Sun Life Financial Chief Executive Kevin Strain used Scotiabank’s 27th Annual Financials Summit on September 9 to reiterate the company’s medium-term financial targets and detail progress across its insurance and asset-management segments.
Sun Life said it is working toward a return on equity of more than 20%, up from 19.1% reported, and targeting annual earnings growth of 10%. The company aims to pay out 40% to 50% of earnings as dividends, implying roughly 10% annual dividend growth — Sun Life has raised its dividend for 11 consecutive years.
Strain described the firm’s structural shift as approaching completion after more than a decade. Sun Life entered the current cycle as an insurer that owned MFS; it now intends to run a balanced operation with a long-term target mix of 50% insurance and 50% asset management. Within asset management, Strain said the goal is an even split between public markets and alternatives.
The alternatives platform manages approximately USD 200 billion in assets. Sonny Kalsi, who leads the combined alternatives business, noted that management holds a 22% ownership stake in the platform and that about 1,500 clients are serviced across the alternative organizations. Strain set a target of 20% earnings growth within alternatives.
In Asia, the quarterly income run rate is around CAD 225 million, up from roughly CAD 100 million a year when Strain took over the region in 2012. Asia accounts for about 30% of the insurance segment and 20% of total company revenue. Sun Life is also moving to increase its ownership in Malaysia from 49% to 70%, pending regulatory approval, at a cost of a few hundred million Canadian dollars.
In the United States, the group benefits stop-loss business operates with a guidance margin of 7%. Strain said the company expects stop-loss to earn approximately 8% annually, or about 2% per quarter, consistent with its four-decade track record. He defended the business against a single underperforming quarter, saying one bad quarter out of ten does not reflect poorly on a sustainably profitable operation. Price increases have been close to 16% from 2024 to 2025 and again around 16% from 2025 to 2026. Full-year 2024 margin came in at about 6%.
On state dental contracts, Strain acknowledged a difficult environment for Medicare/Medicaid work at the state level. "Running a business with zero margin is not what I want to do," he said.
In Canada, the group retirement savings business manages about CAD 280 billion, and wealth assets tied to MFS total approximately CAD 25 billion. Strain expressed confidence in the MFS management team and warned against any change in investment style, given the five years of client performance already endured.
Sun Life also disclosed a CAD 1 billion line of credit with Scotiabank to provide seed capital for SLC Management. A Wilton Re transaction is expected to bring in approximately USD 10 billion in assets, with a mix of alternatives and longer-duration holdings.
Sun Life’s stock closed at CAD 110.55 on November 9, up 0.38, with a market capitalization of $44.3 billion. The shares carry a P/E ratio of 18.4 and posted a total return of 39.7% over the past year.
