance finance income (expenses) from reinsurance contracts held | — | 1 | — | — | 1 | |||||||||||||||||||||||||||
Foreign currency translation | — | — | (2) | — | (2) | |||||||||||||||||||||||||||
Dispositions | — | — | — | 1 | 1 | |||||||||||||||||||||||||||
Net balances, end of year | $ | 32 | $ | 9 | $ | 18 | $ | — | $ | 59 |
For the year ended and as at December 31, 2022 | Canada |
U.S. |
Asia |
Corporate |
Total | |||||||||||||||||||||||||||
Net balances, beginning of year | $ | 12 | $ | 111 | $ | (3) | $ | (13) | $ | 107 | ||||||||||||||||||||||
Changes recognized in income and OCI: | ||||||||||||||||||||||||||||||||
CSM recognized for services received | (1) | (10) | (2) | 3 | (10) | |||||||||||||||||||||||||||
Changes in estimates that adjust CSM | 23 | 39 | (20) | 14 | 56 | |||||||||||||||||||||||||||
Loss recoveries at initial recognition of onerous underlying contracts | 23 | — | — | — | 23 | |||||||||||||||||||||||||||
Changes in estimates that relate to losses and reversals of losses on groups of underlying contracts | (14) | (22) | 13 | — | (23) | |||||||||||||||||||||||||||
Contracts initially recognized in the year | (63) | — | 5 | — | (58) | |||||||||||||||||||||||||||
Insurance finance income (expenses) from reinsurance contracts held | — | 1 | — | — | 1 | |||||||||||||||||||||||||||
Foreign currency translation | — | 9 | — | — | 9 | |||||||||||||||||||||||||||
Net balances, end of year | $ | (20) | $ | 128 | $ | (7) | $ | 4 | $ | 105 |
For the years ended | Canada | U.S | Asia | Corporate | Total | |||||||||||||||||||||||||||
December 31, 2023 | ||||||||||||||||||||||||||||||||
For contracts not measured using the PAA: |
||||||||||||||||||||||||||||||||
Amounts relating to changes in liabilities for remaining coverage: |
||||||||||||||||||||||||||||||||
Expected claims and other expenses(1) |
$ | 2,924 | $ | 1,092 | $ | 655 | $ | 68 | $ | 4,739 | ||||||||||||||||||||||
Release of risk adjustment(1) |
344 | 32 | 162 | 7 | 545 | |||||||||||||||||||||||||||
CSM recognized for services provided | 432 | 116 | 365 | 10 | 923 | |||||||||||||||||||||||||||
Income taxes specifically chargeable to the policyholder |
5 | — | — | — | 5 | |||||||||||||||||||||||||||
Premium experience adjustments | — | — | — | — | — | |||||||||||||||||||||||||||
Amortization of insurance acquisition cash flows | 90 | — | 112 | — | 202 | |||||||||||||||||||||||||||
Total insurance revenue for contracts not measured using the PAA | 3,795 | 1,240 | 1,294 | 85 | 6,414 | |||||||||||||||||||||||||||
For contracts measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance revenue | 4,370 | 10,481 | 91 | — | 14,942 | |||||||||||||||||||||||||||
Total insurance revenue | $ | 8,165 | $ | 11,721 | $ | 1,385 | $ | 85 | $ | 21,356 | ||||||||||||||||||||||
December 31, 2022 |
||||||||||||||||||||||||||||||||
For contracts not measured using the PAA: |
||||||||||||||||||||||||||||||||
Amounts relating to changes in liabilities for remaining coverage: | ||||||||||||||||||||||||||||||||
Expected claims and other expenses(1) |
$ | 2,785 | $ | 803 | $ | 746 | $ | 399 | $ | 4,733 | ||||||||||||||||||||||
Release of risk adjustment(1) |
339 | 27 | 97 | 30 | 493 | |||||||||||||||||||||||||||
CSM recognized for services provided | 398 | 111 | 326 | 36 | 871 | |||||||||||||||||||||||||||
Income taxes specifically chargeable to the policyholder | (70) | — | — | (1) | (71) | |||||||||||||||||||||||||||
Premium experience adjustments | — | — | — | — | — | |||||||||||||||||||||||||||
Amortization of insurance acquisition cash flows | 22 | — | 35 | — | 57 | |||||||||||||||||||||||||||
Total insurance revenue for contracts not measured using the PAA | 3,474 | 941 | 1,204 | 464 | 6,083 | |||||||||||||||||||||||||||
For contracts measured using the PAA: | ||||||||||||||||||||||||||||||||
Insurance revenue | 4,637 | 8,063 | 119 | — | 12,819 | |||||||||||||||||||||||||||
Total insurance revenue | $ | 8,111 | $ | 9,004 | $ | 1,323 | $ | 464 | $ | 18,902 |
For the year ended and as at December 31, 2023 | Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||||
Contracts initially recognized in the period (excluding acquisitions): | ||||||||||||||||||||||||||||||||
Amounts related to all contracts initially recognized: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | (9,564) | $ | — | $ | (6,181) | $ | — | $ | (15,745) | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Insurance acquisition cash flows | 1,009 | — | 1,277 | — | 2,286 | |||||||||||||||||||||||||||
Other cash outflows | 7,804 | — | 3,953 | — | 11,757 | |||||||||||||||||||||||||||
Risk adjustment | 260 | — | 253 | — | 513 | |||||||||||||||||||||||||||
CSM | 552 | — | 707 | — | 1,259 | |||||||||||||||||||||||||||
Total contracts initially recognized in the period (excluding acquisitions) | $ | 61 | $ | — | $ | 9 | $ | — | $ | 70 | ||||||||||||||||||||||
Amounts related to onerous contracts included in total contracts above: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | (1,978) | $ | — | $ | (129) | $ | — | $ | (2,107) | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Insurance acquisition cash flows | 77 | — | 25 | — | 102 | |||||||||||||||||||||||||||
Other cash outflows | 1,845 | — | 108 | — | 1,953 | |||||||||||||||||||||||||||
Risk adjustment | 117 | — | 5 | — | 122 | |||||||||||||||||||||||||||
Total onerous contracts | $ | 61 | $ | — | $ | 9 | $ | — | $ | 70 | ||||||||||||||||||||||
For the year ended and as at December 31, 2022 | Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||||
Contracts initially recognized in the period (excluding acquisitions): | ||||||||||||||||||||||||||||||||
Amounts related to all contracts initially recognized: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | (7,727) | $ | — | $ | (3,563) | $ | — | $ | (11,290) | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Insurance acquisition cash flows | 746 | — | 601 | — | 1,347 | |||||||||||||||||||||||||||
Other cash outflows | 6,356 | — | 2,328 | — | 8,684 | |||||||||||||||||||||||||||
Risk adjustment | 264 | — | 192 | — | 456 | |||||||||||||||||||||||||||
CSM | 443 | — | 451 | — | 894 | |||||||||||||||||||||||||||
Total contracts initially recognized in the period (excluding acquisitions) | $ | 82 | $ | — | $ | 9 | $ | — | $ | 91 | ||||||||||||||||||||||
Amounts related to onerous contracts included in total contracts above: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | (927) | $ | — | $ | (107) | $ | — | $ | (1,034) | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Insurance acquisition cash flows | 59 | — | 28 | — | 87 | |||||||||||||||||||||||||||
Other cash outflows | 840 | — | 83 | — | 923 | |||||||||||||||||||||||||||
Risk adjustment | 110 | — | 5 | — | 115 | |||||||||||||||||||||||||||
Total onerous contracts | $ | 82 | $ | — | $ | 9 | $ | — | $ | 91 | ||||||||||||||||||||||
For the year ended and as at December 31, 2023 |
Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||||
Contracts initially recognized in the period (excluding acquisitions): | ||||||||||||||||||||||||||||||||
Amounts related to all contracts initially recognized: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | 264 | $ | — | $ | 85 | $ | — | $ | 349 | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Premiums and other expenses | (277) | — | (117) | — | (394) | |||||||||||||||||||||||||||
Insurance acquisition cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
Risk adjustment | 70 | — | 32 | — | 102 | |||||||||||||||||||||||||||
CSM | (57) | — | — | — | (57) | |||||||||||||||||||||||||||
Total contracts initially recognized in the period (excluding acquisitions) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Amounts related to contracts initially recognized in the period with a loss recovery component included in total contracts above: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | 148 | $ | — | $ | 1 | $ | — | $ | 149 | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Premiums and other expenses | (147) | — | (1) | — | (148) | |||||||||||||||||||||||||||
Insurance acquisition cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
Risk adjustment | 45 | — | — | — | 45 | |||||||||||||||||||||||||||
CSM | (46) | — | — | — | (46) | |||||||||||||||||||||||||||
Total reinsurance contracts held with a loss recovery component | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Loss recoveries at initial recognition of onerous underlying contracts | $ | 34 | $ | — | $ | 1 | $ | — | $ | 35 |
For the year ended and as at December 31, 2022 |
Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||||
Contracts initially recognized in the period (excluding acquisitions): | ||||||||||||||||||||||||||||||||
Amounts related to all contracts initially recognized: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | 259 | $ | — | $ | 41 | $ | — | $ | 300 | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Premiums and other expenses | (265) | — | (72) | — | (337) | |||||||||||||||||||||||||||
Insurance acquisition cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
Risk adjustment | 69 | — | 26 | — | 95 | |||||||||||||||||||||||||||
CSM | (63) | — | 5 | — | (58) | |||||||||||||||||||||||||||
Total contracts initially recognized in the period (excluding acquisitions) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Amounts related to contracts initially recognized in the period with a loss recovery component included in total contracts above: | ||||||||||||||||||||||||||||||||
Estimates of present value of future cash inflows | $ | 143 | $ | — | $ | 3 | $ | — | $ | 146 | ||||||||||||||||||||||
Estimates of present value of future cash outflows: | ||||||||||||||||||||||||||||||||
Premiums and other expenses | (141) | — | (2) | — | (143) | |||||||||||||||||||||||||||
Insurance acquisition cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
Risk adjustment | 42 | — | — | — | 42 | |||||||||||||||||||||||||||
CSM | (44) | — | (1) | — | (45) | |||||||||||||||||||||||||||
Total reinsurance contracts held with a loss recovery component | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Loss recoveries at initial recognition of onerous underlying contracts | $ | 23 | $ | — | $ | — | $ | — | $ | 23 |
For the year ended December 31, 2023 | |||||||||||||||||||||||
Income impact | Deferred in CSM | Description | |||||||||||||||||||||
Mortality / Morbidity | $ | (115) | $ | 179 | Updates to reflect mortality/morbidity experience in all jurisdictions. The largest items were favourable mortality impacts in the UK Annuities in the U.S and Group Retirement Services ("GRS") in Canada. These were offset partially by adverse mortality in In-force Management in the U.S. Mortality updates impacting CSM favourably are funded at locked-in rates that are lower than current rates resulting in a negative net income impact. Additionally, favourable morbidity impacts in Group Benefits in the U.S. were largely offset by unfavourable morbidity updates in Sun Life Health in Canada. | ||||||||||||||||||
Expense | 10 | (171) | Updates to reflect higher costs related to IFRS 17 infrastructure and higher cost in Canada. | ||||||||||||||||||||
Financial | 163 | 202 | Updates to various financial related assumptions including the ultimate risk-free rate. | ||||||||||||||||||||
Policyholder Behaviour | (75) | (274) | Updates to reflect lapse and policyholder behaviour in all jurisdictions. The largest items were an adverse lapse impact in Individual Term and Universal Life in Canada, and in International, Hong Kong and Vietnam in Asia. | ||||||||||||||||||||
Model enhancements and other | 107 | 382 | Various enhancements and methodology changes. The largest items were favourable impacts from refinements to the modelling of guarantees for the Individual Par in Canada and International Universal Life in Asia, as well as modelling enhancements in Vietnam in Asia offset partially by a refinement in Group in Canada and to reinsurance and other provisions in Hong Kong in Asia. | ||||||||||||||||||||
Total (pre-tax) | $ | 90 | $ | 318 |
For the year ended December 31, 2022 | |||||||||||||||||||||||
(restated, see Note 2) | |||||||||||||||||||||||
Income impact | Deferred in CSM | Description | |||||||||||||||||||||
Mortality / Morbidity | $ | (75) | $ | 136 | Updates to reflect mortality/morbidity experience in all jurisdictions. The largest items were favourable mortality impacts in the UK Annuity block in Corporate and in GRS in Canada offset partially by adverse morbidity impacts in Sun Life Health in Canada. | ||||||||||||||||||
Expense | (9) | 7 | Updates to reflect expense experience. | ||||||||||||||||||||
Financial | 24 | 135 | Updates to various financial related assumptions. | ||||||||||||||||||||
Policyholder Behaviour | (35) | (30) | Updates to lapse and policyholder behaviour in all jurisdictions. | ||||||||||||||||||||
Model enhancements and other | (144) | 184 | Various enhancements and methodology changes. The largest being a refinement to Hong Kong variable universal life contracts in Asia and refinements to Segregated Fund modelling in Canada. | ||||||||||||||||||||
Total (pre-tax) | $ | (239) | $ | 432 |
Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||
As at December 31, 2023 |
|||||||||||||||||||||||||||||
Within 1 year | $ | 476 | $ | 112 | $ | 387 | $ | — | $ | 975 | |||||||||||||||||||
1-3 years | 848 | 194 | 677 | — | 1,719 | ||||||||||||||||||||||||
3-5 years | 726 | 162 | 571 | — | 1,459 | ||||||||||||||||||||||||
5-10 years | 1,378 | 294 | 1,075 | — | 2,747 | ||||||||||||||||||||||||
Over 10 years | 2,634 | 400 | 1,911 | — | 4,945 | ||||||||||||||||||||||||
Total | $ | 6,062 | $ | 1,162 | $ | 4,621 | $ | — | $ | 11,845 | |||||||||||||||||||
As at December 31, 2022 |
|||||||||||||||||||||||||||||
Within 1 year | $ | 396 | $ | 116 | $ | 290 | $ | 42 | $ | 844 | |||||||||||||||||||
1-3 years | 715 | 207 | 512 | 72 | 1,506 | ||||||||||||||||||||||||
3-5 years | 623 | 176 | 435 | 58 | 1,292 | ||||||||||||||||||||||||
5-10 years | 1,217 | 328 | 827 | 98 | 2,470 | ||||||||||||||||||||||||
Over 10 years | 2,530 | 469 | 1,747 | 112 | 4,858 | ||||||||||||||||||||||||
Total | $ | 5,481 | $ | 1,296 | $ | 3,811 | $ | 382 | $ | 10,970 |
Canada | U.S. | Asia | Corporate | Total | |||||||||||||||||||||||||
As at December 31, 2023 |
|||||||||||||||||||||||||||||
Within 1 year | $ | (2) | $ | (3) | $ | (1) | $ | — | $ | (6) | |||||||||||||||||||
1-3 years | (3) | (4) | (2) | — | (9) | ||||||||||||||||||||||||
3-5 years | (3) | (3) | (2) | — | (8) | ||||||||||||||||||||||||
5-10 years | (7) | (2) | (4) | — | (13) | ||||||||||||||||||||||||
Over 10 years | (17) | 3 | (9) | — | (23) | ||||||||||||||||||||||||
Total | $ | (32) | $ | (9) | $ | (18) | $ | — | $ | (59) | |||||||||||||||||||
As at December 31, 2022 |
|||||||||||||||||||||||||||||
Within 1 year | $ | 1 | $ | (11) | $ | 1 | $ | 1 | $ | (8) | |||||||||||||||||||
1-3 years | 2 | (19) | 1 | 1 | (15) | ||||||||||||||||||||||||
3-5 years | 2 | (17) | 1 | — | (14) | ||||||||||||||||||||||||
5-10 years | 4 | (32) | 2 | (1) | (27) | ||||||||||||||||||||||||
Over 10 years | 11 | (49) | 2 | (5) | (41) | ||||||||||||||||||||||||
Total | $ | 20 | $ | (128) | $ | 7 | $ | (4) | $ | (105) |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
Insurance contracts at transition measured using the fair value approach: | ||||||||||||||
Contractual Service Margin: |
||||||||||||||
Balances, beginning of year | $ | 10,205 | $ | 9,886 | ||||||||||
Changes related to current service: | ||||||||||||||
CSM recognized for services provided | (822) | (843) | ||||||||||||
Experience adjustments | — | — | ||||||||||||
Changes related to future service: | ||||||||||||||
Changes in estimates that adjust CSM | 703 | 1,274 | ||||||||||||
Contracts initially recognized in the year | — | — | ||||||||||||
Insurance finance income (expenses) from insurance contracts issued | (39) | (352) | ||||||||||||
Foreign currency translation | (85) | 240 | ||||||||||||
Dispositions | (261) | — | ||||||||||||
Balances, end of year | $ | 9,701 | $ | 10,205 | ||||||||||
Insurance revenue | $ | 5,716 | $ | 5,892 | ||||||||||
All other insurance contracts: | ||||||||||||||
Contractual Service Margin: | ||||||||||||||
Balances, beginning of year | $ | 765 | $ | 18 | ||||||||||
Changes related to current service: | ||||||||||||||
CSM recognized for services provided | (101) | (28) | ||||||||||||
Experience adjustments | — | — | ||||||||||||
Changes related to future service: | ||||||||||||||
Changes in estimates that adjust CSM | 211 | (141) | ||||||||||||
Contracts initially recognized in the year | 1,259 | 894 | ||||||||||||
Insurance finance income (expenses) from insurance contracts issued | 31 | 5 | ||||||||||||
Foreign currency translation | (21) | 17 | ||||||||||||
Balances, end of year | $ | 2,144 | $ | 765 | ||||||||||
Insurance revenue | $ | 15,640 | $ | 13,010 |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
Reinsurance contracts held at transition measured using the fair value approach: | ||||||||||||||
Contractual Service Margin: |
||||||||||||||
Balances, beginning of year |
$ | 175 | $ | 107 | ||||||||||
Changes related to current service: | ||||||||||||||
CSM recognized for services received |
(11) | (13) | ||||||||||||
Experience adjustments |
— | — | ||||||||||||
Changes related to future service: | ||||||||||||||
Changes in estimates that adjust CSM | (22) | 81 | ||||||||||||
Loss recoveries at initial recognition of onerous underlying contracts | — | — | ||||||||||||
Changes in estimates that relate to losses and reversals of losses on groups of underlying contracts | 3 | (9) | ||||||||||||
Contracts initially recognized in the period |
— | — | ||||||||||||
Insurance finance income (expenses) from reinsurance contracts held | 2 | 1 | ||||||||||||
Foreign currency translation | (2) | 8 | ||||||||||||
Dispositions | 1 | — | ||||||||||||
Balances, end of year | $ | 146 | $ | 175 | ||||||||||
All other reinsurance contracts held: |
||||||||||||||
Contractual Service Margin: | ||||||||||||||
Balances, beginning of year | $ | (70) | $ | — | ||||||||||
Changes related to current service: | ||||||||||||||
CSM recognized for services received | 7 | 3 | ||||||||||||
Experience adjustments | — | — | ||||||||||||
Changes related to future service: | ||||||||||||||
Changes in estimates that adjust CSM | 6 | (25) | ||||||||||||
Loss recoveries at initial recognition of onerous underlying contracts | 35 | 23 | ||||||||||||
Changes in estimates that relate to losses and reversals of losses on groups of underlying contracts | (7) | (14) | ||||||||||||
Contracts initially recognized in the period | (57) | (58) | ||||||||||||
Insurance finance income (expenses) from reinsurance contracts held | (1) | — | ||||||||||||
Foreign currency translation | — | 1 | ||||||||||||
Balances, end of year | $ | (87) | $ | (70) |
As at December 31, |
2023 | 2022 | ||||||||||||
Cash, cash equivalents and short-term securities |
$ | 3,529 | $ | 2,339 | ||||||||||
Debt securities | 23,668 | 22,140 | ||||||||||||
Equity securities |
4,790 | 4,750 | ||||||||||||
Mortgages and loans |
10,746 | 9,749 | ||||||||||||
Derivative assets |
250 | 131 | ||||||||||||
Other financial invested assets |
2,260 | 2,187 | ||||||||||||
Investment properties | 5,967 | 6,346 | ||||||||||||
Total |
$ | 51,210 | $ | 47,642 |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
Incurred claims | $ | 14,851 | $ | 13,284 | ||||||||||
Directly attributable operating expenses and commissions (Note 17) | 2,002 | 1,839 | ||||||||||||
Total incurred claims and other expenses(1) |
16,853 | 15,123 | ||||||||||||
Amortization of insurance acquisition cash flows | 202 | 56 | ||||||||||||
Insurance acquisition cash flows expensed as incurred (Note 17) | 1,174 | 1,107 | ||||||||||||
Changes related to future service (losses on onerous groups and reversals of such losses) |
126 | 153 | ||||||||||||
Changes related to past service (changes in FCF related to liability for incurred claims) |
95 | 17 | ||||||||||||
Total insurance service expenses | $ | 18,450 | $ | 16,456 |
11. Other Liabilities |
As at December 31, |
2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Accounts payable | $ | 2,493 | $ | 2,354 | ||||||||||
Bank overdrafts and cash pooling | — | 6 | ||||||||||||
Repurchase agreements (Note 5) |
2,705 | 2,725 | ||||||||||||
Accrued expenses and taxes | 4,433 | 4,002 | ||||||||||||
Credit facilities(1) |
2,330 | 2,339 | ||||||||||||
Borrowed funds(2) |
333 | 403 | ||||||||||||
Accrued post-retirement benefit liability (Note 24) |
355 | 268 | ||||||||||||
Secured borrowings from mortgage securitization (Note 5) |
2,119 | 2,158 | ||||||||||||
Lease liabilities | 989 | 952 | ||||||||||||
Other financial liabilities (Note 5)(3) |
2,449 | 1,996 | ||||||||||||
Obligations for securities borrowing | 223 | 73 | ||||||||||||
Collateralized loan obligations (Note 5) |
3,247 | 2,816 | ||||||||||||
Deferred payments liability | 240 | 299 | ||||||||||||
Other(1) |
1,739 | 1,718 | ||||||||||||
Total other liabilities | $ | 23,655 | $ | 22,109 |
As at December 31, | Currency of borrowing | Maturity | 2023 | 2022 | |||||||||||||||||||
Encumbrances on real estate | Cdn. dollars | Current — 2029 |
$ | 258 | $ | 326 | |||||||||||||||||
Encumbrances on real estate | U.S. dollars | 2024 | 75 | 77 | |||||||||||||||||||
Total borrowed funds | $ | 333 | $ | 403 |
12. Senior Debentures and Innovative Capital Instruments |
Interest rate |
Earliest par call or redemption date |
Maturity | 2023 | 2022 | |||||||||||||||||||
Sun Life Assurance senior debentures:(2) |
|||||||||||||||||||||||
Issued to Sun Life Capital Trust ("SLCT I") | |||||||||||||||||||||||
Series B issued June 25, 2002 | 7.093% | June 30, 2032(3) |
2052 | $ | 200 | $ | 200 | ||||||||||||||||
Fair value | $ | 220 | $ | 215 |
Issuer | Issuance date |
Distribution or interest
payment dates
|
Annual
yield
|
Redemption date at
the issuer’s option
|
Conversion date at
the holder’s option
|
Principal
amount
|
||||||||||||||||||||
Sun Life Capital Trust ("SLCT I")(1)(2)(3)(4) |
||||||||||||||||||||||||||
SLEECS B |
June 25, 2002 | June 30, December 31 | 7.093% | June 30, 2007 | Any time | $ | 200 | |||||||||||||||||||
13. Subordinated Debt |
Interest rate | Earliest par call date(1) |
Maturity | 2023 | 2022 | ||||||||||||||||||||||
Sun Life Assurance: | ||||||||||||||||||||||||||
Issued May 15, 1998(2) |
6.30% | n/a | 2028 | $ | 150 | $ | 150 | |||||||||||||||||||
Sun Life Financial Inc.: | ||||||||||||||||||||||||||
Issued May 29, 2007(3) |
5.40% | May 29, 2037 | (4) |
2042 | 398 | 398 | ||||||||||||||||||||
Issued September 19, 2016(5) |
3.05% | September 19, 2023 | 2028 | — | 999 | |||||||||||||||||||||
Issued August 13, 2019(6) |
2.38% | August 13, 2024 | 2029 | 750 | 749 | |||||||||||||||||||||
Issued May 8, 2020(7) |
2.58% | May 10, 2027 | 2032 | 997 | 996 | |||||||||||||||||||||
Issued October 1, 2020(8) |
2.06% | October 1, 2030 | 2035 | 747 | 746 | |||||||||||||||||||||
Issued November 18, 2021(9) |
2.46% | November 18, 2026 | 2031 | 498 | 498 | |||||||||||||||||||||
Issued November 18, 2021(10),(12) |
2.80% | November 21, 2028 | 2033 | 996 | 996 | |||||||||||||||||||||
Issued November 18, 2021(11),(12) |
3.15% | November 18, 2031 | 2036 | 498 | 498 | |||||||||||||||||||||
Issued August 10, 2022(13) |
4.78% | August 10, 2029 | 2034 | 647 | 646 | |||||||||||||||||||||
Issued July 4, 2023(14) |
5.50% | July 4, 2030 | 2035 | 497 | — | |||||||||||||||||||||
Total subordinated debt | $ | 6,178 | $ | 6,676 | ||||||||||||||||||||||
Fair value | $ | 5,888 | $ | 6,106 |
14. Share Capital |
2023 | 2022 | |||||||||||||||||||||||||
Common shares (in millions of shares) | Number of shares |
Amount | Number of shares |
Amount | ||||||||||||||||||||||
Balance, beginning of year | 586.4 | $ | 8,311 | 586.0 | $ | 8,305 | ||||||||||||||||||||
Stock options exercised (Note 18) |
1.0 | 56 | 0.4 | 6 | ||||||||||||||||||||||
Common shares purchased for cancellation | (2.8) | (40) | — | — | ||||||||||||||||||||||
Balance, end of year | 584.6 | $ | 8,327 | 586.4 | $ | 8,311 |
(in millions of shares) |
Issue date | Annual dividend rate |
Annual dividend per share |
Earliest par call or
redemption date(1)
|
Number of shares |
Face amount |
Net
amount(2)
|
|||||||||||||||||||||||||||||||
Class A Preferred shares | ||||||||||||||||||||||||||||||||||||||
Series 3 | January 13, 2006 | 4.45% | $ | 1.11 | Any time | 10.0 | $ | 250 | $ | 245 | ||||||||||||||||||||||||||||
Series 4 | October 10, 2006 | 4.45% | $ | 1.11 | Any time | 12.0 | 300 | 293 | ||||||||||||||||||||||||||||||
Series 5 | February 2, 2007 | 4.50% | $ | 1.13 | Any time | 10.0 | 250 | 245 | ||||||||||||||||||||||||||||||
Series 8R(3) |
May 25, 2010 | 1.825% | (3) |
$ | 0.46 | June 30, 2025(4) |
6.2 | 155 | 152 | |||||||||||||||||||||||||||||
Series 9QR(5) |
June 30, 2015 | Floating | (6) |
Floating | June 30, 2025(7) |
5.0 | 125 | 122 | ||||||||||||||||||||||||||||||
Series 10R(3) |
August 12, 2011 | 2.967% | (3) |
$ | 0.74 | (8) |
September 30, 2026(4) |
6.8 | 171 | 167 | ||||||||||||||||||||||||||||
Series 11QR(5) |
September 30, 2016 | Floating | (6) |
Floating | September 30, 2026(7) |
1.2 | 29 | 28 | ||||||||||||||||||||||||||||||
Other equity instruments | ||||||||||||||||||||||||||||||||||||||
Series 2021-1(9) |
June 30, 2021 | 3.600% | n/a | June 30, 2026 | 1.0 | 1,000 | 987 | |||||||||||||||||||||||||||||||
Total preferred shares and other equity instruments | 52.2 | $ | 2,280 | $ | 2,239 |
15. Interests in Other Entities |
As at or for the years ended December 31, | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Carrying amount of interests in joint ventures and associates | $ | 1,628 | $ | 1,614 | ||||||||||
Our share of: | ||||||||||||||
Net income (loss) | 94 | (17) | ||||||||||||
Other comprehensive income (loss) | (37) | (63) | ||||||||||||
Total comprehensive income (loss) | $ | 57 | $ | (80) |
As at December 31, |
2023 | 2022 | ||||||||||||||||||||||||||||||
Type of structured entity | Type of investment held | Consolidated Statements of Financial Position line item | Carrying amount |
Maximum
exposure to
loss(1)
|
Carrying amount |
Maximum
exposure to
loss(1)
|
||||||||||||||||||||||||||
Securitization entities — third-party managed |
Debt securities | Debt securities | $ | 9,931 | $ | 9,931 | $ | 9,155 | $ | 9,155 | ||||||||||||||||||||||
Securitization entities — third-party managed |
Short-term securities | Cash, cash equivalents and short-term securities | $ | 539 | $ | 539 | $ | 790 | $ | 790 | ||||||||||||||||||||||
Investment funds — third-party managed |
Investment fund units | Equity securities | $ | 5,869 | $ | 5,869 | $ | 5,766 | $ | 5,766 | ||||||||||||||||||||||
Investment funds — company managed(2) |
Investment fund units and Limited partnership units | Equity securities, Other financial invested assets, and Other non-financial invested assets | $ | 3,484 | $ | 3,484 | $ | 3,365 | $ | 3,365 | ||||||||||||||||||||||
Limited partnerships — third-party managed |
Limited partnership units | Other non-financial invested assets | $ | 3,128 | $ | 3,128 | $ | 2,786 | $ | 2,786 |
16. Fee Income |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Fee income from service contracts: | ||||||||||||||
Distribution fees | $ | 973 | $ | 873 | ||||||||||
Fund management and other asset-based fees | 5,595 | 5,557 | ||||||||||||
Administrative service and other fees | 1,264 | 1,017 | ||||||||||||
Total fee income | $ | 7,832 | $ | 7,447 |
17. Operating expenses and commissions |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Operating expenses incurred (insurance and non-insurance): | ||||||||||||||
Employee expenses(1) |
$ | 6,144 | $ | 5,107 | ||||||||||
Premises and equipment | 216 | 216 | ||||||||||||
Capital asset depreciation | 249 | 241 | ||||||||||||
Service fees | 1,220 | 1,152 | ||||||||||||
Amortization and impairment of intangible assets and goodwill | 349 | 475 | ||||||||||||
Other expenses | 2,610 | 1,882 | ||||||||||||
Total operating expenses incurred (insurance and non-insurance) | 10,788 | 9,073 | ||||||||||||
Commissions incurred: | ||||||||||||||
Insurance | 2,084 | 1,802 | ||||||||||||
Non-insurance | 948 | 990 | ||||||||||||
Total commissions incurred (insurance and non-insurance) | 3,032 | 2,792 | ||||||||||||
Total operating expenses and commissions incurred (insurance and non-insurance) | 13,820 | 11,865 | ||||||||||||
Less: Amounts deferred as insurance acquisition cash flows for insurance contracts | 2,034 | 1,497 | ||||||||||||
Amounts included in insurance service expenses (Note 10) |
3,176 | 2,946 | ||||||||||||
Investment components for insurance contracts excluded from expenses | 615 | 330 | ||||||||||||
Total operating expenses and commissions | $ | 7,995 | $ | 7,092 |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
Salaries, bonus, employee benefits | $ | 5,605 | $ | 4,846 | ||||||||||
Share-based payments (Note 18) |
491 | 227 | ||||||||||||
Other personnel costs | 48 | 34 | ||||||||||||
Total employee expenses | $ | 6,144 | $ | 5,107 |
18. Share-Based Payments |
2023 | 2022 | |||||||||||||||||||||||||
Number of stock options (thousands) | Weighted average exercise price | Number of stock options (thousands) |
Weighted average exercise price |
|||||||||||||||||||||||
Balance, January 1, | 3,589 | $ | 58.51 | 3,042 | $ | 55.85 | ||||||||||||||||||||
Granted | 790 | $ | 67.68 | 709 | $ | 68.12 | ||||||||||||||||||||
Exercised | (951) | $ | 51.60 | (115) | $ | 45.94 | ||||||||||||||||||||
Forfeited | — | $ | — | (47) | $ | 62.38 | ||||||||||||||||||||
Balance, December 31, | 3,428 | $ | 62.54 | 3,589 | $ | 58.51 | ||||||||||||||||||||
Exercisable, December 31 | 1,560 | $ | 57.89 | 1,785 | $ | 53.33 |
Range of exercise prices | Number of stock options (thousands) | Weighted average remaining contractual life (years) | Weighted average exercise price | |||||||||||||||||
$39.02 to $55.00 |
689 | 2.55 | $ | 50.34 | ||||||||||||||||
$55.01 to $65.00 |
1,052 | 5.73 | $ | 62.31 | ||||||||||||||||
$65.01 to $68.12 |
1,687 | 8.53 | $ | 67.66 | ||||||||||||||||
Total stock options | 3,428 | 6.47 | $ | 62.54 |
Weighted average assumptions | 2023 | 2022 | ||||||||||||
Risk-free interest rate | 3.4 | % | 1.8 | % | ||||||||||
Expected volatility | 23.3 | % | 23.7 | % | ||||||||||
Expected dividend yield | 4.0 | % | 4.0 | % | ||||||||||
Expected life of the option (in years) | 6.8 | 6.3 | ||||||||||||
Exercise price | $ | 67.68 | $ | 68.12 |
Number of units (in thousands) | Sun Shares | DSUs | Total | |||||||||||||||||
Units outstanding December 31, 2023 |
4,945 | 618 | 5,563 | |||||||||||||||||
Units outstanding December 31, 2022 |
4,675 | 710 | 5,385 | |||||||||||||||||
Liability accrued as at December 31, 2023 |
$ | 233 | $ | 43 | $ | 276 | ||||||||||||||
Liability accrued as at December 31, 2022 |
$ | 188 | $ | 44 | $ | 232 |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
Compensation expense | $ | 164 | $ | 43 | ||||||||||
Income tax expense (benefit) | $ | (43) | $ | (9) |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
Compensation expense | $ | 309 | $ | 168 | ||||||||||
Income tax expense (benefit) | $ | (59) | $ | (49) |
19. Income Taxes |
As at December 31, | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Deferred tax assets(1) |
$ | 3,878 | $ | 3,466 | ||||||||||
Deferred tax liabilities(1) |
281 | 468 | ||||||||||||
Net deferred tax asset | $ | 3,597 | $ | 2,998 |
Investments |
Policy
liabilities(1)
|
Deferred acquisition costs |
Losses available for carry forward |
Pension and other employee benefits |
Other(2) |
Total | ||||||||||||||||||||||||||||||||||||||
As at December 31, 2022 | $ | 516 | $ | 1,716 | $ | 84 | $ | 986 | $ | 242 | $ | (546) | $ | 2,998 | ||||||||||||||||||||||||||||||
Acquisitions (disposals) through business combinations(3) |
13 | (9) | — | (42) | 8 | (117) | (147) | |||||||||||||||||||||||||||||||||||||
Charged to statement of operations | (564) | 849 | (5) | 67 | 49 | 489 | 885 | |||||||||||||||||||||||||||||||||||||
Charged to other comprehensive income | (68) | (18) | — | (30) | 38 | (23) | (101) | |||||||||||||||||||||||||||||||||||||
Charged to equity, other than other comprehensive income | 2 | (56) | — | 6 | — | 24 | (24) | |||||||||||||||||||||||||||||||||||||
Foreign exchange rate movements and Other | (1) | (3) | (3) | (11) | (10) | 14 | (14) | |||||||||||||||||||||||||||||||||||||
As at December 31, 2023 | $ | (102) | $ | 2,479 | $ | 76 | $ | 976 | $ | 327 | $ | (159) | $ | 3,597 |
(restated, see Note 2) | Investments |
Policy
liabilities(1)
|
Deferred acquisition costs |
Losses available for carry forward |
Pension and other employee benefits |
Other(2) |
Total | |||||||||||||||||||||||||||||||||||||
As at December 31, 2021 |
$ | (1,178) | $ | 1,727 | $ | 74 | $ | 853 | $ | 301 | $ | (251) | $ | 1,526 | ||||||||||||||||||||||||||||||
IFRS 17 and 9 transition adjustments | (857) | 2,037 | — | — | — | — | 1,180 | |||||||||||||||||||||||||||||||||||||
As at January 1, 2022 | (2,035) | 3,764 | 74 | 853 | 301 | (251) | 2,706 | |||||||||||||||||||||||||||||||||||||
Acquisitions (disposals) through business combinations(3) |
1 | 10 | — | 32 | 8 | (277) | (226) | |||||||||||||||||||||||||||||||||||||
Charged to statement of operations | 2,340 | (2,153) | 4 | (10) | (6) | (7) | 168 | |||||||||||||||||||||||||||||||||||||
Charged to other comprehensive income | 202 | 85 | — | 92 | (75) | — | 304 | |||||||||||||||||||||||||||||||||||||
Charged to equity, other than other comprehensive income | — | — | — | 15 | — | — | 15 | |||||||||||||||||||||||||||||||||||||
Foreign exchange rate movements and Other | 8 | 10 | 6 | 4 | 14 | (11) | 31 | |||||||||||||||||||||||||||||||||||||
As at December 31, 2022 | $ | 516 | $ | 1,716 | $ | 84 | $ | 986 | $ | 242 | $ | (546) | $ | 2,998 |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
(restated, see note 2) | ||||||||||||||
Current income tax expense (benefit): | ||||||||||||||
Current year | $ | 1,187 | $ | 781 | ||||||||||
Adjustments in respect of prior years, including resolution of tax disputes | 159 | (67) | ||||||||||||
Total current income tax expense (benefit) | 1,346 | 714 | ||||||||||||
Deferred income tax expense (benefit): | ||||||||||||||
Origination and reversal of temporary differences | (637) | (82) | ||||||||||||
Adjustments in respect of prior years, including resolution of tax disputes | (172) | 48 | ||||||||||||
Tax expense (benefit) arising from unrecognized tax losses | (25) | 18 | ||||||||||||
Tax rate and other legislative changes | (51) | (152) | ||||||||||||
Total deferred income tax expense (benefit) | (885) | (168) | ||||||||||||
Total income tax expense (benefit) | $ | 461 | $ | 546 |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
(restated, see note 2) | ||||||||||||||
Recognized in other comprehensive income: | ||||||||||||||
Current income tax benefit (expense) | $ | — | $ | 2 | ||||||||||
Deferred income tax benefit (expense) | (101) | 304 | ||||||||||||
Total recognized in other comprehensive income | (101) | 306 | ||||||||||||
Recognized in equity, other than other comprehensive income: | ||||||||||||||
Deferred income tax benefit (expense) | (24) | 15 | ||||||||||||
Total income tax benefit (expense) recorded in equity, including tax benefit (expense) recorded in Other comprehensive income | $ | (125) | $ | 321 |
For the years ended December 31, | 2023 | 2022 | ||||||||||||||||||
(restated, see note 2) | ||||||||||||||||||||
% | % | |||||||||||||||||||
Total net income (loss) | $ | 3,469 | $ | 3,080 | ||||||||||||||||
Add: Income tax expense (benefit) | 461 | 546 | ||||||||||||||||||
Total net income (loss) before income taxes | $ | 3,930 | $ | 3,626 | ||||||||||||||||
Taxes at the combined Canadian federal and provincial statutory income tax rate | $ | 1,091 | 27.8 | $ | 1,006 | 27.8 | ||||||||||||||
Increase (decrease) in rate resulting from: |
||||||||||||||||||||
Higher (lower) effective rates on income subject to taxation in foreign jurisdictions | (222) | (5.7) | (218) | (6.0) | ||||||||||||||||
Tax-exempt investment (income) loss | (304) | (7.7) | (128) | (3.5) | ||||||||||||||||
Adjustments in respect of prior years, including resolution of tax disputes | (13) | (0.3) | (19) | (0.5) | ||||||||||||||||
Tax (benefit) cost of unrecognized tax losses and tax credits | (25) | (0.7) | 18 | 0.5 | ||||||||||||||||
Tax rate and other legislative changes | (51) | (1.3) | (152) | (4.2) | ||||||||||||||||
Other | (15) | (0.4) | 39 | 0.9 | ||||||||||||||||
Total tax expense (benefit) and effective income tax rate | $ | 461 | 11.7 | $ | 546 | 15.0 |
20. Capital Management |
IFRS 17 and IFRS 9 | IFRS 4 and IAS 39 | |||||||||||||||||||
As at | December 31, 2023 | January 1, 2023 | December 31, 2022 | |||||||||||||||||
Subordinated debt | $ | 6,178 | $ | 6,676 | $ | 6,676 | ||||||||||||||
Innovative capital instruments(1) |
200 | 200 | 200 | |||||||||||||||||
Equity: | ||||||||||||||||||||
Preferred shares and other equity instruments | 2,239 | 2,239 | 2,239 | |||||||||||||||||
Common shareholders’ equity(2) |
21,343 | 20,290 | 25,211 | |||||||||||||||||
Equity in the participating account | 457 | 268 | 1,837 | |||||||||||||||||
Non-controlling interests’ equity | 161 | 90 | 90 | |||||||||||||||||
Contractual Service Margin(3) |
11,786 | 10,865 | ||||||||||||||||||
Total capital(3)(4) |
$ | 42,364 | $ | 40,628 | $ | 36,253 |
21. Segregated Funds |
Type of fund | % | ||||
Money market | 1 to 5 |
||||
Fixed income | 5 to 10 |
||||
Balanced | 40 to 45 |
||||
Equity | 45 to 50 |
As at | December 31, 2023 | December 31, 2022 | January 1, 2022 | |||||||||||||||||
Segregated and mutual fund units | $ | 107,239 | $ | 97,347 | $ | 107,277 | ||||||||||||||
Equity securities | 1,280 | 3,801 | 4,317 | |||||||||||||||||
Debt securities | 862 | 1,441 | 1,753 | |||||||||||||||||
Cash, cash equivalents and short-term securities | 4 | 181 | 264 | |||||||||||||||||
Investment properties | — | 271 | 226 | |||||||||||||||||
Mortgages | — | — | 1 | |||||||||||||||||
Other assets | 30 | 75 | 98 | |||||||||||||||||
Total assets | 109,415 | 103,116 | 113,936 | |||||||||||||||||
Less: Liabilities arising from investing activities | 4 | 963 | 19 | |||||||||||||||||
Total investments for account of segregated fund holders | $ | 109,411 | $ | 102,153 | $ | 113,917 |
For the years ended and as at December 31, |
2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Balance, beginning of year |
$ | 102,153 | $ | 113,917 | ||||||||||
Additions to segregated funds: | ||||||||||||||
Deposits | 11,510 | 11,542 | ||||||||||||
Net realized and unrealized gains (losses) | 3,995 | (15,359) | ||||||||||||
Other investment income | 7,854 | 4,029 | ||||||||||||
Total additions | 23,359 | 212 | ||||||||||||
Deductions from segregated funds: | ||||||||||||||
Payments to policyholders and their beneficiaries | 10,793 | 11,049 | ||||||||||||
Management fees | 687 | 697 | ||||||||||||
Taxes and other expenses | 49 | 43 | ||||||||||||
Foreign exchange rate movements | (76) | 187 | ||||||||||||
Total deductions | 11,453 | 11,976 | ||||||||||||
Net additions (deductions) | 11,906 | (11,764) | ||||||||||||
Dispositions (Note 3) | (4,648) | — | ||||||||||||
Balance, end of year |
$ | 109,411 | $ | 102,153 |
As at |
December 31, 2023 | December 31, 2022 | January 1, 2022 | |||||||||||||||||
Segregated and mutual fund units |
$ | 14,240 | $ | 15,723 | $ | 18,667 | ||||||||||||||
Equity securities |
2,908 | 4,450 | 5,646 | |||||||||||||||||
Debt securities |
1,427 | 1,417 | 1,657 | |||||||||||||||||
Cash, cash equivalents and short-term securities | 483 | 624 | 514 | |||||||||||||||||
Investment properties | — | 167 | 220 | |||||||||||||||||
Mortgages | 16 | 17 | 18 | |||||||||||||||||
Other assets | 45 | 55 | 43 | |||||||||||||||||
Total assets |
19,119 | 22,453 | 26,765 | |||||||||||||||||
Less: Liabilities arising from investing activities | 78 | (686) | 686 | |||||||||||||||||
Total investments for account of segregated fund holders | $ | 19,041 | $ | 23,139 | $ | 26,079 |
For the years ended and as at December 31, |
2023 | 2022 | ||||||||||||
Balance, beginning of year |
$ | 23,139 | $ | 26,079 | ||||||||||
Insurance finance (income) expenses | 1,793 | (2,353) | ||||||||||||
Foreign currency translation | (201) | (163) | ||||||||||||
Cash flows: | ||||||||||||||
Premiums received | 1,969 | 2,725 | ||||||||||||
Amounts paid to policyholders and other insurance service expenses paid | (2,583) | (2,310) | ||||||||||||
Management fees, taxes and other expenses | (822) | (839) | ||||||||||||
Total cash flows | (1,436) | (424) | ||||||||||||
Dispositions (Note 3) | (4,254) | — | ||||||||||||
Balance, end of year |
$ | 19,041 | $ | 23,139 |
For the years ended and as at December 31, | 2023 | 2022 | ||||||||||||
Net liabilities for remaining coverage: | ||||||||||||||
Balances, beginning of year |
$ | 23,139 | $ | 26,079 | ||||||||||
Insurance finance (income) expenses | 1,793 | (2,353) | ||||||||||||
Foreign currency translation | (201) | (163) | ||||||||||||
Total changes | 1,592 | (2,516) | ||||||||||||
Cash flows: | ||||||||||||||
Premiums received | 1,969 | 2,725 | ||||||||||||
Management fees, taxes and other expenses | (822) | (839) | ||||||||||||
Total cash flows | 1,147 | 1,886 | ||||||||||||
Expected investment component excluded from insurance revenue | (2,583) | (2,310) | ||||||||||||
Dispositions (Note 3) | (4,254) | — | ||||||||||||
Balances, liability for remaining coverage, end of year |
$ | 19,041 | $ | 23,139 | ||||||||||
Liability for incurred claims: | ||||||||||||||
Balances, beginning of year |
$ | — | $ | — | ||||||||||
Cash flows: | ||||||||||||||
Amounts paid to policyholders and other insurance service expenses paid | (2,583) | (2,310) | ||||||||||||
Total cash flows | (2,583) | (2,310) | ||||||||||||
Actual investment component excluded from insurance service expense | 2,583 | 2,310 | ||||||||||||
Balances, liability for incurred claims, end of year |
$ | — | $ | — | ||||||||||
Total net insurance contract liability: | ||||||||||||||
Balances, beginning of year |
$ | 23,139 | $ | 26,079 | ||||||||||
Insurance finance (income) expenses | 1,793 | (2,353) | ||||||||||||
Foreign currency translation | (201) | (163) | ||||||||||||
Total changes | 1,592 | (2,516) | ||||||||||||
Cash flows: | ||||||||||||||
Premiums received | 1,969 | 2,725 | ||||||||||||
Amounts paid to policyholders and other insurance service expenses paid | (2,583) | (2,310) | ||||||||||||
Management fees, taxes and other expenses | (822) | (839) | ||||||||||||
Total cash flows | (1,436) | (424) | ||||||||||||
Dispositions (Note 3) | (4,254) | — | ||||||||||||
Balances, total net insurance contract liability, end of year |
$ | 19,041 | $ | 23,139 |
22. Commitments, Guarantees and Contingencies |
For the years ended |
SLF Inc.(unconsolidated) | Sun Life Assurance (consolidated) |
Other subsidiaries of SLF Inc. (combined) |
Consolidation adjustments |
SLF Inc. (consolidated) |
|||||||||||||||||||||||||||
December 31, 2023 |
||||||||||||||||||||||||||||||||
Insurance revenue | $ | — | $ | 17,844 | $ | 5,055 | $ | (1,543) | $ | 21,356 | ||||||||||||||||||||||
Net investment income (loss) excluding result for segregated fund holders | 466 | 11,176 | 903 | (959) | 11,586 | |||||||||||||||||||||||||||
Fee income | 1 | 1,687 | 6,647 | (503) | 7,832 | |||||||||||||||||||||||||||
Other income | — | 169 | — | — | 169 | |||||||||||||||||||||||||||
Total revenue | $ | 467 | $ | 30,876 | $ | 12,605 | $ | (3,005) | $ | 40,943 | ||||||||||||||||||||||
Shareholders’ net income (loss) | $ | 3,165 | $ | 1,908 | $ | 1,084 | $ | (2,992) | $ | 3,165 | ||||||||||||||||||||||
December 31, 2022 |
||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||
Insurance revenue | $ | — | $ | 16,973 | $ | 3,147 | $ | (1,218) | $ | 18,902 | ||||||||||||||||||||||
Net investment income (loss) excluding result for segregated fund holders | 589 | (18,474) | (1,365) | (1,330) | (20,580) | |||||||||||||||||||||||||||
Fee income | 1 | 1,630 | 6,239 | (423) | 7,447 | |||||||||||||||||||||||||||
Total revenue | $ | 590 | $ | 129 | $ | 8,021 | $ | (2,971) | $ | 5,769 | ||||||||||||||||||||||
Shareholders’ net income (loss) | $ | 2,941 | $ | 1,603 | $ | 1,017 | $ | (2,620) | $ | 2,941 |
Assets and liabilities as at | SLF Inc.(unconsolidated) | Sun Life Assurance (consolidated) |
Other subsidiaries of SLF Inc. (combined) |
Consolidation adjustments |
SLF Inc. (consolidated) |
|||||||||||||||||||||||||||
December 31, 2023 |
||||||||||||||||||||||||||||||||
Invested assets | $ | 26,239 | $ | 164,557 | $ | 13,913 | $ | (30,381) | $ | 174,328 | ||||||||||||||||||||||
Reinsurance contract held assets | $ | — | $ | 5,858 | $ | 3 | $ | (67) | $ | 5,794 | ||||||||||||||||||||||
Insurance contract assets | $ | — | $ | 184 | $ | 637 | $ | (637) | $ | 184 | ||||||||||||||||||||||
Total other general fund assets | $ | 4,547 | $ | 13,302 | $ | 9,805 | $ | (3,171) | $ | 24,483 | ||||||||||||||||||||||
Investments for account of segregated fund holders | $ | — | $ | 128,396 | $ | 56 | $ | — | $ | 128,452 | ||||||||||||||||||||||
Insurance contract liabilities excluding those for account of segregated fund holders | $ | — | $ | 135,445 | $ | 291 | $ | (67) | $ | 135,669 | ||||||||||||||||||||||
Reinsurance contract held liabilities | $ | — | $ | 2,260 | $ | — | $ | (637) | $ | 1,623 | ||||||||||||||||||||||
Investment contract liabilities | $ | — | $ | 11,672 | $ | — | $ | — | $ | 11,672 | ||||||||||||||||||||||
Total other general fund liabilities | $ | 7,300 | $ | 15,041 | $ | 14,880 | $ | (5,596) | $ | 31,625 | ||||||||||||||||||||||
Insurance contract liabilities for account of segregated fund holders | $ | — | $ | 18,985 | $ | 56 | $ | — | $ | 19,041 | ||||||||||||||||||||||
Investment contract liabilities for account of segregated fund holders | $ | — | $ | 109,411 | $ | — | $ | — | $ | 109,411 | ||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||
Invested assets | $ | 25,851 | $ | 159,311 | $ | 12,322 | $ | (28,695) | $ | 168,789 | ||||||||||||||||||||||
Reinsurance contract held assets | $ | — | $ | 6,182 | $ | 3 | $ | (70) | $ | 6,115 | ||||||||||||||||||||||
Insurance contract assets | $ | — | $ | 75 | $ | 719 | $ | (719) | $ | 75 | ||||||||||||||||||||||
Total other general fund assets | $ | 6,594 | $ | 12,877 | $ | 14,570 | $ | (10,704) | $ | 23,337 | ||||||||||||||||||||||
Investments for account of segregated fund holders | $ | — | $ | 125,242 | $ | 50 | $ | — | $ | 125,292 | ||||||||||||||||||||||
Insurance contract liabilities excluding those for account of segregated fund holders | $ | — | $ | 130,908 | $ | 456 | $ | (70) | $ | 131,294 | ||||||||||||||||||||||
Reinsurance contract held liabilities | $ | — | $ | 2,322 | $ | — | $ | (719) | $ | 1,603 | ||||||||||||||||||||||
Investment contract liabilities | $ | — | $ | 10,728 | $ | 1 | $ | (1) | $ | 10,728 | ||||||||||||||||||||||
Total other general fund liabilities | $ | 9,916 | $ | 14,580 | $ | 18,886 | $ | (11,578) | $ | 31,804 | ||||||||||||||||||||||
Insurance contract liabilities for account of segregated fund holders | $ | — | $ | 23,089 | $ | 50 | $ | — | $ | 23,139 | ||||||||||||||||||||||
Investment contract liabilities for account of segregated fund holders | $ | — | $ | 102,153 | $ | — | $ | — | $ | 102,153 |
23. Related Party Transactions |
For the years ended December 31, | 2023 | 2022 | ||||||||||||||||||||||||
Executive team | Directors | Executive team | Directors | |||||||||||||||||||||||
Number of individuals | 12 | 11 | 13 | 11 | ||||||||||||||||||||||
Base salary and annual incentive compensation | $ | 26 | $ | — | $ | 19 | $ | — | ||||||||||||||||||
Additional short-term benefits and other | $ | 1 | $ | — | $ | 1 | $ | — | ||||||||||||||||||
Share-based long-term incentive compensation | $ | 28 | $ | 4 | $ | 32 | $ | 3 | ||||||||||||||||||
Value of pension and post-retirement benefits | $ | 2 | $ | — | $ | 2 | $ | — | ||||||||||||||||||
24. Pension Plans and Other Post-Retirement Benefits |
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Pension | Other post-retirement | Total | Pension | Other post-retirement | Total | |||||||||||||||||||||||||||||||||
Change in defined benefit obligations: | ||||||||||||||||||||||||||||||||||||||
Defined benefit obligation, January 1 | $ | 2,763 | $ | 206 | $ | 2,969 | $ | 3,836 | $ | 252 | $ | 4,088 | ||||||||||||||||||||||||||
Current service cost | 32 | 6 | 38 | 49 | 7 | 56 | ||||||||||||||||||||||||||||||||
Interest cost | 121 | 11 | 132 | 106 | 8 | 114 | ||||||||||||||||||||||||||||||||
Actuarial losses (gains) | 187 | 8 | 195 | (1,027) | (51) | (1,078) | ||||||||||||||||||||||||||||||||
Benefits paid | (138) | (15) | (153) | (194) | (14) | (208) | ||||||||||||||||||||||||||||||||
Divestiture |
(483) | — | (483) | — | — | — | ||||||||||||||||||||||||||||||||
Foreign exchange rate movement | 1 | (1) | — | (7) | 4 | (3) | ||||||||||||||||||||||||||||||||
Defined benefit obligation, December 31 | $ | 2,483 | $ | 215 | $ | 2,698 | $ | 2,763 | $ | 206 | $ | 2,969 | ||||||||||||||||||||||||||
Change in plan assets: | ||||||||||||||||||||||||||||||||||||||
Fair value of plan assets, January 1 | $ | 2,799 | $ | — | $ | 2,799 | $ | 3,643 | $ | — | $ | 3,643 | ||||||||||||||||||||||||||
Administrative expense | (1) | — | (1) | (1) | — | (1) | ||||||||||||||||||||||||||||||||
Interest income on plan assets | 125 | — | 125 | 101 | — | 101 | ||||||||||||||||||||||||||||||||
Return on plan assets (excluding amounts included in net interest expense) | 48 | — | 48 | (825) | — | (825) | ||||||||||||||||||||||||||||||||
Employer contributions | 69 | 15 | 84 | 85 | 14 | 99 | ||||||||||||||||||||||||||||||||
Benefits paid | (138) | (15) | (153) | (194) | (14) | (208) | ||||||||||||||||||||||||||||||||
Divestiture |
(510) | — | (510) | — | — | — | ||||||||||||||||||||||||||||||||
Foreign exchange rate movement | 1 | — | 1 | (10) | — | (10) | ||||||||||||||||||||||||||||||||
Fair value of plan assets, December 31 | $ | 2,393 | $ | — | $ | 2,393 | $ | 2,799 | $ | — | $ | 2,799 | ||||||||||||||||||||||||||
Amounts recognized on Statement of Financial Position: |
||||||||||||||||||||||||||||||||||||||
Fair value of plan assets | $ | 2,393 | $ | — | $ | 2,393 | $ | 2,799 | $ | — | $ | 2,799 | ||||||||||||||||||||||||||
Defined benefit (obligation) | (2,483) | (215) | (2,698) | (2,763) | (206) | (2,969) | ||||||||||||||||||||||||||||||||
Net recognized (liability) asset, December 31 | $ | (90) | $ | (215) | $ | (305) | $ | 36 | $ | (206) | $ | (170) | ||||||||||||||||||||||||||
Components of net benefit expense recognized: | ||||||||||||||||||||||||||||||||||||||
Current service cost | $ | 32 | $ | 6 | $ | 38 | $ | 49 | $ | 7 | $ | 56 | ||||||||||||||||||||||||||
Administrative expense | 1 | — | 1 | 1 | — | 1 | ||||||||||||||||||||||||||||||||
Net interest expense (income) | (4) | 11 | 7 | 5 | 8 | 13 | ||||||||||||||||||||||||||||||||
Other long-term employee benefit losses (gains) |
— | 3 | 3 | — | (6) | (6) | ||||||||||||||||||||||||||||||||
Net benefit expense | $ | 29 | $ | 20 | $ | 49 | $ | 55 | $ | 9 | $ | 64 | ||||||||||||||||||||||||||
Remeasurement of net recognized (liability) asset: | ||||||||||||||||||||||||||||||||||||||
Return on plan assets (excluding amounts included in net interest expense) |
$ | 48 | $ | — | $ | 48 | $ | (825) | $ | — | $ | (825) | ||||||||||||||||||||||||||
Actuarial gains (losses) arising from changes in demographic assumptions | (4) | — | (4) | 18 | — | 18 | ||||||||||||||||||||||||||||||||
Actuarial gains (losses) arising from changes in financial assumptions | (131) | (7) | (138) | 1,027 | 45 | 1,072 | ||||||||||||||||||||||||||||||||
Actuarial gains (losses) arising from experience adjustments | (52) | 2 | (50) | (18) | — | (18) | ||||||||||||||||||||||||||||||||
Foreign exchange rate movement | — | 1 | 1 | (1) | (3) | (4) | ||||||||||||||||||||||||||||||||
Components of defined benefit costs recognized in Other comprehensive income (loss) |
$ | (139) | $ | (4) | $ | (143) | $ | 201 | $ | 42 | $ | 243 |
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Canada % | UK % | U.S. % | Canada % | UK % | U.S. % | |||||||||||||||||||||||||||||||||
To determine defined benefit obligation at end of year: | ||||||||||||||||||||||||||||||||||||||
Discount rate for pension plans | 4.60 | n/a | 5.35 | 5.00 | 4.75 | 5.55 | ||||||||||||||||||||||||||||||||
Rate of compensation increase | 2.70 | n/a | n/a | 2.75 | n/a | n/a | ||||||||||||||||||||||||||||||||
Pension increases | 0.00-0.20 | n/a | n/a | 0.00-0.05 | 3.05 | n/a | ||||||||||||||||||||||||||||||||
To determine net benefit expense for year: | ||||||||||||||||||||||||||||||||||||||
Discount rate for pension plans | 5.00 | 4.75 | 5.55 | 3.00 | 1.90 | 3.00 | ||||||||||||||||||||||||||||||||
Rate of compensation increase | 2.75 | n/a | n/a | 2.80 | n/a | n/a | ||||||||||||||||||||||||||||||||
Pension increases | 0.00-0.05 | 3.05 | n/a | 0.00-0.05 | 3.30 | n/a | ||||||||||||||||||||||||||||||||
Health care trend rates: | ||||||||||||||||||||||||||||||||||||||
Initial health care trend rate | 5.08 | n/a | 6.75 | 5.16 | n/a | 7.00 | ||||||||||||||||||||||||||||||||
Ultimate health care trend rate | 4.00 | n/a | 5.00 | 4.00 | n/a | 5.00 | ||||||||||||||||||||||||||||||||
Year ultimate health care trend rate reached | 2040 | n/a | 2031 | 2040 | n/a | 2031 | ||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
Canada | UK | U.S. | Canada | UK | U.S. | |||||||||||||||||||||||||||||||||
Mortality rates: | ||||||||||||||||||||||||||||||||||||||
Life expectancy (in years) for individuals currently at age 65: | ||||||||||||||||||||||||||||||||||||||
Male | 24 | n/a | 22 | 23 | 23 | 22 | ||||||||||||||||||||||||||||||||
Female | 25 | n/a | 23 | 25 | 25 | 23 | ||||||||||||||||||||||||||||||||
Life expectancy (in years) at 65 for individuals currently at age 45: | ||||||||||||||||||||||||||||||||||||||
Male | 25 | n/a | 23 | 24 | 25 | 23 | ||||||||||||||||||||||||||||||||
Female | 26 | n/a | 25 | 26 | 27 | 25 | ||||||||||||||||||||||||||||||||
Average duration (in years) of pension obligation | 13.8 | n/a | 9.8 | 13.2 | 12.9 | 10.0 | ||||||||||||||||||||||||||||||||
Pension | Post-retirement benefits |
|||||||||||||
Interest/discount rate sensitivity:(1) |
||||||||||||||
1% decrease |
$ | 354 | $ | 21 | ||||||||||
1% increase |
$ | (287) | $ | (18) | ||||||||||
Rate of compensation increase assumption: | ||||||||||||||
1% decrease |
$ | (45) | n/a | |||||||||||
1% increase |
$ | 50 | n/a | |||||||||||
Health care trend rate assumption: | ||||||||||||||
1% decrease |
n/a | $ | (9) | |||||||||||
1% increase |
n/a | $ | 10 | |||||||||||
Mortality rates:(2) |
||||||||||||||
10% decrease |
$ | 49 | $ | 3 |
2023 | 2022 | |||||||||||||
Equity investments | 4 | % | 3 | % | ||||||||||
Fixed income investments | 77 | % | 65 | % | ||||||||||
Real estate investments | 12 | % | 11 | % | ||||||||||
Qualifying insurance contract | 0 | % | 15 | % | ||||||||||
Other | 7 | % | 6 | % | ||||||||||
Total composition of fair value of plan assets | 100 | % | 100 | % |
Pension | Post-retirement | Total | ||||||||||||||||||
Expected contributions for the next 12 months | $ | 47 | $ | 17 | $ | 64 |
2024 | 2025 | 2026 | 2027 | 2028 | 2029 to 2033 | |||||||||||||||||||||||||||||||||
Pension | $ | 128 | $ | 133 | $ | 138 | $ | 142 | $ | 148 | $ | 769 | ||||||||||||||||||||||||||
Post-retirement | 17 | 18 | 18 | 19 | 19 | 106 | ||||||||||||||||||||||||||||||||
Total | $ | 145 | $ | 151 | $ | 156 | $ | 161 | $ | 167 | $ | 875 |
25. Earnings (Loss) Per Share |
For the years ended December 31, | 2023 | 2022 | ||||||||||||
(restated, see Note 2) | ||||||||||||||
Common shareholders’ net income (loss) for basic earnings per share | $ | 3,086 | $ | 2,871 | ||||||||||
Add: Increase in income due to convertible instruments(1) |
10 | 10 | ||||||||||||
Common shareholders’ net income (loss) on a diluted basis | $ | 3,096 | $ | 2,881 | ||||||||||
Weighted average number of common shares outstanding for basic earnings per share (in millions) | 586 | 586 | ||||||||||||
Add: Dilutive impact of stock options(2) (in millions) |
— | — | ||||||||||||
Dilutive impact of convertible instruments(1) (in millions) |
3 | 3 | ||||||||||||
Weighted average number of common shares outstanding on a diluted basis (in millions) | 589 | 589 | ||||||||||||
Basic earnings (loss) per share | $ | 5.27 | $ | 4.90 | ||||||||||
Diluted earnings (loss) per share | $ | 5.26 | $ | 4.89 |
26. Accumulated Other Comprehensive Income (Loss) |
For the years ended December 31, | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(restated, see Note 2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
beginning
of year (restated, see Note 2)
|
Transition adjustment | Balance, beginning of year (adjusted) |
Other comprehensive income (loss) |
Other |
Balance, end of
year
|
Balance,
beginning
of year
|
Transition adjustment |
Balance,
beginning
of year (adjusted)
|
Other comprehensive income (loss) |
Balance, end of year |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Items that may be reclassified subsequently to income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized foreign currency translation gains (losses), net of hedging activities | $ | 1,630 | $ | 59 | $ | 1,689 | $ | (339) | $ | — | $ | 1,350 | $ | 953 | $ | — | $ | 953 | $ | 677 | $ | 1,630 | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on FVOCI assets | (1,333) | 494 | (839) | 485 | — | (354) | 266 | (116) | 150 | (1,483) | (1,333) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on cash flow hedges | (18) | — | (18) | 17 | — | (1) | (7) | — | (7) | (11) | (18) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share of other comprehensive income (loss) in joint ventures and associates | (107) | — | (107) | (44) | — | (151) | (47) | — | (47) | (60) | (107) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Items that will not be reclassified subsequently to income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remeasurement of defined benefit plans | (149) | — | (149) | (105) | 37 | (1) |
(217) | (320) | — | (320) | 171 | (149) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share of other comprehensive income (loss) in joint ventures and associates | (5) | — | (5) | 7 | — | 2 | (2) | — | (2) | (3) | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revaluation surplus on transfers to investment properties | 143 | — | 143 | — | — | 143 | 145 | — | 145 | (2) | 143 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 161 | $ | 553 | $ | 714 | $ | 21 | $ | 37 | $ | 772 | $ | 988 | $ | (116) | $ | 872 | $ | (711) | $ | 161 | ||||||||||||||||||||||||||||||||||||||||||||||
Total attributable to: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Participating account | $ | (3) | $ | — | $ | (3) | $ | 9 | $ | — | $ | 6 | $ | 2 | $ | — | $ | 2 | $ | (5) | $ | (3) | ||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interests | 4 | — | 4 | (3) | — | 1 | — | — | — | 4 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders | 160 | 553 | 713 | 15 | 37 | 765 | 986 | (116) | 870 | (710) | 160 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 161 | $ | 553 | $ | 714 | $ | 21 | $ | 37 | $ | 772 | $ | 988 | $ | (116) | $ | 872 | $ | (711) | $ | 161 |
Annual Information Form | Management's Discussion & Analysis(1) |
Consolidated Financial Statements and Notes(1) |
|||||||||
Corporate Structure | |||||||||||
Development of the Business | Section B |
||||||||||
Business of Sun Life | Section B |
||||||||||
Financial Performance | Section C |
Notes 8 – 13 |
|||||||||
Investments | Section I |
Note 5 |
|||||||||
Risk Management | Section K |
Note 6 |
|||||||||
Capital Structure | Section J |
Note 20 |
|||||||||
Dividends | Section J |
Note 14 |
|||||||||
Security Ratings | Section G |
||||||||||
Transfer Agents and Registrar | |||||||||||
Directors and Executive Officers | |||||||||||
Code of Conduct | |||||||||||
Principal Accountant Fees and Services | |||||||||||
Interests of Experts | |||||||||||
Regulatory Matters | Section B |
||||||||||
Risk Factors | |||||||||||
Legal and Regulatory Proceedings | |||||||||||
Additional Information | |||||||||||
Appendix A - Charter of the Audit Committee |
Abbreviation | Description | Abbreviation | Description | ||||||||
AIF | Annual Information Form | OSFI | Office of the Superintendent of Financial Institutions, Canada | ||||||||
Board | The Board of Directors of SLF Inc. | SEC | United States Securities and Exchange Commission | ||||||||
IFRS | International Financial Reporting Standards | Sun Life Assurance | Sun Life Assurance Company of Canada | ||||||||
LICAT | Life Insurance Capital Adequacy Test | SLF Inc. | Sun Life Financial Inc. | ||||||||
MD&A | Management's Discussion & Analysis | Superintendent | The Superintendent under the Office of the Superintendent of Financial Institutions Act | ||||||||
NAIC | National Association of Insurance Commissioners, United States |
Business Segment | Employees(1) |
||||
Canada | 7,508 | ||||
U.S. |
6,656 | ||||
Asset Management | 4,639 | ||||
Asia | 3,980 | ||||
Corporate(2) |
8,158 | ||||
Series | Number of Shares Issued |
TSX Ticker Symbol |
Quarterly Dividend ($) | Redemption Date | Prospectus Date | |||||||||||||||
Series 3 | 10,000,000 | SLF.PR.C | 0.278125 | Any time | January 6, 2006 | |||||||||||||||
Series 4 | 12,000,000 | SLF.PR.D | 0.278125 | Any time | October 2, 2006 | |||||||||||||||
Series 5 | 10,000,000 | SLF.PR.E | 0.28125 | Any time | January 25, 2007 | |||||||||||||||
Series 8R | 6,217,331 | SLF.PR.G | 0.114063 | June 30, 2025 | May 13, 2010 | |||||||||||||||
Series 9QR | 4,982,669 | SLF.PR.J | Floating | June 30, 2025 | May 13, 2010 | |||||||||||||||
Series 10R | 6,838,672 | SLF.PR.H | 0.185438 | September 30, 2026 | August 5, 2011 | |||||||||||||||
Series 11QR | 1,161,328 | SLF.PR.K | Floating | September 30, 2026 | August 5, 2011 | |||||||||||||||
Series 14 | 1,000,000 | n.a. | n.a. | June 30, 2026 | June 24, 2021 |
Common Shares | |||||||||||||||||||||||
Price ($) | Trading volume | ||||||||||||||||||||||
High | Low | Close | (thousands) | ||||||||||||||||||||
January | 66.86 | 62.69 | 66.86 | 30,988 | |||||||||||||||||||
February | 69.09 | 65.41 | 65.94 | 52,652 | |||||||||||||||||||
March | 67.64 | 60.01 | 63.14 | 64,271 | |||||||||||||||||||
April | 66.80 | 62.67 | 66.46 | 25,797 | |||||||||||||||||||
May | 67.93 | 63.99 | 65.75 | 61,262 | |||||||||||||||||||
June | 69.18 | 65.30 | 69.06 | 44,029 | |||||||||||||||||||
July | 70.11 | 66.53 | 69.40 | 28,331 | |||||||||||||||||||
August | 69.76 | 63.33 | 65.91 | 54,213 | |||||||||||||||||||
September | 68.60 | 65.30 | 66.27 | 36,006 | |||||||||||||||||||
October | 67.67 | 61.84 | 63.34 | 25,199 | |||||||||||||||||||
November | 70.17 | 63.15 | 68.52 | 46,125 | |||||||||||||||||||
December | 70.82 | 66.98 | 68.72 | 35,771 |
Class A Preferred Shares | |||||||||||||||||||||||||||||||||||||||||||||||
Series 3 | Series 4 | ||||||||||||||||||||||||||||||||||||||||||||||
Price ($) | Trading volume | Price ($) | Trading volume | ||||||||||||||||||||||||||||||||||||||||||||
High | Low | Close | (thousands) | High | Low | Close | (thousands) | ||||||||||||||||||||||||||||||||||||||||
January | 20.40 | 18.32 | 20.20 | 198 | 20.32 | 18.10 | 20.15 | 171 | |||||||||||||||||||||||||||||||||||||||
February | 20.42 | 19.04 | 19.04 | 44 | 20.35 | 19.01 | 19.01 | 89 | |||||||||||||||||||||||||||||||||||||||
March | 19.32 | 18.50 | 19.21 | 47 | 19.12 | 18.33 | 19.05 | 81 | |||||||||||||||||||||||||||||||||||||||
April | 19.33 | 18.86 | 19.15 | 100 | 19.19 | 18.68 | 19.17 | 82 | |||||||||||||||||||||||||||||||||||||||
May | 19.44 | 18.22 | 18.35 | 73 | 19.20 | 18.15 | 18.25 | 104 | |||||||||||||||||||||||||||||||||||||||
June | 18.75 | 17.49 | 17.85 | 43 | 18.42 | 17.57 | 17.83 | 105 | |||||||||||||||||||||||||||||||||||||||
July | 18.08 | 17.64 | 17.84 | 64 | 18.02 | 17.61 | 17.82 | 104 | |||||||||||||||||||||||||||||||||||||||
August | 17.86 | 16.37 | 16.37 | 157 | 17.88 | 16.53 | 16.64 | 169 | |||||||||||||||||||||||||||||||||||||||
September | 17.55 | 16.70 | 16.89 | 68 | 17.36 | 16.63 | 16.76 | 101 | |||||||||||||||||||||||||||||||||||||||
October | 17.35 | 16.53 | 17.04 | 82 | 17.26 | 16.60 | 16.99 | 127 | |||||||||||||||||||||||||||||||||||||||
November | 18.65 | 17.13 | 18.41 | 209 | 19.00 | 16.89 | 18.35 | 121 | |||||||||||||||||||||||||||||||||||||||
December | 18.70 | 17.58 | 18.33 | 116 | 18.54 | 17.59 | 18.17 | 164 | |||||||||||||||||||||||||||||||||||||||
|
|
Series 5 | Series 8R | ||||||||||||||||||||||||||||||||||||||||||||||
Price ($) | Trading volume | Price ($) | Trading volume | ||||||||||||||||||||||||||||||||||||||||||||
High | Low | Close | (thousands) | High | Low | Close | (thousands) | ||||||||||||||||||||||||||||||||||||||||
January | 20.55 | 18.27 | 20.31 | 85 | 13.70 | 12.84 | 13.59 | 276 | |||||||||||||||||||||||||||||||||||||||
February | 20.55 | 19.05 | 19.05 | 62 | 13.69 | 13.00 | 13.39 | 77 | |||||||||||||||||||||||||||||||||||||||
March | 19.30 | 18.57 | 19.23 | 98 | 13.37 | 12.14 | 12.56 | 65 | |||||||||||||||||||||||||||||||||||||||
April | 19.36 | 19.00 | 19.25 | 100 | 12.85 | 12.40 | 12.51 | 39 | |||||||||||||||||||||||||||||||||||||||
May | 19.51 | 18.55 | 18.67 | 201 | 12.85 | 12.20 | 12.22 | 119 | |||||||||||||||||||||||||||||||||||||||
June | 18.88 | 17.90 | 18.09 | 60 | 12.76 | 12.18 | 12.72 | 179 | |||||||||||||||||||||||||||||||||||||||
July | 18.31 | 17.85 | 17.99 | 92 | 13.02 | 12.72 | 13.02 | 140 | |||||||||||||||||||||||||||||||||||||||
August | 18.05 | 16.76 | 16.80 | 58 | 13.15 | 12.50 | 12.51 | 77 | |||||||||||||||||||||||||||||||||||||||
September | 17.61 | 16.72 | 16.96 | 79 | 13.25 | 12.20 | 13.21 | 110 | |||||||||||||||||||||||||||||||||||||||
October | 17.29 | 16.63 | 17.02 | 59 | 13.65 | 12.49 | 12.65 | 116 | |||||||||||||||||||||||||||||||||||||||
November | 18.80 | 17.15 | 18.55 | 122 | 14.80 | 12.50 | 14.29 | 153 | |||||||||||||||||||||||||||||||||||||||
December | 18.90 | 17.78 | 18.33 | 119 | 14.69 | 13.41 | 13.72 | 74 | |||||||||||||||||||||||||||||||||||||||
Series 9QR | Series 10R | ||||||||||||||||||||||||||||||||||||||||||||||
Price ($) | Trading volume | Price ($) | Trading volume | ||||||||||||||||||||||||||||||||||||||||||||
High | Low | Close | (thousands) | High | Low | Close | (thousands) | ||||||||||||||||||||||||||||||||||||||||
January | 16.09 | 15.00 | 15.49 | 37 | 16.25 | 15.11 | 15.85 | 17 | |||||||||||||||||||||||||||||||||||||||
February | 16.02 | 15.50 | 15.77 | 36 | 16.05 | 15.66 | 16.00 | 65 | |||||||||||||||||||||||||||||||||||||||
March | 15.78 | 14.71 | 14.85 | 57 | 16.00 | 14.60 | 14.81 | 36 | |||||||||||||||||||||||||||||||||||||||
April | 15.09 | 14.43 | 14.85 | 38 | 15.47 | 14.87 | 15.15 | 31 | |||||||||||||||||||||||||||||||||||||||
May | 14.74 | 14.14 | 14.20 | 56 | 15.35 | 14.99 | 15.01 | 68 | |||||||||||||||||||||||||||||||||||||||
June | 15.00 | 14.10 | 14.89 | 107 | 15.20 | 14.67 | 14.95 | 93 | |||||||||||||||||||||||||||||||||||||||
July | 15.68 | 14.65 | 15.33 | 87 | 15.53 | 14.62 | 15.40 | 28 | |||||||||||||||||||||||||||||||||||||||
August | 15.63 | 14.76 | 14.80 | 111 | 15.40 | 14.78 | 14.78 | 120 | |||||||||||||||||||||||||||||||||||||||
September | 14.75 | 14.00 | 14.70 | 89 | 15.45 | 14.56 | 15.40 | 62 | |||||||||||||||||||||||||||||||||||||||
October | 15.42 | 14.18 | 14.20 | 196 | 15.83 | 15.25 | 15.38 | 95 | |||||||||||||||||||||||||||||||||||||||
November | 15.88 | 14.19 | 15.75 | 76 | 18.33 | 15.38 | 18.32 | 180 | |||||||||||||||||||||||||||||||||||||||
December | 15.75 | 15.07 | 15.35 | 76 | 18.50 | 17.41 | 17.52 | 458 | |||||||||||||||||||||||||||||||||||||||
Series 11QR | |||||||||||||||||||||||||||||||||||||||||||||||
Price ($) | Trading volume | ||||||||||||||||||||||||||||||||||||||||||||||
High | Low | Close | (thousands) | ||||||||||||||||||||||||||||||||||||||||||||
January | 19.00 | 17.80 | 19.00 | 20 | |||||||||||||||||||||||||||||||||||||||||||
February | 20.09 | 19.00 | 20.09 | 3 | |||||||||||||||||||||||||||||||||||||||||||
March | 20.26 | 19.01 | 19.01 | 18 | |||||||||||||||||||||||||||||||||||||||||||
April | 19.10 | 19.00 | 19.00 | 7 | |||||||||||||||||||||||||||||||||||||||||||
May | 19.30 | 18.90 | 18.90 | 3 | |||||||||||||||||||||||||||||||||||||||||||
June | 19.10 | 18.90 | 19.10 | — | |||||||||||||||||||||||||||||||||||||||||||
July | 19.20 | 18.65 | 19.10 | 2 | |||||||||||||||||||||||||||||||||||||||||||
August | 19.85 | 19.10 | 19.10 | 1 | |||||||||||||||||||||||||||||||||||||||||||
September | 19.20 | 18.65 | 19.20 | 2 | |||||||||||||||||||||||||||||||||||||||||||
October | 19.75 | 19.20 | 19.35 | 5 | |||||||||||||||||||||||||||||||||||||||||||
November | 20.75 | 19.35 | 20.75 | 7 | |||||||||||||||||||||||||||||||||||||||||||
December | 21.56 | 20.54 | 20.54 | 4 |
Security Ratings | ||||||||||||||||||||||||||
A.M. Best(1) |
DBRS(2) |
Fitch(3) |
S&P(4) |
|||||||||||||||||||||||
Rating | Rank | Rating | Rank | Rating | Rank | Rating | Rank | |||||||||||||||||||
Subordinated Unsecured Debentures: | ||||||||||||||||||||||||||
Series 2007-1, 2019-1, 2020-1, 2020-2, 2021-1, 2021-2, 2021-3, 2022-1 and 2023-1 |
a- | 7 of 21 | A | 6 of 26 | A- | 7 of 21 | A | 6 of 22 | ||||||||||||||||||
Limited Recourse Capital Notes ("LRCNs"): | ||||||||||||||||||||||||||
Series 2021-1 | NR(5) |
- | A (low) | 7 of 26 | BBB |
9 of 21 | A- | 7 of 22 | ||||||||||||||||||
Class A Preferred Shares:
Series 3 - 5, 8R, 9QR, 10R
and 11QR
|
bbb+ | 8 of 21 | Pfd-2 (high) | 4 of 16 | BBB | 9 of 21 |
P-1(low)
/A-(6)
|
3 of 18/ 5 of 20(6)
|
Transfer Agent | |||||
Canada |
TSX Trust Company
301 - 100 Adelaide Street West
Toronto, Ontario
Canada M5H 4H1
|
||||
Co-Transfer Agents | |||||
United States |
Equiniti Trust Company, LLC
PO Box 860
Newark, NJ, 07101
United States
|
||||
United Kingdom |
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
United Kingdom
|
||||
Philippines |
Rizal Commercial Banking Corporation
RCBC Stock Transfer Processing Section
Ground Floor, West Wing
GPL (Grepalife) Building
221 Senator Gil Puyat Avenue
Makati City, Philippines
|
||||
Hong Kong |
Computershare Hong Kong Investor Services Limited
17th Floor, Hopewell Centre
183 Queen's Road East
Wanchai, Hong Kong
|
Name and
Province/State and Country of Residence
|
Principal Occupation |
Director Since | Board Committee Membership | ||||||||
Deepak Chopra
Ontario, Canada
|
Corporate Director | 2021 |
Audit
Governance, Investment & Sustainability
|
||||||||
Stephanie L. Coyles
Ontario, Canada
|
Corporate Director | 2017 |
Governance, Investment & Sustainability
Management Resources
|
||||||||
Ashok K. Gupta
London, England
|
Corporate Director | 2018 |
Management Resources
Risk
|
||||||||
M. Marianne Harris
Ontario, Canada
|
Corporate Director | 2013 |
Audit
Governance, Investment & Sustainability
|
||||||||
David H. Y. Ho
Shenzhen, China
|
Chairman and Founder, Kiina Investment Limited |
2021 |
Governance, Investment & Sustainability
Management Resources
|
||||||||
Laurie G. Hylton Massachusetts, U.S.A. |
Corporate Director | 2022 | Audit Risk |
||||||||
Helen M. Mallovy Hicks
Ontario, Canada
|
Corporate Director | 2021 |
Audit
Risk
|
||||||||
Marie-Lucie Morin
Ontario, Canada
|
Corporate Director | 2021 |
Management Resources
Risk
|
||||||||
Joseph M. Natale Ontario, Canada |
Corporate Director | 2023 |
Management Resources
Risk
|
||||||||
Scott F. Powers
Massachusetts, U.S.A.
|
Chair of the Board, SLF Inc. and Sun Life Assurance | 2015 | None |
||||||||
Kevin D. Strain
Ontario, Canada
|
President & Chief Executive Officer,
SLF Inc. and Sun Life Assurance
|
2021 | None | ||||||||
Barbara G. Stymiest
Ontario, Canada
|
Corporate Director | 2012 |
Audit
Risk
|
Name |
Province/State and
Country of Residence
|
Position | ||||||
Kevin D. Strain | Ontario, Canada | President & Chief Executive Officer | ||||||
Linda M. Dougherty | Ontario, Canada | Executive Vice-President, Chief Strategy and Enablement Officer | ||||||
Daniel R. Fishbein | Maine, USA | President, Sun Life U.S. | ||||||
Jacques Goulet | Ontario, Canada | President, Sun Life Canada | ||||||
Ingrid G. Johnson | Hong Kong, China | Vice-Chair, Strategic Partnerships |
||||||
Melissa J. Kennedy | Ontario, Canada | Executive Vice-President & Chief Legal and Public Policy Officer |
||||||
Laura A. Money | Ontario, Canada | Executive Vice-President, Chief Information and Technology Innovation Officer | ||||||
Thomas P. Murphy | Massachusetts, USA | Executive Vice-President and Chief Risk Officer | ||||||
Helena J. Pagano | Ontario, Canada | Executive Vice-President, Chief People and Culture Officer | ||||||
Stephen C. Peacher | Massachusetts, USA | President, SLC Management | ||||||
Manjit Singh(1) |
Ontario, Canada | Executive Vice-President & Chief Financial Officer | ||||||
Christopher B. Wei | Singapore | Executive Vice-President, Chief Client and Innovation Officer |
($ millions) | 2023 | 2022(1) |
|||||||||
Audit Services | 30.7 | 28.9 | |||||||||
Audit-Related Services | 1.5 | 1.5 | |||||||||
Tax Services | 1.7 |
0.0 | |||||||||
Other Services | 0.9 | 0.2 | |||||||||
(1) Adjustment to 2022 fees of $1.4 million for Audit Services |
Sun Life Financial Inc. | sunlife.com 52 |
Sun Life Financial Inc. | sunlife.com |
Sun Life Financial Inc. | sunlife.com |
Sun Life Financial Inc. | sunlife.com |
Sun Life Financial Inc. | sunlife.com |