Q3 2023 Sun Life Financial Inc Earnings Call

Speaker 1: you

Yes.

Speaker 2: Good morning and welcome to the Sun Life Financial Q3 2023 conference call. My name is Dilem and I'll be your conference operator today. All lines have been placed on mute to prevent any

Good morning, and welcome to the Sun Life Financial Q3, 2023 conference call. My name is the Lam and I'll be your conference operator today.

All lines have been placed on mute to prevent any background noise. The wholesale the call is David Garg Senior Vice President Capital Management and Investor Relations. Please go ahead Mr. Garg.

Speaker 2: The host of the call is David Garg, Senior Vice President, Capital Management and Investor Relations. Please go ahead.

Speaker 3: Thank you and good morning everyone. Welcome to Sun Life's earnings call for the third quarter of 2023. Our earnings release and the slides for today's call are available on the Investor Relations section of our website at sunlife.com. We will begin today's call with opening remarks from Kevin Strain, President and Chief Executive Officer.

Thank you and good morning, everyone welcome to Sun Life's earnings call for the third quarter of 2023.

Our earnings release and the slides for today's call are available on the Investor Relations section of our website at Sun life Dotcom.

We will begin today's call with opening remarks from Kevin strain, President and Chief Executive Officer.

Speaker 3: Following Kevin, Manjit Singh, Executive Vice President and Chief Financial Officer, will present the financial results for the quarter.

Following Kevin Magic thing Executive Vice President and Chief Financial Officer will present, the financial results for the quarter.

Speaker 3: After the prepared remarks, we will move to the question and answer portion of the call.

After the prepared remarks, we will move to the question and answer portion of the call.

Speaker 3: Other members of management are also available to answer your questions this morning.

Other members of management are also available to answer your questions. This morning.

Speaker 3: I draw your attention to the cautionary language regarding the use of forward-looking statements and non-IFRS financial measures which form part of today's remarks.

I draw your attention to the cautionary language regarding the use of forward looking statements and non <unk> financial measures, which form part of today's remarks.

Speaker 3: As noted in the slides, forward-looking statements may be rendered inaccurate by subsequent events. And with that, I will now turn to the next speaker.

As noted in the slides forward looking statements may be rendered inaccurate by subsequent events.

And with that I will now turn things over to Kevin.

Speaker 4: Thanks, David, and good morning, everyone. Turning to slide four, we delivered good performance during the quarter, reflecting our diversified business mix, our focus on execution, and the continued importance our clients put on health and financial security.

Thanks, David and good morning, everyone turning to slide four we delivered good performance during the quarter, reflecting our diversified business mix, our focus on execution and the continued important our clients put on health and financial security.

Speaker 4: We achieved solid underlying earnings for the quarter of $930 million, maintaining steady growth year-to-date. Our positive results this quarter are attributed to good performance in our Canadian group and wealth businesses, higher fee-related earnings in asset management, and favorable growth in Asia's individual protection business.

We achieved solid underlying earnings for the quarter of $930 million, maintaining steady growth year to date. Our positive results. This quarter are to be the good performance in our Canadian group and wealth businesses higher fee related earnings and asset management and favorable growth in Asia's individual protection business.

Speaker 4: Sun Life Canada achieved strong earnings this quarter, up 15% from the prior year, driven by strong investment results and improved disability experience. Sun Life Asia also had strong third quarter results, driven by individual insurance sales, which were up 60% year-over-year.

Sun Life, Canada achieved strong earnings this quarter up 15% from the prior year driven by strong investment results and improved disability experience.

Asia also had strong third quarter results driven by individual insurance sales, which were up 60% year over year.

Speaker 4: In Hong Kong, sales were four times higher than the prior year and over 50% higher than the previous quarter, supported by strong performance across our distribution channels.

In Hong Kong sales were four times higher than the prior year and over 50% higher than the previous quarter supported by strong performance across our business are our distribution channels.

Speaker 4: Earnings were down 19% from the prior year in our Sun Life US business, largely due to lower dental results. This was driven by faster than expected state Medicaid redeterminations associated with the end of the public health emergency, as well as continued investments in the Advantage Dental Plus business.

Earnings were down 19% from the prior year in our Sun life U S business, largely due to lower dental results.

This was driven by faster than expected state Medicaid redetermination associated with the end of the public health emergency as well as continued investment in the advantage dental plus business.

Speaker 4: Our total SLF assets under management now sit at $1.34 trillion, up 6% over last year.

Our total assets under management now sit at 1.34 trillion dollars up 6% over last year.

Speaker 4: In our asset management pillar, MFS and SLC continue to perform well despite challenging market conditions. SLC management fee-related earnings increased 17% driven by higher AUM, reflecting strong capital raising and deployment across the platform and the AAM acquisition.

In our asset management pillar, MFS and SLC continue to perform well despite challenging market conditions.

The management fee related earnings increased 17% driven by higher AUM, reflecting strong capital raising and deployment across the platform and the a M acquisition.

Speaker 4: MFS maintained healthy margins. Net outflows were driven by industry conditions. On a year-to-date basis, the flying contribution sales at MFS were up 14% compared to the prior year due to strong placement on consultant, advisor, and record-keeping platforms driving approximately $3 billion US in net inflows.

MFS maintained healthy margins net outflows were driven by industry conditions.

On a year to date basis defined contribution sales at MFS were up 14% compared to the prior year due to strong placement on consultant adviser and record keeping platforms driving approximately $3 billion U S in that inflows.

Speaker 4: We maintained an underlying ROE of 17.7% this quarter, approaching our medium-term financial objective of 18% plus, reflecting our disciplined capital management and sustained emphasis on capital light businesses.

We maintained an underlying ROE of 17, 7% this quarter approaching our medium term financial objective of 18% plus reflecting our disciplined capital management and sustained emphasis on capital light businesses. Further we made strong capital position with a light cat ratio of 147% for the quarter.

Speaker 4: Further, we maintain a strong capital position with a LIHCCAT ratio of 147% for the quarter.

Speaker 4: We also announced a three cent increase to our quarterly common share dividend and we're active on our share buyback program, demonstrating our commitment to returning capital to shareholders.

We also announced a <unk> <unk> increase to our quarterly commentary dividend and were active on our share buyback program, demonstrating our commitment to returning capital to shareholders.

Speaker 4: Turning to slide five, two years ago, we introduced our client impact strategy focused on six key areas, including people and culture, financial discipline, digital leadership, distribution excellence, sustainability, and a strong and trusted brand.

Turning to slide five two years ago, we introduced our client impact strategy focused on six key areas, including people and culture financial discipline.

Digital leadership distribution excellent sustainability, and a strong and trusted brand.

Speaker 4: All areas that we believe are critical to delivering on our purpose to help clients achieve lifetime financial security and live healthier lives.

All areas that we believe are critical to delivering on our purpose to help clients achieve lifetime financial security and live healthier lives.

Speaker 4: Over the past few months, we've refreshed our strategy to highlight our focus on trusted brand and our core values caring, authentic, bold, inspiring and impactful. And we link sustainability to our culture.

Over the past few months, we've refreshed our strategy to highlight our focus on trusted brand and our core values carrying authentic bold inspiring and impactful and we link sustainability to our culture.

Speaker 4: Further, we sharpen the emphasis of our strategic imperatives to highlight the importance of deeper client relationships.

Further we sharpened the emphasis of our strategic imperatives to highlight the importance of deeper client relationships thinking acting more like a digital company on leasing our talent and culture strategy and delivering value from our past M&A.

Speaker 4: thinking and acting more like a digital company, unleashing our talent and culture strategy, and delivering value from our path to M&A.

Speaker 4: all with the goal of realizing our ambition to be one of the best asset management and insurance companies in the world.

All with the goal of realizing our ambition to be one of the best asset management and insurance companies in the world.

Speaker 4: Turning to slide six, we continue to execute on our client impact strategy, as demonstrated by several key business initiatives delivered this quarter.

Turning to slide six we continue to execute on our client impact strategy as demonstrated by several key business initiatives delivered this quarter.

Speaker 4: Improving access to care and helping clients live healthier lives remains a top priority for us, and we are continuing to expand our health-oriented businesses in multiple markets.

Improving access to care and helping clients live healthier.

Live healthier lives remains a top priority for us and we are continuing to expand our health oriented businesses in multiple markets.

Speaker 4: This quarter, we were selected to move forward in the final stages of contact negotiations with the Government of Canada to be the administrator of the Canadian Dental Care Plan, which will provide access to dental care for Canadians in need. Through the plan, up to 9 million additional Canadians will have access to dental care.

This quarter, we were selected to move forward in the final stages of contract negotiations with the government of Canada to be the administrator of the Canadian dental care plan, which will provide access to dental care for Canadians in need.

Do the plan up to 9 million additional Canadians will have access to dental care.

Speaker 4: We are excited for the opportunity to expand our role in Canada's health ecosystem and to leverage the deep knowledge from our U.S. Dental Quest business to create a positive impact in our home market.

We're excited for the opportunity to expand our role in Kansas health ecosystem and to leverage the deep knowledge from our U S tender quest business to get a positive impact in our home market.

Speaker 4: In the U.S., we established a preferred partnership with Optimid 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 while also managing rising healthcare costs.

In the U S. We established a preferred partnership with optimism 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, while also managing rising health care costs.

Speaker 4: We are also continuing to make it easier for clients to access care and benefits through digital channels. In October , we completed the acquisition of Dialog, Canada's leading virtual health and wellness provider. Dialog provides access to quality, high-touch care to 50,000 organizations, representing nearly 2.8 million clients in Canada and internationally. Dialog will play a key role in delivering on our purpose for clients.

We are also continuing to make it easier for clients to access care and benefits through digital channels. In October we completed the acquisition of dialogue, Canada, leading virtual health and wellness provider.

Dialog provides access to quality high touch care to 50000 organizations, representing nearly $2 8 million clients in Canada and internationally.

I loved will play a key role in delivering on our purpose for clients.

Speaker 4: As an example, where dialogue is having an impact beyond Canada, last week we launched the Sun Life Health 360 app in the U.S., a digital front door to health and wellness support and resources for stop-loss members, including direct access to Health Navigator powered by Pinnacle Care Advisors.

As an example, we're dialogue is having an impact beyond Canada last week, we launched the Sun life's held 360 app in the U S. A digital front door to health and wellness support and resources for stop loss members, including direct access to health navigator powered by Pinnacle care advisers.

Speaker 4: The app was developed by dialogue in collaboration with the US and offers our US members the chance to enable access to valuable tools to manage and improve their health.

The App was developed by dialog in collaboration with the U S and and offers our U S members the chance to enable access to valuable tools to manage and improve their health and.

Speaker 4: In Asia, we increased our strategic investments in bow tie, Hong Kong's first virtual insurer with a leading market share of approximately 30% in Hong Kong's direct sales channel. Together Sun Life and Bow Tie are committed to making insurance affordable and accessible in our Asia market.

In Asia, we increased our strategic investments in bowtie, Hong Kong's first virtual insurer with a leading market share of approximately 30% in Hong Kong direct sale channel together Sun life in both higher committed to making insurance affordable and accessible in our Asia markets.

Speaker 4: Across the organization, we are doing more to think and act like a digital company. One example of this is that we are experimenting with several generative AI projects, including in our contact centers, and we were one of the first to pilot Amazon Bedrock on AWS. We are focused on opportunities to enhance our client impact through technologies like Gen AI. Microsoft Mechanics

Across the organization, we are doing more to think and act like a digital company. One example of this is that we are experimenting with several generative AI projects, including in our contact centers and we were one of the first two pilot Amazon bedrock on AWS, we are focused on opportunities to enhance our client impact through technologies like Gen AI.

Speaker 4: We're expanding our distribution capabilities through strategic partnerships and investments to deepen our impact. This quarter marked the start of our 15-year exclusive bank insurance partnership with Daxing Bank in Hong Kong, which had a strong start from a sales perspective.

We're expanding our distribution capabilities through strategic partnerships and investments to deepen our impact this quarter Mark the start of our 15 year exclusive bancassurance partnership with <unk> Bank in Hong Kong, which had a strong start from a sales perspective.

Speaker 4: In October , SLC Management entered into a strategic partnership with Scotiabank to distribute our alternative investment capabilities to the Canadian retail market through Scotiaglobal Wealth Management.

Tober SLC management entered into a strategic partnership with Scotiabank to distribute our alternative investment capabilities to the Canadian retail market to Scotia Global wealth management.

Speaker 4: Through this partnership, Canadian high net worth investors will gain access to our world-class alternative investment capabilities.

Through this partnership Canadian high net worth investors will gain access to our world class alternative investment capabilities.

Speaker 4: This strategic partnership, coupled with our recent acquisition of Advisor Asset Management, or AAM, positions us well to meet the growing demand for alternative assets through high net worth investors.

This strategic partnership coupled with our recent acquisition of advisor asset management or AAM positions us well to meet the growing demand for alternatives.

You have assets to high net worth investors.

Speaker 4: We continue to strengthen distribution across Sun Life, our affiliates and strategic partnerships to meet the investment needs of our clients.

We continue to strengthen distribution across Sun life, our affiliates and strategic partnerships to meet the investment needs of our clients.

We also continue to support the communities in which we operate in Canada, we expanded our partnership with spirit, North a national charitable organization committing $1 million in funding over three years to deliver physical health programs and address health inequities and underserved indigenous communities. We know this partnership will not only make a positive.

Impact on the physical health of youth, but also have a tremendous impact on their emotional and mental health too.

Speaker 4: This quarter, SLC management provided another round of funding against its $110 million commitment to support 24 First Nation communities with connections to the provincial electricity grid.

This quarter <unk> management provided another round of funding against its $110 million commitment to support 24 first nation communities with connections to the provincial electricity grid.

Speaker 4: to improve the quality of life of the residents and eliminate thousands and tons of annual greenhouse gas emissions.

To improve the quality of life of the residents and eliminate thousands of tons of annual greenhouse gas emissions.

Finally, I wanted to discuss a new role we have recently created over the past few years, we've seen the success and importance of strategic partnerships on business growth and on delivering on our purpose. We are also seeing more opportunities to leverage partnerships for all of our business lines globally.

To that end, we've created the new role of Vice chair of strategic partnerships reporting to me to leverage the global partnerships opportunities that are in front of us.

I've asked Ingo Johnson to take on this role Ingrid.

<unk> wealth of experience in global relationships.

In her relationship management skills her work and supporting several Asia strategic partnerships combined with her many years of Pinot leadership makes her an ideal leader to take on this executive role in.

Speaker 4: In the interim, Chris Wei, Manjit and I, along with Ingrid's support, will provide guidance and leadership to our team in Asia as I conduct a search for the new president of Asia, which I expect to announce over the next month or so.

In the interim Chris way manage it and I, along with Ingrid support will provide guidance and leadership to our team in Asia as I conduct a search for the new President of Asia, which I expect to announce over the next month or so.

Speaker 4: Despite a challenging external environment, our diversified mix of business continues to perform well, driven by our strategy and our people and culture. We remain focused on our purpose and executing our strategy, and this focus has served us well as we delivered positive results in the quarter. With that, I'll now turn the call over to Manju.

Despite a challenging external environment, our diversified mix of business continues to perform well driven by our strategy and our people and culture.

We remained focus on our purpose and executing our strategy and this focus has served us well as we delivered positive results in the quarter with that I'll now turn the call over to manager.

Speaker 4: Thank you, Kevin, and good morning, everyone. Let's begin on slide 8, which provides an overview of our third quarter results.

Thank you Kevin and good morning, everyone. Let's begin on slide eight which provides an overview of our third quarter results. We are pleased with our business results. This quarter underlying net income of $930 million and underlying earnings per share of $1 59 were in line with prior year results, excluding the impact from the sale of the UK business.

Speaker 5: We are pleased with our business results this quarter. Underlying that income of $930 million and underlying earnings per share of $1.59 were in line with prior year results, excluding the impact from the sale of the UK business.

Speaker 5: Underlying ROE of 17.7% was strong, underpinned by our diverse and attractive businesses in wealth and asset management, group health and protection, and individual protection.

Underlying ROE of 17, 7% with strong underpinned by our diverse and attractive businesses and wealth and asset management group of health and protection and individual protection.

Speaker 5: Wealth and asset management underlying earnings comprise 44% of total Q3 underlying earnings and were up 9% from the prior year.

Wealth and asset management underlying earnings comprised 44% of total Q3 underlying earnings are up 9% from the prior year.

Speaker 5: This is driven by higher investment income reflecting volume growth and higher yields, as well as an increase in fee-related earnings in our asset management business.

This was driven by higher investment income, reflecting volume growth and higher yields as well as an increase in fee related earnings and our asset management businesses.

Speaker 5: Group health and protection businesses comprised 27% of Q3 underlying earnings and grew 1% year over year. Strong revenue growth across all group businesses and better disability experience in Canada was largely offset by less favorable experience in the U.S.

Group Health and protection businesses comprised 27% of Q3 underlying earnings and grew 1% year over year strong revenue growth across all group businesses and better disability experience in Canada was largely offset by less favorable experience in the U S.

Speaker 5: Individual protection earnings comprise 29% of underlying earnings and decline 3% year-over-year, driven by the sale of our UK business and lower investment results in the US, largely offset by strong business growth in Asia.

Individual protection earnings comprised 29% of underlying earnings and declined 3% year over year, driven by the sale of our UK business and lower investment results in the U S largely offset by strong business growth in Asia.

Speaker 5: New business CSM of 370 million more than doubled from the prior year, reflecting strong sales results in Hong Kong, international high net worth and Canada.

New business TSM at $370 million more than doubled from the prior year, reflecting strong sales results in Hong Kong International High net worth and Canada.

Speaker 5: Total CSM grew 11% year over year, primarily driven by organic CSM growth, reflecting strong sales results.

Total <unk> grew 11% year over year, primarily driven by organic.

<unk> growth, reflecting strong sales results.

Speaker 5: Reported net income for the quarter was $871 million, up from $111 million in the prior year.

Reported net income for the quarter was $871 million up from $111 million in the prior year.

Speaker 5: The difference between underlying reported earnings this quarter of $59 million largely reflects a top-up in the SLC put liability, DentiQuest integration costs and amortization of intangibles, partially upset by favorable market-related impacts and positive ACMA.

The difference between underlying and reported earnings this quarter of $59 million largely reflects a top up and the SLC put liability <unk> integration costs and amortization of intangibles, partially offset by favorable market related impacts and positive akamai.

Speaker 5: The favorable market-related impact was primarily driven by interest rates partially offset by unfavorable real estate experience.

The favorable market related impact was primarily driven by interest rates, partially offset by unfavorable real estate experience.

Speaker 5: The favorable impact from interest rates this quarter was largely due to a less inverted yield curve. As we discussed last quarter, given our current positioning, as the yield curve normalizes, we expect to see favorable interest-related market impacts in reported net income.

The favorable impact from interest rates this quarter was largely due to a less inverted yield curve as.

As we discussed last quarter, given our current positioning as the yield curve normalizes, we expect to see favorable industry related market impacts and reported net income.

Speaker 5: Real estate experience reflects a relatively flat return in the current quarter versus our long-term expectations of approximately 2% per quarter. We are long-term investors in real estate and continue to view this asset class as a key component of our diversified investment portfolio.

Real estate experience reflects a relatively fat returned the current quarter versus our long term expectations of approximately 2% per quarter. We are long term investment for investors in real estate and continue to view this asset class as a key component of our diversified investment portfolio.

Speaker 5: Over the last 10 years, our North American real estate portfolio has generated annualized total returns of over 9%, well above our current long-term expectations.

Over the last 10 years, our North American real estate portfolio has generated annualized total returns of over 9% well above our current long term expectations.

Speaker 5: In Q3, we also conducted our annual actuarial review of assumptions and method changes. This review resulted in relatively neutral impacts of positive 35 million to report net income and negative 43 million pre-tax to CSM.

In Q3, we also conducted our annual actuarial review of assumptions and method changes. This review resulted in relatively neutral impacts of positive $35 million to report net income and negative $43 million pretax to CSM.

Speaker 5: Our balance sheet and capital position remains strong. This provides us with financial flexibility to execute an attractive business opportunities and resilience to absorb potential impacts of all the top market conditions.

Our balance sheet and capital position remains strong this provides us with financial flexibility to execute on attractive business opportunities and resilience to absorb potential impacts of volatile market conditions.

Speaker 5: SLF lockout of 147% declined one point from the prior quarter, a strong organic capital generation was offset by capital deployment.

As I left like kind of a 147% declined one point from the prior quarter, our strong organic capital generation was offset by capital deployments.

Speaker 5: Capital deployments in the quarter led to a four-point decline in LIHCAP, driven by net sub-debt redemption of $500 million, repurchase of 2.8 million shares, and the close of the Dawson Bank Strudens Agreement.

Capital deployments in the quarter that to a four point decline in Leichhardt driven by net sub debt redemption of 500 million repurchase of two 8 million shares and the close of the dosing <unk> agreement.

Speaker 5: whole-core cash remains strong at 1.4 billion and a leverage ratio remains low at 22%. We continue to expect strong capital generation of 25 to 30% of underlying earnings over the medium term after payment of common share dividends and investments in organic business growth.

<unk> cash remains strong at $1 4 billion and our leverage ratio remains low at 22%.

We continue to expect strong capital generation of 25% to 30, 30% of underlying earnings over the medium term after payment of common share dividends and investments in organic business growth.

Speaker 5: Now let's turn to our Business Group performance, starting on slide 10 with MFS.

Now, let's turn to our business group performance, starting on slide 10 with MFS.

Speaker 5: MFS underlying net income of US $207 million was down 2% from the prior year as an increase in variable compensation was partially offset by higher ANA and increased investment income.

MFS underlying net income of U S $207 million was down 2% from the prior year as an increase in variable compensation was partially offset by higher G&A and increased investment income.

Speaker 5: Reported net income of US $212 million was down 12% year-over-year, driven by the fair value change in shares owned by MFS management.

Reported net income of <unk> $212 million was down 12% year over year, driven by the fair value change in shares owned by MFS management.

Speaker 5: AUM of $556 billion was down 6% from the prior quarter driven by declines in global equity markets and net outflows. And pre-TexNet operating margin 41% was in line with the prior year.

AUM of 556 billion was down 6% from the prior quarter driven by declines in global equity markets and net outflows and pre tax net operating margin of 41% was in line with the prior year.

Speaker 5: Retail net outflows were U.S. $3.7 billion in institutional and institutional outflows were $5.6 billion, driven by the continued impact of higher interest rates and active management flows. MFS continues to outperform its peers with lower relative net outflows.

Retail net outflows were U S $3 7 billion in institutional and retail and institutional outflows were $5 6 billion driven by the continued impact of higher interest rates on active management flows MFS.

MFS continues to outperformance peers with lower relative net outflows.

Speaker 5: Turning to slide 11, SLC management generated fee-related earnings of $68 million, up 17% here.

Turning to slide 11, SLC management generated fee related earnings of $68 million up 17% year.

Speaker 5: The increase reflects good capital raising and deployment of capital into fee-earning AUM over the past year, as well as the AAM acquisition.

The increase reflects good capital raising and deployment of capital into fee, earning AUM over the past year as well as the <unk> acquisition.

Speaker 5: Underlying that income of $53 million, it was up $25 million.

Underlying net income of $53 million was up $25 million.

Speaker 5: was up from $25 million last year, driven by higher fee-related earnings, a lower tax rate, and a non-recurrence of one-time expense.

It was up from 25 million last year, driven by higher fee related earnings a lower tax rate and the non recurrence of onetime expenses.

Speaker 5: reported net loss at SLC Mansion was $16 million, primarily driven by an increase in the liabilities to buy up the remaining ownership and SLC affiliate.

Reported net loss at SLC management was $16 million, primarily driven by an increase in the liabilities to buy out the remaining ownership in SLC affiliates.

Speaker 5: We undertake a detailed review of the estimated liabilities in the third quarter of the year, and this quarter's results reflect the top of a 42 million.

We undertake a detailed review of the estimated liabilities in the third quarter of the year and this quarter's results reflect a top of a $42 million.

Speaker 5: Capital raising of $3.2 billion increased over the prior quarter, driven by strong demand for public debt at SLC fixed income and for real estate debt at BGO.

Capital raising of $3 2 billion increased over the prior quarter driven by strong demand for public tech as SLC fixed income and for real estate debt at <unk>.

Speaker 5: Total AUM of $219 billion was up 5% year over year. This includes $21 billion that is not yet earning fees.

Total AUM of 219 billion was up 5% year over year. This includes $21 billion that is not yet earning fees. Once invested these assets are expected to generate annualized three earnings fee revenue of more than $180 million.

Speaker 5: Once invested, these assets are expected to generate annualized free revenue of more than 180 million.

Speaker 5: Turning to slide 12, Canada underlying that income of $338 million was driven by strong disability experience and higher investment income.

Turning to slide 12, Canada underlying net income of $338 million was driven by strong disability experience and higher investment income reported net.

Speaker 5: reported net income of $365 million was up year over year due to favorable market-related impact.

Net income of $365 million was up year over year due to favorable market related impacts.

Speaker 5: Wealth and asset management underlying earnings were up 14% on increased investment income from higher volumes and yields.

Wealth and asset management underlying earnings were up 14% on increased investment income from higher volumes and yield.

Speaker 5: Group health and protection underlying earnings increased 33% driven by favorable disability experience reflecting higher margins and lower claims as we continue to realize the benefits of our management and pricing action.

Group Health and protection underlying earnings increased 33% driven by favorable disability experience, reflecting higher margins and lower claims as we continue to realize the benefits of our management and pricing actions.

Speaker 5: Individual protection was modestly lower year over year on lower investment contributions.

Individual protection was modestly lower year over year on lower investment contribution.

Speaker 5: Both group and individual businesses posted strong sales growth. Group sales were up 4% on higher health sales, while individual sales were up 24% due to higher part life sales.

Both group and individual businesses posted strong sales growth group sales were up 4% on higher house sales, while individual sales were up 24% due to higher par lifestyles.

Speaker 5: Turning to slide 13, U.S. underlying net income of U.S. $140 million was down 19 percent from last year, while reported net income of U.S. $105 million was up 9 percent year over year.

Turning to slide 13 U S underlying net income of U S $140 million was down 19% from last year, while our reported net income of <unk> $105 million was up 9% year over year.

Speaker 5: Group health and protection underlying earnings were down year over year as strong revenue growth was more than offset by less favorable experience.

Group Health and protection underlying earnings were down year over year as strong revenue growth was more than offset by less favorable experience.

Speaker 5: Dental results this quarter included the impact from Medicaid redeterminations and start-off costs from the expansion of Advantage dental plus practice.

Dental results. This quarter included the impact from Medicaid Redetermination and startup costs from the expansion of advantaged dental plus practices.

Speaker 5: The industry has anticipated the wind down of the public health emergency that was established during COVID and the related impact from Medicaid's redetermination.

The industry is anticipate the wind down of the public health emergency that was established during COVID-19 and the related impact from Medicaid Redetermination.

Speaker 5: While the pace of roll-offs and redeterminations have been faster than our assumptions, we expect the total impact on membership and revenues to remain largely in line with our expectations.

While the pace of rollout some redetermination had been faster than our assumptions, we expect the total impact on membership and revenues remained largely in line with our expectations.

Speaker 5: For Q3, this led to lower volumes and higher loss and expense ratios. Looking forward, we expect the incremental revenues from our sales pipelines to more than offset the impacts of the Medicaid redetermination process. Therefore, we expect good revenue growth in 2024.

For Q3, this led to lower volumes and higher loss and expense ratios looking forward, we expect the incremental revenues from our sales pipelines to more than offset the impact from the Medicaid Redetermination process. Therefore, we expect good revenue growth in 2024.

Speaker 5: We remain very pleased with the performance of the Dental Quest acquisition.

We remain very pleased with the performance of the <unk> acquisition.

Speaker 5: We are a leading player in the industry, have strong business momentum, are on track with our integration milestones and are confident that we will achieve our synergy target.

We are a leading player in the industry have strong business momentum are on track with our integration milestones and are confident that we will achieve our synergy targets.

Speaker 5: The group benefits business had strong revenue growth driven by solid premium growth, higher fee income, and good margins. This is offset by less favorable morbidity experience.

The group benefits business had strong revenue growth driven by solid premium growth higher fee income and good margins.

It's offset by less favorable morbidity experience.

Speaker 5: US morbidity experience in the corridor remained favorable, reflecting strong group disability and stop loss results partially upset by unfavorable dental experience.

U S morbidity experienced in the quarter remained favorable reflecting strong group disability in stop loss results, partially offset by unfavorable dental experience.

Speaker 5: Individual protection results declined year-over-year, reflecting lower investment contributions this quarter.

Individual protection results declined year over year, reflecting investment contributions, reflecting lower investment contributions this quarter.

Speaker 5: U.S. group sales of 179 million were down 36% year-over-year, reflecting lower dental Medicaid sales, which are lumpy in nature as they are linked to the timing of government contracts, partially offset by higher commercial dental sales.

U S group sales of 179 million, so 179 million were down 36% year over year, reflecting lower dental Medicaid sales, which are lumpy in nature as they are linked to the timing of government contracts, partially offset by higher commercial dental sales.

Speaker 5: Slide 14 outlines Asia's results for the quarter. Underlying that income of 166 million was up 7% year-over-year on a constant currency base.

Slide 14 outlines Asia's results for the quarter.

Underlying net income of $166 million was up 7% year over year on a constant currency basis.

Speaker 5: Reported net income of $211 million was well above underlying income, largely reflecting favorable interest-related market impacts and positive ACMA.

Reported net income of $211 million was well above underlying income largely largely reflecting favorable interest related market impacts and positive akamai.

Speaker 5: New business TSM for Asia was very strong at $238 million, up 193% from the prior year.

New business DSM for Asia was very strong at $238 million up 193% from the prior year.

Speaker 5: Individual protection earnings were up 25% year over year on a constant currency basis, reflecting business growth from strong sales over the past year, improved mortality and contributions from our joint ventures.

Individual protection earnings were up 25% year over year on a constant currency basis, reflecting business growth from strong sales over the past year improved mortality improved mortality and contributions from our joint ventures.

Speaker 5: Individual protection sales were up 57%, primarily driven by strong sales growth in Hong Kong and high net worth. Hong Kong's sales also benefited from the strong start of our bank insurance agreement with Da Sing. In closing, we are...

Individual protection sales were up 57%, primarily driven by strong sales growth in Hong Kong and high net worth.

<unk> sales also benefited from the strong start of our Bancassurance agreement with <unk>.

In closing we are pleased with our results this quarter.

Speaker 5: We've maintained strong sales momentum in individual protection. We generated very strong new business CSM and total CSM is up 11% year over year.

We maintained strong sales momentum and individual protection.

We generated very strong new business CSM and total CSM CSM is up 11% year over year.

Speaker 5: Group results in both Canada and the U.S. continue to benefit from our leading capabilities and proactive management actions which drove favorable experience.

Group results in both Canada, and the U S continued to benefit benefit from our leading capabilities and proactive management actions, which drove favorable experience.

Speaker 5: Our asset management businesses continue to deliver good long-term investment performance and are well positioned for growth as markets normalize. Our capital position is strong and we continue to generate peer-leading ROE. With that, I'll turn the call back to David for Q&A.

Our asset management businesses continue to deliver good long term investment performance and are well positioned for growth as markets normalize our capital position is strong and we continue to generate peer leading Roe.

With that I'll turn the call back to David for Q&A.

Speaker 3: Thank you, Manjit. To help ensure that all our participants have an opportunity to ask questions this morning, please limit yourself to one or two questions and then re-queue with any additional questions. I will now ask the operator to poll the participants.

Thank you mandate to help ensure that all our participants have an opportunity to ask questions. This morning, Please limit yourself to one or two questions and then re queue with any additional questions I will now ask the operator to poll the participants.

Thank you Sir.

Speaker 2: As a reminder to ask a question, you will need to press star 1 1 on your telephone to withdraw your question. Please press start 1 1 again.

As a reminder to ask a question you will need to press star one on your telephone.

Your question. Please press star one again.

Please standby, while we compile the Q&A roster.

Speaker 6: And I show our first question comes from the line of Tom McKinnon from BMO Capital. Please go ahead. Yeah, thanks very much. Good morning. First question is just with respect to the LIHTCAT being better than anticipated. And you mentioned

And I show. Our first question comes from the line of Tom Mackinnon from BMO capital. Please go ahead.

Yeah, Thanks, very much good morning.

First question is just with respect to the.

The light cat being better than anticipated and you mentioned four points that.

I would have heard it.

From net debt and some other.

Other deployments buybacks the same thing.

So it's.

But to light cat was actually only down.

One point quarter over quarter. So are we to sort of infer that there could have been at least you've mentioned strong capital generation as it looked like it's probably in the areas you know.

Three points or so of capital like.

<unk> capital that was attributable to capital being generated in the quarter.

And if so it seems to be a little bit better than you were 25% to 30%.

Kind of medium term target and I have a follow up thanks.

Speaker 5: Good morning Tom, it's Manjit. As I mentioned in my prepared remarks, our general view is that over the medium term, we expect to generate 25-30% of underlying earnings as organic capital. And that really reflects the portfolio of attractive capolite businesses that we've built over time.

So good morning, Thomas mentioned right as I mentioned my prepared remarks, our general view is that over the medium term, we expect to generate 25% to 30% of underlying earnings as organic capital and that really reflects the portfolio of attractive capital light businesses that we've built over time now.

Speaker 5: Now that amount will bump around quarter over quarter depending on things like new levels of business as well as market conditions.

That amount will bump around quarter over quarter, depending on things like new levels of business and as well as market conditions and Youre correct for this correct.

Speaker 5: And to correct, for the current quarter, we had about three LIHTCAT points, or approximately 600 million of organic capital generation in the quarter. And that was above our target that I mentioned previously. And that was really driven by good underlying earnings and group health and protection, Asia individual protection.

The current quarter, we had about three <unk> points or approximately $600 million of organic capital generation in the quarter and that was well above our target that I mentioned previously and that was really driven by good underlying earnings and group Health and protection Asia individual protection solid asset management earnings as well as strong new business CSM. So overall, we feel.

Speaker 6: solid asset management earnings, as well as strong new business CSM. So overall, we feel very good about the capital generation this quarter. That $600 million is before payment of the...

Good about the capital generation this quarter.

And that $600 million before payment of the common dividend correct.

Yes.

Yeah, Okay, and then just as a follow up for Kevin I think in your prepared market Mark.

Speaker 6: In your prepared remarks, Kevin, you mentioned changes in management with respect to

Remarks, Kevin you mentioned changes in management with respect to Ingrid responsibilities did I hear that correctly.

I'm just wondering.

Asia is on fire here in terms of some of your great sales in CSM growth and why make a change in management there.

Speaker 4: You did hear correctly and Tom, we increasingly see partnerships being an important part of what we're trying to do globally and creating those connections and Ingrid is well suited for that. Asia is on fire and our intention is to be a part of what we're trying to do globally.

You did hear correctly and Tom we increasingly see partnerships being an important part of what we're trying to do globally and creating those connections and Ingrid is well suited for that.

Asia is on fire and our intention is to keep it on fire and to keep it moving in the right direction.

Speaker 4: to keep it on fire and to keep it moving in the right direction. You would have seen that I mentioned that

Would have seen that I mentioned that that Chris mentioned and I will be leaning into Asia over the next few weeks as we get ready to appoint a successor to Ingrid there Chris is based in Singapore. So he is going to be looking after the ASEAN countries. He also sits on our joint venture board in China. So he is going to be leaning into China.

Speaker 4: that Chris, Manjin and I will be leaning into Asia over the next few weeks as we get ready to appoint the successor to Ingrid there. Chris is based in Singapore, so he's going to be looking after the ASEAN countries. He also sits on our joint venture board.

Speaker 4: in China, so he's going to be leading into China. The manget is on our...

To manage it is on our joint venture Board in India, and taking responsibility for India and in the interim and then.

Speaker 4: Joint Venture Board in India and taking responsibility for India in the interim. And then I'm, as you know, I spent many years in Asia.

Spent many years in Asia, not just running Asia, but as CFO and now as CEO and I'll be leading into our hubs business, which is Hong Kong, Singapore Bermuda.

Speaker 4: not just running Asia, but as CFO and now as CEO , and I'll be leading into our hubs business which is Hong Kong, Singapore, Bermuda.

Speaker 4: as well as the regional office and we're working with Ingrid on that. So I don't think that this is going to

As well as the regional office in them, we're working with angered on that so I don't think that this is going to.

Speaker 4: slow us down at all. In fact, it's about accelerating the company's growth through global partnerships, but also in Asia.

Slow us down at all in fact, it's about accelerating the company's growth.

Two global partnerships, but also in Asia.

Speaker 5: Sorry, Tom, just on your previous question, the 600 million was net of dividends, just to confirm that.

I'm sorry, Tom just on your previous question.

The 600 million was net of dividends just to just to confirm that.

Speaker 6: Yes, yeah, that's right. Yes, correct. Yeah. So if we wanted to look at the.

Yes, yes, that's right, yes correct.

If we wanted to look at.

Before payment of the dividend it would've been higher I assume then correct exactly right, yes, okay. Okay, great and then sorry just.

Speaker 6: Okay, great. And then, sorry, just is the look internal or X?

Is that look internal or external in terms of someone to.

Speaker 4: We have a list of both internal and external candidates. As I said, I expect to have an announcement in the next month or so. There is an advantage to Asia from an internal candidate because knowing Sun Life and understanding our footprint and understanding Asia is an advantage. But we always look at both internal and external and try to attract the best candidate. You should hear from us in about a month or so. REPORTER Thank you, and have a great day.

Takeover and yet for all of our senior roles, we do succession planning and we have a list of both internal and external candidates and as I said I expect to have announcement in the next month or so there is an advantage to Asia from an internal candidate because knowing sun life and understanding our footprint to understanding Asia.

As an advantage, but we always look at both internal and external and try to attract the best candidate you should you should hear from us in about a month or so.

Okay. Thanks.

Thank you.

Speaker 7: And I see our next question comes from the line of Gabriel Deschenes from National Bank Financial. Please go ahead. Good morning. I want to revisit this dental...

And I show. Our next question comes from the line of Gabriel <unk> from National Bank Financial. Please go ahead.

Hey, good morning, I wanted to revisit this.

The redetermination of Medicaid recipients and.

You said a couple of things one that the roll off is taking place at a faster pace than you expected it to.

As that is happening.

Causing higher expenses I guess those are processing, those or something maybe delve into a bit more of what's behind that and why you think things will maybe stabilize or get better because I'm just looking at the sales number.

You know you are averaging over $100 million over the past four quarters and it fell off a cliff the $4 million and I'm wondering how that is expected to rebound in the next few quarters could look like for profitability in this business.

If you can.

Speaker 8: Sure. Good morning. It's Dan. Let me kind of walk through the whole story of the redeterminations with the end of the public health emergency. And just as a reminder, during COVID, the federal government instituted a public health emergency. And one of the impacts of that was that people could not be disenrolled from Medicaid during that period of time.

Sure. Good morning, It's Dan let me kind of walk through the.

The whole story of the.

Re determinations with the end of the public health emergency and just as a as a.

A reminder, during COVID-19.

The federal government instituted a public health emergency and one of the impacts of that was that people could not be dis enroll from Medicaid during that period of time the public health emergency ended on may 11th and that freed up the states who have the responsibility for enrollment to re certify a redetermination.

Speaker 8: The public health emergency ended on May 11th, and that freed up the states who have the responsibility for enrollment to recertify or redetermine who is eligible. We and most of the industry had estimated about 12% of existing Medicaid membership would roll off as a result of that process over a 24-month period.

And who is eligible we and most of the industry had estimated about 12% of existing Medicaid membership would roll off as a result of that process over a 24 month period, our latest estimate which is consistent with industry estimate is for about 13.5% of membership to roll off so.

Speaker 8: Our latest estimate, which is consistent with industry estimates, is for about 13.5% of membership to roll off, so pretty close to that original, but at a much faster pace.

Close to that original but at a much faster pace roughly over a 12 or 13 months period in.

Speaker 8: roughly over a 12 or 13 month period.

Speaker 9: In fact, we think the redeterminations will be complete or largely complete by June 1st of next year. So it's largely the acceleration that has been the difference here. And so far, as of October , about half of those redeterminations, we believe, have occurred. So we're about halfway through that process, but we have about three more quarters where that will be happening. And. Yeah, go ahead. No, no, go ahead.

In fact, we think the Redetermination will be complete are largely complete by June 1st of next year.

So it's largely the acceleration that has been the difference here and so far as of October about half of those re determinations. We believe have occurred so we're about halfway through that process, but we have about three more quarters, where that will be happening.

And Yeah go ahead.

No no go ahead.

No no no.

I guess my second question I'm going to hold off on that but.

Okay.

Speaker 8: You would ask them what the outlook is, especially considering sales and also what the impact was on other loss ratios and expense ratios.

You had asked what's the outlook, especially considering sales and also what the impact was on another fact on loss ratios and expense ratios.

Speaker 8: So it's worth commenting, as that membership has come off, that just gives us a higher expense ratio, not necessarily higher expenses. There are some higher expenses in the quarter that are related to investments we've been making in the new Advantage Dental Club practices.

So it's worth commenting that membership has come off that just gives us a higher expense ratio not necessarily higher expenses.

There are some higher expenses in the quarter that are related to investments, we've been making in the new advantaged channel plus factor.

Speaker 8: But since the membership comes off or is coming off more quickly, the expenses don't come off quite as quickly.

Practices.

But since the membership comes off or is coming off more quickly the expenses don't come off.

Speaker 8: We also have seen some modest loss ratio pressure, not surprisingly. The members who come off through the redeterminations tend to be lower utilizing members than members who are staying on. But that's obviously a temporary impact. Just in terms of looking forward, a couple of important things to note here. Since the acquisition, which was June of last year, the dental business has sold about $600 million in new business. The skeleton of the opening in CON Desire

Quite as quickly. We also have seen some modest loss ratio pressure not surprisingly the members who come off through the redetermination tend to have be lower utilizing members than members who are staying on but thats, obviously, a temporary impact.

Just in terms of looking forward a couple of important things to note here since the acquisition, which was June of last year.

Dental business has sold about $600 million in new business about $400 million of that is from seven large Medicare and Medicaid sale.

Speaker 8: About 400 million of that is from seven large Medicare and Medicaid sales, and none of that premium is yet on the books. That premium will come on the books in 2024. It's anticipated during the first three quarters of 2024. And that 400 million in premium is larger than the amount of premium that we expect to be associated with all of the disenrollment.

None of that premium as yet on the books that premium will come on the books in 2024.

Anticipated during the first three quarters of 2024 and that 400 million in premium is larger than the amount of premium that we expect to be associated with all of the dis enrollment. So we do have a bit of a timing challenge obviously with the dis enrollment happening more quickly.

Speaker 8: So we do have a bit of a timing challenge, obviously, with the disenrollment happening more quickly than the new business coming on and more quickly than anticipated. So there could be some challenge around that over the next three quarters. But at the end of that transition, the business should actually be larger than it was. And in addition, there's a very large pipeline.

The new business coming on and more quickly than.

Than anticipated so there could be some challenge around that over the next three quarters, but.

But at the end of that transition the business should actually be larger than it was and in addition, there is a very large pipeline.

Speaker 8: of opportunities beyond the sales that have already occurred. Okay whats up.

Of opportunities beyond the.

The sales that have already occurred.

Okay.

Yes.

Dave I guess.

I guess the next few quarters Youll see maybe similar to this quarter, but then gradually maybe Q2 Q3 next year starting to go in the other direction in terms of.

Net sales in.

And.

Speaker 8: Well, in terms of premium, yes, the next three quarters we would see the other half of the membership that's associated with the redetermination.

Premiums.

Well in terms of premium yes. The next three quarters, we would see the other half of the membership that's associated with the Redetermination caught them off but we would also see that $400 million in new business start to come on especially first quarter of next year.

Speaker 8: come off, but we would also see that $400 million in new business start to come on, especially first quarter of next year. In addition, it's also worth noting that the third quarter of any year is the worst quarter for seasonality. In other words, the highest utilization quarter, largely related to kids getting dental care right before school starts. That's been a very long-standing pattern.

In addition, it's also worth noting that the third quarter of any year is the worst quarter for seasonality in other words, the highest utilization quarter largely related to his getting dental care right before school start that's been a very.

Speaker 8: So, and there were also some one-time accounting true ups and contractual true ups in the quarter. So we would expect those things not to recur. So from a revenue perspective, I would agree with your comment. From an earnings perspective, we would hope that the next quarters would be better.

Long standing pattern.

So and there were also some one time accounting true ups in contractual true ups in the quarter.

So we would expect those things not to recur.

So from a revenue perspective, I would agree with your comment from an earnings perspective, we would hope that the.

Next quarters would be better.

Speaker 4: I might just add that nothing has changed our thesis on the Dentiquest acquisition. We knew that the public health emergency was going to end and these people were going to be falling off of the membership. In fact, as Dan said, the sales is ahead. So if we think about our M&A thesis.

Thank you.

Gabe, it's Kevin I might just add that nothing is nothing has changed our thesis on that <unk> acquisition. We knew that these are the public health emergency was going to end and there was.

These people are going to be falling off of the the membership in fact as Dan said the sales is ahead. So if we think about our M&A thesis.

Speaker 4: We're nothing has changed our thought process on that. In fact, we think it could be a little bit better and the integration continues to go well. So yeah, you're seeing some lumpiness in the quarter, but we still expect DentiQuest to perform as we expected it to.

Nothing has changed our thought process on that and in fact, we think it could be a little bit better in the integration continues to go well, so yes, youre seeing some lumpiness in the quarter, but.

We still expect <unk> to perform as we expected it to.

Right.

Thank you.

Speaker 2: And I sure next question comes from the line of many Grauman from Scotiabank. Please go ahead.

And I show. Our next question comes from the line of mini ground <unk> from Scotiabank. Please go ahead.

Speaker 10: Hi, good morning. Kevin, I wanted to follow up on your discussion of partnerships and it sounds like the thesis there is changed a little bit for the positive and maybe sharp.

Hi, good morning.

Kevin I wanted to follow up on your discussion of partnerships.

It sounds like the thesis there.

It's changed a little bit for the positives and maybe sharpens I'm just wondering if you could.

Speaker 10: Hoping you could provide a little bit more insight in terms of, in terms of that, whether my impression is correct and then a follow up.

To provide a little more insight in terms of in terms of that whether my impression is correct.

And then a follow up on that.

Speaker 4: Well, you know, many we have a lot of partners around the world that linked into our joint venture partners, which are significant in India and China, our bank assurance relationships, our relationships with different

Well, we have a lot of.

It's around the world that linked into our joint venture partners, which are significant in India, and China, our bancassurance relationships our relationships with different banks.

Speaker 4: We also have a few opportunities that we continue to sort of push on and look at in terms of partnerships. And having a senior person who thinks globally about that, we think is going to be a benefit to our strategy. And if you think about how quickly the world is changing in different areas, having these partnerships and understanding how to leverage them, we see being important to the strategy. And Ingrid is a great fit for that, as I said in my opening remarks.

We also have a few opportunities that we continue to sort of push on and look at it in terms of partnerships and having a senior person who thinks globally about that we think is going to be a benefit to our to our strategy and if you think about how quickly the world is changing in different areas, having these partnerships and understanding how to leverage them.

We see being important to the strategy and Ingrid is a great fit for that as I said in my opening remarks.

Speaker 10: And is this a signal in terms of capital deployment in this specific area? Should we expect to see more there? Is there a change that you're signaling?

And is this a signal in terms of capital deployment in this.

Sick areas should we expect to see more there.

Change that Youre seeing.

Speaker 4: I wouldn't take it as a signal of capital deployment, I would take it as a signal of us leveraging the relationships we have and the opportunities that we see in front of us.

I wouldn't take it as a signal of capital deployment I would take it as a signal of us leveraging.

The relationships, we have and the opportunities that we see in front of us.

Speaker 10: Got it. And then if I could just ask a question on Asia, just in terms of Hong Kong specifically, very strong sales. And I'm just wondering if you could maybe disaggregate.

Got it and then if I could just ask a question on Asia, just in terms of Hong Kong specifically.

Very strong sales and I'm just wondering if you could maybe disaggregate.

Speaker 10: How much of that is the contribution from the new bank assurance deal? How much of that is from the NCB market?

How much of that is the contribution from the new Bank assurance.

How much of that is from the CV market specifically.

Speaker 4: Yeah, many Ingrid's on the line, so I'm going to let her answer the Hong Kong question.

Yes, many anchors on the line, so I'm going to let her into the Hong Kong question.

Okay. Thanks, Kevin Thanks, Randy.

Speaker 11: We delighted with Hong Kong, it really was a standout quarter, so sales are strongly up fourfold, and interestingly, strongly outpacing the market in the first six months.

We are delighted that Hong Kong, it really was a standout quarter.

<unk> is strongly up fourfold and interestingly strongly outpacing the market in the first six months.

Speaker 11: The factors are really twofold. So one is externally with the border reopening with mainland China, there's significant demand and strong momentum generally. But the fact that we've outpaced the market shows that we also had significant internal readiness that we've been focusing on over the last few years.

The effect is there any tasteful one is externally with the voluntary ethylene with mainland China, the significant demand and strong momentum generally, but the fact that we've outpaced the market shows that we also had significant internal readiness that we had been focusing on over the last few years.

Speaker 11: And a number of those relate to our client value proposition that we've invested in. Firstly, as you point out around our distribution.

And then number that is relate to our client value proposition that we've invested in firstly as you point out around that distribution.

Speaker 11: So we've emphasized all aspects of distribution. So it's around our broker relationships that we've broadened and deepened, agency teams including focus on MCI. Last call I mentioned our beautiful client center that we've opened in Simchat Choy. We're seeing a lot of activity through that. And then Dasting is our first quarter where we've activated our exclusive banker relations.

Emphasize all aspects of distributions that surround our broker relationships that can.

We broadened and deepened agency teams, including focus on Mci last call I mentioned beta for client facing that you've opened instance that choice and we're seeing a lot of activity through that and then dusting is our fifth quarter. We've activated our exclusive bank relationship and we think strong sales.

Speaker 11: And we're seeing strong fails through that, which we haven't disclosed.

Which we haven't disclosed separately.

Speaker 11: So that's on the distribution. On products, we continue to be leaders in innovation and actually incorporating some of the ESG concepts so that we're relevant for how important it is to...

So that's on the distributions on products, we continue to be leaders in innovation and the X gene incorporating some of the the ESG concepts that could be relevant for full and.

And how important it is to the climate aspects and then the third part and most important in the brand conscious Asia is investing in our brand and we are excited in August that we were in the top five brands in.

Speaker 11: And then the third part, and also important in a brand conscious Asia, is investing in our brand. And we were excited in August that we were in the top five of brand movers in Hong Kong, alongside a number of leading brands, whether it's in mobile, 1010, or you've had other competitors.

Hong Kong alongside a number of leading brands.

Whether it's in my about 10 10.

Other competitors.

Speaker 11: So that's part of the reason why we are shifting gear in Asia. And so to give you a sense, pre-pandemic, MTI was around 10% of overall sales in Hong Kong. Today, we are standing at roughly 30%. So that's a threefold.

That's part of the reason why we are shifting in Asia and 30.

To give you a sense pre pandemic MTI was around 10% of sales in Hong Kong today.

At roughly 30% so that's a three fold increase.

Speaker 4: I might just reiterate that in Hong Kong...

I might just add.

May just reiterate that in Hong Kong you saw combination is Ingrid mentioned of our investments in agency and growth there our investment in dosing and it's off to a great start it started selling on July the first big bulk of the sales. So we're through the broker channel and that's been driven by mainland Chinese visitors, but also.

Speaker 4: You saw a combination, as Ingrid mentioned, of our investments in agency and growth there, our investment in Dossing and it's off to a great start. It started selling on July the 1st.

Speaker 4: a big bulk of the sales though were through the broker channel and and that

Speaker 4: being driven by mainland Chinese visitors, but also leverages our

Speaker 4: our knowledge of the high net worth business out of Bermuda so there's a combination of things that are happening

<unk> Leverages, our our knowledge of the high net worth business out of Bermuda. So theres a combination of things that are happening in Hong Kong that are driving those good sales and I think that's a good thing to see that balanced growth across agency brokerage and our new bancassurance relationships. So we're seeing it in all three areas in Hong Kong the team's doing a <unk>.

Speaker 4: in Hong Kong that are driving those good sales. And I think that's a good thing to see that.

Speaker 4: balance growth across agency brokerage and our new bank insurance relationship. So we're seeing it in all three areas in Hong Kong. The team's doing a great job there.

Job there.

Thanks, so much.

Thank you.

Speaker 2: And I show our next question comes from the line of Mario Mendonca from TD Securities. Please go ahead.

And I show. Our next question comes from the line of Mario Mendonca from TD Securities. Please go ahead.

Speaker 4: Dan, could you help me understand the redetermination a little better? I understand where, how it can affect your premium growth in dental. In fact, that's...

Good morning, Dan could you help me understand the Redetermination, a little better I understand where it how it can affect your premium growth in dental and in fact that as well.

Described in your supplement in Europe, DNA I am not sure I understand how the redetermination.

<unk> experienced gains in this segment, which I think you offered at the Redetermination was one of the factors that drove.

Orange gains to be down.

Noticeably on a year over year basis. So help me understand that dynamic a little better than what they experienced line in the context of the Redetermination.

Speaker 8: Sure. Good morning. And hopefully this will answer it. The loss ratio does experience some pressure from the redeterminations because the people who are being disenrolled tend to be lower utilizers than the people who stay on the books. What happened during COVID was a lot of people who might even have had gotten other coverage through getting employment remained on the books because nobody could be disenrolled.

Sure Good morning, and hopefully this will answer it.

The loss ratio.

Does experience some pressure from the re determinations, because the people who are being DISA enrolled tend to be lower utilized or is than the people who stay on the books what happened. During COVID-19 was a lot of people who might even have had gotten other coverage through getting employment remained on the books because nobody.

It could be just enrolled so we did anticipate and we are seeing some modest loss ratio impact from the dis enrollment of those lower utilizing members and then of course there is also just fewer.

Speaker 8: So, we did anticipate and we are seeing some modest loss ratio impact from the disenrollment of those lower utilizing members. And then, of course, there's also just fewer members, which puts a little pressure on the expense ratio as well.

Members, which puts a little pressure on the expense ratio as well.

So applying your.

Outlook for the next few quarters than.

And I appreciate that there are a lot of moving parts. There are plenty of things could change, but just focusing on this Medicaid redetermination you would expect the experience to be a little modest experience gains may be even some modest losses relative to what we've had in the past because of this dynamic you're referring to and then.

Would you then expect experience to improve again.

Sometime in 2020 for once the Redetermination has run its course.

Speaker 8: Yeah, so a couple of key factors there. One is we built some impact on the loss ratio into the experience plan. So we would only see pressure on the experience gains if that impact was bigger than what we anticipated.

Yes, so a couple of key factors. There one is we built some impact on the loss ratio into the experience plan. So we would only see pressure on the experienced gains if that if that impact was bigger than what we anticipated.

Speaker 8: And so we think we've built in the right amount, but of course we could always be a little bit off there. Another very important point is 80% of our Medicaid contracts reprice or are available for renegotiation of pricing in one way or another during the next 12 months.

And so we think we built in the right amount, but of course, we could always be a little bit off there. Another very important point is 80% of our Medicaid contracts re price where are available for renegotiation of pricing in one way or another.

During the next 12 months.

Speaker 8: Generally, the states have been very cooperative wanting to make sure that the loss ratios on this business stay within a target range.

Generally the states have been very cooperative wanting to make sure that the loss ratios on this business stay within a target range. So.

Speaker 8: So if they see that the loss ratio is moving in the wrong direction, generally, they've been very amenable to some renegotiation there. But it's in many ways, the loss ratio is a short-term commitment in these contracts because they do tend to get reset. Right now, we don't think that's a big issue, but if it did become an issue, we would have...

So if they see that the loss ratio is moving in the wrong direction generally they've been very amenable to some renegotiation there, but in many ways the loss ratio as a short term commitment in these contracts because they do tend to get reset right. Now we don't think Thats, a big issue, but if it did become an issue.

Speaker 8: an opportunity to address that. And so you would expect to see, as this process completes and the business resets, you would also expect to see the loss ratio revert to historical norms.

We would have an opportunity to address that.

And so you would expect to see as this process completes and the business resets you would also expect to see the loss ratio revert to historical norms.

Thank you again.

Thank you.

Speaker 2: And I show our next question comes from the line of Doug Young from Deja. Please go ahead.

And I show. Our next question comes from the line of Doug Young from Chardan. Please go ahead.

Hi, good morning, just to add quickly.

Speaker 12: excluding the US redetermination.

Okay.

Excluding the U S. Redetermination, so just forget about that.

Speaker 12: So just forget about that. What was dental experience in the quarter? Was it in line with expectations or was it adverse or better than expected? Just trying to get a sense of like excluding this noise, what the underlying experience.

Dental experience in the quarter was in line with expectations or was it adverse or better than expected just trying to get a sense of like excluding this noise. The underlying experience trend has been.

Speaker 8: Yeah, so there were several things that happened all at once in this quarter. If you compare either to the same quarter last year or even to the prior quarter, it's about the same, you know, those were similar quarters. The variance is about half these factors related to the end of the public health emergency, the redetermination. So mostly revenue, and then some, as I've mentioned, some loss ratio, loss ratio pressure.

Yes. So there were several things that happened all at once in this quarter. If you compare either to the same quarter last year or even to the prior quarter. It's about those were similar quarters. The variance is about half. These factors related to the end of the public health emerge.

The Redetermination, so mostly revenue and then some as I've mentioned some loss ratio loss.

Speaker 8: The other half are some accounting and contractual true-ups. For example, we aligned some accounting practices post-acquisition. There is the seasonality impact. The third quarter is always the worst for seasonality or the highest for utilization. And then there were some unique investments in the Advantage Dental Plus business. We've been opening new practices, especially in the track.

The loss ratio pressure the other half are some accounting and contractual true ups.

For example, we aligned account some accounting practices.

Post acquisition.

There is the seasonality impact, but third quarter is always the worst for seasonality or the highest for utilization and then there were some unique investments in the advantaged dental plus business, we've been opening new practices, especially in Texas. So half of it was in those categories and half is related to the public health.

Speaker 12: So half of it was in those categories and half is related to the public health emergency. Okay, and so there wasn't anything from a loss ratio.

Fee.

Okay, and so there wasn't anything from a loss ratio perspective, it seems like it's just more.

Course outside of the Redetermination.

Speaker 8: Yes, I mean that's what, you know, obviously some of those things are non-recurring, which is good news.

Yes, I mean thats why.

Obviously some of those things are nonrecurring, which is good news.

Speaker 8: But yes, there was nothing fundamental about the business. In fact, as Kevin mentioned, we remain very optimistic about the dental business. As I mentioned, there's another 400 million of business sold that's yet to go on the books.

But yes, there was nothing fundamental about the business in fact, as Kevin mentioned, we remain very optimistic about the dental business as I mentioned there is another $400 million of business sold that's yet to go on the books, a great pipeline, we're meeting or exceeding all of the integration synergy targets there.

Speaker 8: a great pipeline, we're meeting or exceeding all of the integration synergy targets.

Speaker 8: The momentum with the business and the performance of the business is actually really strong and we would expect it to meet or exceed our acquisition expectations.

<unk>.

With the business and the performance of the business is actually really strong and we would expect it to meet or exceed our acquisition expectations.

Speaker 12: Okay, and I just a question on the ACMA, for I guess more Kevin Morrissey, but I just want to understand, you know, the lapse and the lapse impact on reported earnings, but also on the CSM.

Okay.

And then just a question on the act.

I guess Mark Kevin Morrissey.

I just want to understand.

And the lapse impact on reported earnings but also on this GSM.

Speaker 12: And I guess you had, can you talk a little bit about what drove this and, you know, I guess the way I think of lots is...

And I guess, yes.

Can you talk a little bit about what drove this.

I guess the way I think of lots is always typically goes through the CSM, but there wasn't earnings hit as well this quarter and so I don't know if that was just because lapsed was going through on businesses, where there was no CSM just hoping to understand what really drove the negative labs.

Speaker 12: it goes through the CSM, but there wasn't earnings hit as well.

Speaker 12: And so I don't know if that was just because Laps was going through on businesses where there was no CSM. Just hoping to understand a little and what really drove the negative Laps.

Okay.

Speaker 13: Yep, thanks for that question Doug. This is Kevin Morrissey. You're right. For the general model method where we have individual wealth and protection products, normally changes in lapse assumptions do go through the CSM. So that's kind of the normal place you would see them.

Yes. Thanks for that question, Doug This is Kevin Morrissey.

Right.

The general model method, where we have individual wealth and protection products normally changes in lapse assumptions do go through the CSM. So that's kind of a normal place you would see them. However.

Speaker 13: However, we did have some impacts related to a block in Asia, the international business, where we updated some of the financial risk assumptions.

However, we did have some impacts related to a block in Asia and the international business, where we updated some of the financial risk assumptions. It was related to lapse, but it was specific to the yield curve inversion and because financial risk assumptions on the GSM.

Speaker 13: It was related to lapse, but it was specific to the yield curve inversion. And because financial risk assumptions on the GMM

Speaker 13: method, that does go through net income. So it's a bit of a unique circumstance where

Our method.

That does go through net income so it's a bit of a unique circumstance where.

Speaker 13: when you have these types of products. Normally it goes through CSM as you said.

When you have these types of products normally it goes it goes through CSM is as you said.

Speaker 13: except where the CSM has been depleted. That is not the case. In this case, it's really specific to that.

CSN has been depleted that is not the case.

In this case, it's really specific to that financial risk assumption that was updated.

Speaker 13: financial risk assumption that was updated that was part of the overall lapse assumption set.

That was part of the overall lapse assumption set.

Speaker 12: That's clear. And then just on the last charge that went through the CSM, can you unpack a bit about what were the main drivers?

That's clear and then just on that last.

That went through the CSM and packet in it that were the main drivers there.

Speaker 13: Yeah, sure. So on the CSM, you know, the lapse impact

Yeah sure so on the CSM.

The lapse impact as noted was significantly negative there was really two sources and we saw.

Speaker 13: as noted was significantly negative. There was really two sources and we saw the reductions in CSM both in Canada and Asia. In Canada there were two product groups that were impacted.

The.

The reductions in CSM, both in Canada, and Asia in Canada, There were two product groups that were impacted.

Speaker 13: was term products where renewals were lower than expected and in some of the laps supported universal life products the lapses were lower than expected.

Was term products, where renewals were lower than.

And then expected and in some of the lap support of Universal life products. The lapses were lower than expected as well. So we had some reductions CSM there from Canada and in Asia, We updated the Vietnamese lots.

Speaker 13: than expected as well. So we had some reductions, yes, and they're from Canada. And in Asia, we had some reductions, yes, and they're from Canada.

Speaker 13: We updated the Vietnamese lapse assumption for that business. You've heard us talk about low persistency as part of our ACMA review this year.

Lapse assumption for that business, you've heard us talk about low persistency as part of our Act will review this year.

Speaker 13: We fully reflected the current level of experience in our ACMA update.

We fully reflected the current level of experience interact update.

Speaker 13: Despite the fact we are taking actions to improve persistency, we felt it was prudent to fully reflect our current level of...

Despite the fact, we are taking actions to improve persistency. We felt it was prudent to fully reflect our current level of first year lapses in the market and so there was a reduction to the CSM in Asia from that component as well.

Speaker 13: of first year lapses in the ACMA update. And so there was a reduction to the CSM in Asia from that component as well.

I appreciate the color. Thank you.

Yeah.

Thank you.

Speaker 2: And I sure our next question comes from the line of Paul Holden from CIBC. Your line is open.

And I show. Our next question comes from the line of Paul Holden from CIBC. Your line is open.

Speaker 14: Good morning. First question is related to the real estate experience during the quarter.

Thank you good morning.

Question is related to the real estate experienced during the quarter.

I'm wondering if you can give us.

Speaker 14: update on how much you've changed tap rates sort of on average across the board.

An update on how much you've changed cap rate.

On average across the board.

Year to date.

Speaker 14: and if you're expecting potentially more movement going forward.

And if you're expecting potentially more.

Movement going forward on real estate valuations.

Speaker 15: Sure, thank you for the question, Paul. It's Randy Brown. So we look at several measures when looking at changing valuations on real estate. So let me start kind of overall with the comment that the total return on the real estate portfolio was essentially flat this quarter. Valuations were down by less than 1% and largely.

Sure. Thank you for the question Paul It's Randy Brown.

So we look at several measures when looking at changing valuations on real estate. So let me start kind of overall.

With the comment that the total return on the real estate portfolio was essentially flat this quarter.

<unk> were down by less than 1%.

Largely offset by income.

So the negative that you've seen as management mentioned is the difference between the long term expected return and the actual economic return on the quarter.

Speaker 15: the difference between the long-term expected return and the actual...

Speaker 15: It also said our real estate portfolio has outperformed our long-term expectations. So we remain.

Spansion also set our real estate portfolio has outperformed our long term expectations.

So we remain quite comfortable with the assumption.

Speaker 15: So in terms of specifically on your question, we look at cap rates but we also look at yield.

So in terms of specifically on your question, we look at cap rates, but also look at yields.

Speaker 15: cap rate being more of a spot measure and yield being more of a life for the property. And so we've seen 25 to 50 basis point increase.

Cap rate being more of a spot measure in <unk> being more of a life of the property and so we've seen 25% to 50 basis point increases.

Speaker 15: in cap rates and 50 to 75 basis point increases in

In cap rates and 50% to 75 basis point increases in yields.

In the portfolio.

Speaker 15: frankly fared better than the broader market because of the very significant repositioning that I had mentioned on prior calls.

So we have.

Frankly fared better than the broader market because of the very significant repositioning that I had mentioned on prior calls.

So we were well positioned for this type of market with significant overweight relative to the opportunity set and industrial.

Speaker 15: with significant overweight relative to the opportunities set in industrial.

Speaker 15: residential and much lower allocations.

Residential.

And much lower allocations to two office and retail.

Speaker 14: Thanks for that. And then a question for Dan.

Got it thanks for that and then a question for Dan.

Speaker 14: Usually this time of year you might give us a little bit of an update or your thoughts around the upcoming pricing or negotiations for stop loss and US group benefits.

At this time of year, you might give us a little bit of an update or your thoughts around.

The upcoming.

Pricing or negotiations for stop loss in U S group benefits.

Speaker 14: it's been a pretty strong quarter for or a strong year for margins? Are you seeing increased competition or what I guess really was your view for 2024?

It's been a pretty strong quarter for the quarter strong year for margins are you seeing increased competition or would I guess really what is your view for 2024.

Pricing renegotiations.

Speaker 8: Yeah, thank you. We're in the midst of the selling season for really all our products, but especially for stop-loss. This is like the playoffs and the Super Bowl rolled into one. Most of the sales occurred during the fourth quarter, and we're actually quite optimistic about the outlook we've been holding to our pricing.

Yeah. Thank you we're in the midst of the selling season for really all our products, but especially for stop loss. This is like the playoffs and the Super Bowl rolled into one.

Most of the sales occurred during the fourth quarter and we're actually quite optimistic about the outlook, we've been holding to our pricing.

Speaker 8: You know, you've seen the loss ratio normalized back towards our pricing targets as we've signaled for quite a while that that would happen.

You've seen the loss ratio normalize back towards our pricing targets as we've signaled for quite a while that that would happen.

Speaker 8: And we are seeing some intensified competition, as which always seems to happen, especially this time of year. But our team is performing quite well, and we're optimistic about sales results for the quarter while holding to our pricing targets.

And we are seeing some intensified competition, which always seems to happen, especially this time of year.

But our team is performing quite well and we're optimistic about sales results for the quarter, while holding to our pricing targets.

Got it okay. Thanks for that.

Thank you.

Speaker 2: And I show our next question comes from the line of Nigel DeSouza from Veritas Investment Research. Please go ahead.

And I show. Our next question comes from the line of Nigel Desouza from Veritas investment Research. Please go ahead.

Speaker 14: Thank you. Good morning. My first question was on the other expenses line, both in Canada and Asia. I've noticed that that expense line has picked up meaningfully.

Thank you. Good morning, My first question was on the other expenses.

Online both in Canada, and Asia notice.

That expense line.

Speaker 14: here today and there was a step up this quarter. Just wondering what's driving higher expenses in both those segments or if there was any outliers or.

Meaningfully.

And there was a step up this quarter, just wondering what's driving higher expenses in both those segments.

Was there any outliers or.

Nonrecurring items, we should be aware of.

Hi.

Yes.

Speaker 5: Good morning, Nigel. It's Manjit. Overall, the corporate expenses on a quarter-over-quarter basis are relatively flat.

Good morning, Nigel its mandate.

Overall the.

Corporate expenses other on a quarter over quarter basis are relatively flat.

Speaker 5: On a year-over-year basis, we have seen an increase, and there's a couple of factors that are driving that. So the first one is just increase in sort of compensation, both relative to wage inflation and also higher incentive comps. And the two businesses that you mentioned, Canada and Asia, as we've talked about earlier, have had very strong results this quarter and for the year to date. And then as Kevin mentioned, as Ingrid mentioned, we're also continuing to invest in these businesses. So that's also reflected in there. But then as you've talked about, you've seen higher revenues related to those expenses.

On a year over year basis, we have seen an increase and there's a couple of factors that are driving that so the first one is just the increase in sort of compensation, both relative to wage inflation and also higher incentive comps in the two businesses that you've mentioned kind of in Asia. As we've talked about earlier have had very strong results this quarter.

For the year to date, and then as Kevin mentioned in his Ingrid mentioned, we're also continuing to invest in these businesses. So that's also reflected in there, but then as you as we've talked about you've seen higher revenues related to those expenses.

Speaker 14: Okay, that's helpful. And then the second question was on your actual review.

Okay. That's helpful.

And then the second question was on your.

Actuarial review this quarter.

Speaker 12: and wondering if you could provide some color on what experience since the start of the pandemic was incorporated into your assumptions versus long-term trends and maybe a bit more on morbidity because I think you noted

And wondering if you could provide some color on what.

What experience then.

And then Nick.

Incorporated into our assumptions versus long term trend and maybe a bit more on morbidity because I think you'd noted.

Speaker 14: a favorable morbidity update in the U.S. and unfavorable morbidity in Canada, but and the experience this quarter was actually I think favorable in Canada and unfavorable in the U.S. So just wondering if you could unpack how much

A favorable morbidity.

In the U S and unfavorable morbidity in Canada and.

And the experience this quarter was actually I think favorable and unfavorable in the U S. So just wondering if you could unpack how much of.

Speaker 14: the experience has kind of been an input into those updates and what has.

The experience.

Has has kind of been an input into those updates and what hasn't.

Yeah.

Speaker 13: Thanks for that question Nigel, it's Kevin Worsy. So on the first one, the pandemic experience, I would categorize it as saying we fully reflected all the pandemic experience in our evaluation assumptions and our updates. And so that's really specific to each of the local jurisdictions. So we took a look at the experience, how relevant it is and whether it's appropriate or not to include it directly in the update. So for example, where we had in some of our annuity segments, some higher low couldn't ly suburb groups,

Thanks for that question, Nigel it's kind of more so on the first one the pandemic experience I would categorize it as saying we fully reflected all the pandemic experience.

In our valuation assumptions and our updates and so that's really specific to each of the local jurisdiction. So we took a look at the experience how relevant it is and whether it's appropriate or not too.

<unk> included directly in the update so for example, where we had in some of our annuity segment's some higher death rates.

Speaker 13: as part of the pandemic, we did not project that to continue going forward. In some of the life insurance businesses where it was fairly benign, we did incorporate that in the experience study and it became part of our regular update. I would say it is fully reflected where appropriate. Again, we always take a very conservative bias on that, not wanting to be overly aggressive with regard to that. Your second question around

Spike up as part of the pandemic, we did not project that to continue going forward.

In some of the life insurance businesses, where it was fairly benign. We did we did incorporate that in your experience studying just became part of our regular update so I would say, it's fully reflected where appropriate and again, we always we always take a very conservative bias on that not wanting to.

The overly aggressive with regard to with regard to that.

Your second question around morbidity.

Speaker 13: I will start by making a couple of comments. When you update our assumptions, we always include three different perspectives when we are setting our new assumptions. The first is the longer-term average of the historical performance, the second being the trend and the third the future outlook.

Maybe I'll start by making a couple of comments when you update our assumptions. We always include three different perspectives. When we're setting our new assumptions. The first is the longer term average of the historical performance the second being the trend in the third the future outlook.

Speaker 13: So you mentioned morbidity specifically in Canada and the U.S. and that has been positive. It's been positive in the quarter and when we're looking at the update, as noted, there was strengthening, some strengthening done in Canada. I would describe it as fairly modest in the update.

You mentioned, the morbidity specifically in Canada, and the U S and that has been positive it's been positive in the quarter and.

When we're looking at the update as noted there was strengthening some strengthening done in Canada I would describe it is fairly modest in the update this year. However that does reflect a longer term time horizon. So that's a five year historical average.

Speaker 13: this year. However, that does reflect a longer term time horizon. So you know, that's a five year historical average.

Speaker 13: and it won't necessarily link with the direct line with the experience in the last couple quarters so it's a much longer term perspective on that. That being said, the experience in Canada over the last two quarters has been positive. I'd say it was a bit elevated probably in this quarter for Canada, a bit higher than we would normally expect but again the trend line has been good. The experience update though is much longer term. So if we do have that...

And it won't necessarily linked with a direct line with the experienced in last couple of quarters. So it's a much longer term perspective on that that being said the experiencing Canada over the last two quarters has been positive I'd say it was a bit elevated probably in this quarter for Canada.

A bit higher than we would normally expect but again the trend line has been good.

The experience update there was that much longer term. So if we do have that that short trend line continue then that then we would.

Speaker 13: that short trend line continue, then we would expect to see favorable results going forward.

Back to see favorable results going forward.

Yes, okay that makes sense thanks for that.

Thank you.

Speaker 2: And I show our next question comes from the line of Lamar Prasad from Cormark. Please go ahead.

And I show. Our next question comes from the line of Lamar Prasad from core Mark. Please go ahead.

Speaker 14: Thanks. I just want to close it up on this medical or Medicaid resize

Thanks, I just wanted to get closer to this medical our Medicaid Redetermination.

Speaker 12: I guess given that it was mentioned that over 50% of the redeterminations are in now, some of the new Medicaid sales coming in 2024 and Q3 being a seasonally high quarter for claims, would it be fair to suggest that this quarter was the trough for dental learning?

Given that.

It was mentioned that over 50% of the Redetermination are in now some of the new Medicaid.

Sales coming in two.

2024 in Q3 being our seasonally high quarter for claims so it would be fair to suggest that this quarter was the trough for dental earnings.

Speaker 8: I think that's a reasonable comment. Of course, we can never know for sure, but I think that's the way we look at it, too, that there were some one-time events.

I think thats a reasonable.

Comment of course, we can never know for sure, but I think thats the way we look at it too that there were some one time events.

Speaker 8: Plus, we're at, in a sense, we've had a lot of the redeterminations without the new business yet coming on the books, which is really more of a timing issue.

Plus we're at in a in a sense, we've had a lot of the redetermination without the new business, yet coming on the books, which is really more of a timing issue.

Speaker 8: you know, I think in terms of, you know, thinking about

I think in terms of.

Thinking about looking at one quarter versus a longer period of time.

Speaker 8: looking at one quarter versus a longer period of time.

Speaker 8: A year to date, our underlying net income is up 33% and sales are up 44%.

Year to date, our underlying net income is up 33% and sales are up 44% and that may actually be a better indication of the way to look at things than just the stand alone quarter, especially with some of these onetime events.

Speaker 8: and that may actually be a better indication of the way to look at things than just the stand-alone quarter especially with some of these one-time event

Speaker 14: And then just turning over to SLC, I guess you guys called out an unusually low tax rate. So maybe start on what drove that, what's a reasonable tax rate moving forward. And then beyond the tax rate, is this quarter's result an appropriate run rate for earnings moving forward?

Okay. That's fair and then just turning over to <unk> I guess, you guys called out an unusually low tax rate. So maybe starting on what drove that and what's the reasonable tax rate moving forward and then beyond the tax rate is this quarter's result, an appropriate run rate.

For earnings.

Going forward.

Speaker 12: Hi, it's Steve Peacher. Thanks for the question. I, you know, at the top of my head, I don't have, I can't answer the run, the kind of the good run rate, tax rate question for you, but we can get back to you on that. I, you know, it was around, I would say that, you know, it certainly bolstered underlying net income for the quarter by, you know, seven, $8 million. I would, you know, in terms of run rate earnings, I think if you look at like, if you look at the financial supplement where we.

Hi, Steve Peacher, Thanks for the question.

Off the top of my head I don't have I can't answer that.

The kind of the good run rate tax rate.

Question play, but we can get back to you on that.

It was around I would say that.

Certainly bolstered underlying net income for the quarter by.

$78 million.

In terms of run rate earnings I think if you look at like if you look at the financial supplement where we when you see the quarterly results.

Speaker 12: Management fees have been growing every quarter because AUM has been growing. And as Kevin mentioned in his comments, or Ranj did, we have a significant portion of our AUM is in commitments that, where we've gotten commitments from investors, and we haven't yet invested the money, so we haven't started joining fees. That AUM that's been committed, but not invested, is around $21 billion. So we definitely think that the trend in earnings, in both revenue and earnings, is up.

Management fees have been growing every quarter, because it's been growing.

As Kevin mentioned in his comments.

We have a significant portion of our AUM is in commitments that when we've gotten commitments from investors and we haven't yet invested the money. So we havent started earning fees that are UN that's been committed but not invested as around $21 billion. So we definitely think that the trend in earnings in both revenue and earnings.

Speaker 16: um and you know as we and we think so

Is up.

And as we and we think still are.

Speaker 16: feel like we're on target to hit our investor day target. So I would, well, I would say this is a representative quarter. We think the trend in earnings and revenues are just go.

We are on target to hit our Investor day targets. So.

Well I would say this is a representative quarter, we think the trend in earnings and revenues are just going.

Okay. Thanks, that's it for me.

Thank you.

Speaker 2: And I show our next question comes from the line of Tom McKinnon from BMO Capital.

And I show. Our next question comes from the line of Tom Mackinnon from BMO capital. Please go ahead.

Speaker 6: Yeah, thanks. Just on the meta Medicaid redetermination, what were the total net premiums annualized for?

Yeah. Thanks, just on the meta Medicaid Redetermination what were the total net premiums annualized for that business. When you are.

Yeah.

Just prior to that I guess that may 11th date.

Where do they sit now.

Well thanks.

Speaker 8: Yeah, I don't have that offhand. What I can say is that Medicaid does represent more than 80% of the total revenue within the dental business.

Yes, I don't I don't have that offhand, what I can say is that Medicaid does represent more than 80% of the total revenue within the dental business.

Speaker 12: and the You can also see if you look at the premium revenue for the quarter versus the prior quarter Some decline and that would basically all be from the Medicaid business Okay, yeah

And the <unk>.

You can also see if you look at the premium revenue for the quarter versus the prior quarter, some decline and that would basically all be from the Medicaid business.

Okay.

Yes, so if I take 80% of your total dental net premiums.

<unk> and then I take 13% of that.

And then I take that as a percentage of your total net premiums.

Both group benefits plus dental.

Less than 5%.

Total net premiums.

Speaker 8: Yeah, and we can certainly follow up with some more specifics there, but yes, the 5% would be about the way to think about it. Just a caution, the membership numbers and the premiums are not exactly the same.

And we can certainly follow we can follow up with some more specifics there, but yes, the 5% would be about the way the way to think about it.

Just a caution the membership numbers and the premiums are not exactly the same.

Okay.

Alright. Thanks.

Thank you.

Speaker 2: We have no further questions at this time and I will turn things to Mr.

We have no further questions at this time and I'll turn things to Mr strain.

Okay.

Speaker 4: Thank you, operator. I wanted to end the call by recognizing that Diwali celebrations began on Sunday in India and around the world. I want to take a moment to say happy Diwali to our employees, our colleagues and partners around the world who are celebrating. Diwali celebrates the triumph of light over darkness, good over evil and the human ability to overcome whatever you're facing. At Sun Life, we celebrate that resilience. Shoo ush Deepavali, Happy Diwali. And with that, I'll turn the call back to David.

Thank you operator, I wanted to end the call by recognizing that the wildly celebrations began on Sunday in India and around the world I want to take a moment to say happy Diwali to our employees our colleagues and partners around the world who are celebrating Diwali celebrates the triumph of light over darkness, good over evil and the human ability to overcome whatever.

Youre facing at Sun life, we celebrate that resilience.

<unk> deep of Ali happy Diwali, and with that I'll turn the call back to David.

Speaker 3: Thank you, Kevin. This concludes today's call. A replay of the call will be available on the investor relations section on our website. Thank you and have a great day.

Thank you Kevin. This concludes today's call a replay of the call will be available on the Investor Relations section on our website. Thank you and have a great day.

Okay.

Okay.

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