Q2 2025 Sun Life Financial Inc Earnings Call
Thank you, and good morning, everyone.
Good morning and welcome to Sun Life Financial Q2 2025 conference call.
My name is Galen and I will be your conference operator today.
Alliance have been placed on mute to prevent any background noise and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. The host of the call today is Natalie Brady, Senior Vice President of Capital Management and Investor Relations. Please go ahead, Ms. Brady.
Thank you and good morning everyone. Welcome to Sun life's earnings call for the second quarter of 2025.
Our earnings release and the slides. For today's call are available on the investor relations section of our website at sunlife.com.
We will begin today's call with opening remarks from Kevin strain, president and chief executive officer.
Following Kevin, Tim Deacon, Executive Vice President and Chief Financial Officer will present the financial results for the quarter.
After the prepared remarks, we will move to the question and answer portion of the call.
Other members of management are also available to answer your questions this morning.
As noted in the slides, forward-looking statements may be rendered inaccurate by subsequent events and with that I'll now turn things over to Kevin.
Well, thanks Natalie. And and good morning to everybody on the call this morning. Turn the slide for our results this quarter. Once again, highlight the strength and the resilience of our balanced and diversified business model, our underlying EPS was 1.79 up 4% year-over-year. Underlying net income was strong at just over $1 billion. Underlying Roe was 17.6%.
These results were solid across all of our businesses with Asia Canada and SLC management, having strong quarters.
Employee benefits business, hit record earnings this quarter and our stop-loss business in the US performed. Well, at a time when the industry is seeing challenges,
This reflects our leadership position in this stop-loss market. We continue to take a long-term view on our us Dental business, which has recently been affected by impact to the US Healthcare environment. Tim will go through this in more detail.
MFS continues to have solid earnings. While we experience outflows this quarter, we continue to see strong signals of clients' confidence and interest in our offerings, evidenced by our strong total gross sales.
Reported earnings were up over last year, the difference between underlying and reported earnings was primarily driven by real estate and Market related impacts.
These impacts were timing-based, not structural, and are expected to be neutral over the medium term.
There was also a write down of an intangible asset related to the US Dental contract.
Our Capital position continues to remain strong reflecting, our focus on financial discipline and capital light businesses. Our liat ratio at slf was 151% and we bought back close to 400 million of sunlife shares through our share buyback program. This quarter
turn to slide 5, we highlight our progress against our strategic imperatives Asset Management, Asia, Health, digital and people.
We saw a good momentum and resilience across our asset management and wealth platforms. This quarter at SLC management, our performance continues to track. Well, for the year, we had strong quarter for Capital raising with 6 billion dollars of assets, being raised doubling over last year.
Some notable highlights include the continued strength in Crescent us. Direct lending and Crescent Solutions funds.
MFS continues to experience outflows this quarter reflecting the volatility and Equity markets. Despite this we're encouraged by MFS. Total growth sales which are up year-over-year and demonstrate client, commitment to MFS.
Our active ETF business continues to build momentum and our fixed income business. Saw good net inflows, this quarter at MFS.
This quarter MFS was named best new ETF issuer at the 2025 etf.com Awards.
MFS continues to play a strategic role in sunlight's overall, Financial strength, delivering solid margins, and cash flow to the organization.
We continue to manage this business with a focus to achieve strong performance over the long term.
In Canada, our asset management wealth, businesses driven by giraffes GRS saw continued strength with assets, exceeding 200, billion dollars, this quarter.
In Asia, our asset management and wealth businesses delivered a record quarter.
In our India Asset Management joint venture. Strong inflows to newly launched Equity Funds contributed to a nearly doubling of net. Wealth sales this quarter while favorable markets helped Drive. Well, wealth assets up 21% year-over-year,
To significantly to Asia this quarter with sales up 22% year-over-year.
Delivering good results overall, with sales up 14% year-over-year, we are pleased with the sustained growth in Asia CSM, which was up 23% since last year and in the quarter at $6.2 billion.
In Hong Kong, our Diversified channel strategy continues to yield strong results. We achieve protection sales growth of 35% supported by robust performance across our agency Bank insurance and broker channels.
We also launched an index universal life insurance product for professional investors, becoming the first insurer in the market to bring this innovative solution to clients.
This product addresses, the growing market demand for high-end, Wealth Management Solutions and shows our ongoing dedication to supporting our clients evolving needs.
Shortly after the close of the quarter, we announced a further investment in Bow Tie. We have been on the ground with Bow Tie since the beginning of their journey, and it's incredible to see their growth.
They were recently recognized as the fastest-growing company in Hong Kong by the Financial Times, in their rankings of high-growth companies in Asia Pacific.
We're excited to continue our partnership with them and to advance our shared goals of making health insurance simple, accessible, and affordable for clients.
In Canada, we saw strong sales performance for SonLife Health. Up 41% year-over-year primarily driven by large case wins.
In the US our employee benefits business. Achieved record earnings and margins this quarter?
In stop-loss, our industry-leading capabilities, expertise and scale, have served us well in this competitive market and stop loss continues to be a foundational part of our us business and strategy.
We meet substantial programs. This quarter in advancing our digital leadership, including the deployment of new generative, AI capabilities, making it easier for clients and advisors to do business with us as well as helping us enhance our productivity and our operations.
In Canada, we're excited about the launch of our reimagine mobile application. This new app features, an enhanced health wealth, and protection experience facilitating easier access to health services and simplifying key tasks.
We also launched advisor notes assistant in Canada, a generative AI tool designed to enhance client experience and streamline workflows.
In Malaysia, we enhanced operations with a real-time underlying capabilities to speed up the sales cycle.
And in Hong Kong, we piloted Advisor Buddy, an AI chatbot to support advisors across the entire sales journey.
In the U.S., we implemented straight-through processing for our supplemental health, accident insurance to improve productivity and client experience.
These are just a few examples of the work we are doing to drive digital leadership across our businesses.
Sunlight people and cultural remains Central to Our Success.
This quarter, we were named 1 of the best workplaces in financial services and insurance in Canada, as well as 1 of the best, workplaces for health and well-being in Ireland.
Before I passed the call over to Tim, I want to acknowledge some leadership changes.
Last night, we announced that Dan Fish, President of Sun Life U.S., plans to retire in March 2026. Over the past 11 years, under Dan's leadership, our U.S. business has transformed into a leader in health-related benefits and services, connecting the broader healthcare ecosystem and helping people access the care and coverage they need.
Dan brought sunlife further into the health space, with services, like care, navigation, digital health programs, and clinical Innovations interventions that compliment core health coverage.
I've been a teammate of Dan's on the executive team since he joined in 2014. I've been impressed by the impact. He has had and how he has helped sunlife evolved into a leader in the group benefits space. In the US. He has truly made a difference.
And I want to congratulate David Healey.
David will become president sunlife us on September the 1st at time, which Dan will assume the role of executive chair of sunlife us until his retirement to ensure a smooth leadership. Transition.
David is a seasoned executive at sunlife with over 20 years of experience and is currently the president of sunlife US Dental business.
Throughout his tenure, he has LED and grown the employee benefits business head at operations and Technology teams and manage the integration of key Acquisitions including Assurant employee benefits and Maxwell health.
His experience in leadership, had have contributed significantly to sunlight's growth and success in the US market.
David's combination of technology and operations experience and his employee benefits background are perfectly aligned to our Ambitions for the US business. You will get to meet uh David and no 1 more in the coming months.
I also want to recognize Kevin warsy, our chief actuary whose voice is being a familiar presence, on these earnings calls for nearly a decade.
This will be Kevin's last earnings call as he prepares to retire this fall after an impactful 37-year career with sunlife.
Kevin and I have worked closely together throughout my entire 28 years at Sun Life, and I have personally watched him develop into a strong leader for us.
His remarkable Journey with sunlife companies has left an indelible mark on our organization.
And he has helped train and develop many of our actuaries and has been an important voice in the industry.
I'd like to take this opportunity to welcome our incoming. Chief actuary Brennan Kennedy.
Brennan is currently our senior vice president of global asset liability management and brings over 20, 25 years of experience with sunlife to this new role.
Both Kevin Morris and I have worked closely with Brennan over his entire career at Sun Life and we are really pleased to see him take this next step.
His deep expertise spans actual risk, management finance. And of course, Ulm
Brenda will be a valuable addition to our Global Leadership team.
Global Leadership team.
Dan and Kevin on behalf of all sunlight employees. Thank you for your leadership, and all of your many contributions over the years. We wish you both the very best in the future. As we begin the next well-deserved phases of your lives.
And with that I'll turn the call over to Tim who will walk us through the second quarter Financial results in more detail.
Thank you, Kevin, good morning, everyone. Turning to slide 7.
Overall, we are pleased with our second quarter 2025 results, which demonstrated the resilience of our business in the current environment.
We reported underlying net income of 1.015 billion up 2% year-over-year while underlying earnings per share of 1.79 was up 4% over the same period.
Asset management and wealth. Underlying earnings were flat compared to the prior year on higher fee. Income at SLC Management in Asia, offset by lower fee income at MFS and lower investment spread income in Canada.
Group Health and Protection underlying earnings were up 7% year-over-year, driven by higher U.S. dental results and favorable mortality experience in Canada.
Individual protection. Underlying net income was down, 10% over the prior Year from unfavorable mortality experience in Canada. And the US
Underlying return on Equity with 17.6% down from the prior Year from higher average Equity from earnings growth and changes to other comprehensive income from foreign exchange and interest rates.
Reported net income for the quarter was $716 million.
The variance between reported and underlying. Net income was driven by market related impacts and an impairment charge on a customer relationship and tangible related to the early termination of a US group Dental contract.
Market related, impacts reflected unfavorable interest rate, impacts, and real estate experience.
Interest experience includes the impact of risk-free rates Swap, and credit spreads and other timing related items arising from the market volatility experienced during the quarter.
Real estate returns were flat for the quarter below. Our long-term expected returns,
The total contractual service margin (CSM), which reflects future profits, increased 9% year-over-year to $13.7 billion, driven by strong organic CSM growth.
New business CSM of 435 million was flat compared to the prior year.
Organic Capital generation. Net of dividends was strong at 673 million above. Our target range of 30 to 40% of, underlying net income.
Our balance sheet and capital positions, remain robust with the NFL FCAT, ratio of 151% up 2 points from the prior quarter as organic. Capital generation more than offset. The impact of dividends share, BuyBacks and markets.
Bowled Co cash remains solid at 1.1 billion after returning almost a billion dollars to shareholders during the quarter and our leverage ratio remains low at 20.4%.
Finally, book value per share increased 5% over the prior year, demonstrating our ability to generate strong growth while returning value to our shareholders with 4.8 million shares repurchased this quarter under our share buyback program.
Turning to our business group performance on slide 9.
MFS is underlying, net income of 184 million us was down, 5% year-over-year primarily reflecting lower fee, income from lower average, net assets.
Pre-tax, operating net margin of 35.1%, decreased by 1.4 percentage points from the prior year on Lower fee income. From a decline in average, net assets and interest income.
Assets under management of $635 billion were up 3% over the prior year and up 5% over the prior quarter.
The sequential movement in AUM was driven by market appreciation, particularly in the latter half of the quarter, partially offset by net outflows.
Outflows of $14.3 billion, U.S. included; retail outflows of $5.9 billion; and institutional outflows of $8.4 billion.
Retail, outflows continued from Market uncertainty and institutional, outflows reflected primarily climate rebalancing activity.
Overall long-term investment performance for MFS remains strong with 90% of fund assets, ranked in the top half of their respective Morning Star categories, for 10 year performance.
Fixed income performance was also strong, with 98% of fund assets ranked in the top half of Morningstar on a 10-year basis.
Turning to slide 10, SLC management generated underlying net income of $45 million, up 7% year-over-year, but down from a record result last quarter. The sequential decline is attributable to catch-up fees and seed investment gains recorded in the prior quarter.
This quarter's results included a modest seed investment loss which contributed to the below Trend result.
Be related earnings of $89 million were up 37% year-over-year, driven by strong capital raising and lower expenses.
Reported, net income was nil. This quarter driven by acquisition expenses and Market related impacts.
With capital raising of $6 billion this quarter, reflecting strong activity in SLC Fixed Income, Crescent, and Biggio.
Deployments remained strong also at 6 billion for the quarter reflecting continued, attractive investment opportunities for private assets.
Slc's fee, earning AUM of 194 billion was up 9%. Year-over-year driven by deployments and Market appreciation.
Sequentially fee. Earning AUM was down, 4%, driven mostly by currency impacts.
Turning to slide 11 Canada's underlying net, income of 379 million was down 6%. Year-over-year as strong business, growth was more than offset by lower investment results and less favorable Insurance experience, reported, net, income of 330. Million was up, 13% year-over-year on more favorable Market related impacts.
Asset management and wealth, underlying earnings were down, 4% year-over-year from lower investment, spread income driven by lower yields, on investment contracts.
Wealth AUM of 203 billion was up 12% year-over-year on Market appreciation and net inflows.
Group Health and Protection's underlying earnings were up 1% year-over-year, reflecting more favorable mortality experience and business growth, partially offset by less favorable morbidity experience due to higher costs related to disability claims in the quarter.
Group sales were up 41% year-over-year driven by large case sales.
Individual protection earnings were down 16% year-over-year due to unfavorable mortality experience, which mostly offset a corresponding gain in the CSM.
Individual protection sales were down. 19% year-over-year driven by third-party sales.
Turning to slide 12 sunlife us, underlying net, income was 143, million us down 4% from the prior year.
In group health and protection, underlying earnings were higher by 10% year-over-year driven by business growth and employee benefits in Dental partially offset by unfavorable experience.
Us Group Health and protection sales of 226 million us were down 7%, year-over-year reflecting the impact of pricing discipline in a competitive market for medical stop-loss. Partially offset by higher government and Commercial Dental sales.
In medical stop-loss results. This quarter were in line with recent expectations, morbidity results, reflected the expected Reserve accumulation on January 1st 2025 business including the previously, indicated 2% pricing shortfall
In Dental, this quarter's results reflected higher Medicaid claims from higher per member utilization and severity. In addition, the uncertainty around Medicaid funding in the U.S. has slowed repricing actions with both states and health insurers, contributing to elevated dental loss ratios in the near term.
As a result, we no longer expect the business to achieve 100 million Us in earnings this year.
Given the near-term challenges, we are re-forecasting our expected earnings trajectory for the business.
We are confident in the long-term outlook for dental and remain committed to the 12th and percent plus medium-term underlying earnings growth objective. We set out for the overall us business segments.
Going forward. We expect Dental to contribute at least 1/3 of the overall us earnings growth.
Individual protection underlying earnings were down 46% year-over-year, driven by unfavorable mortality experience and credit impairments. Reported income of $74 million was down 19% year-over-year and included an impairment charge, which more than offset improved market experience.
Turning to slide 13, Asia posted a record underlying net income of $206 million, up 13% year-over-year. Individual protection earnings were up 7% year-over-year, driven by business growth and higher investment contributions, partially offset by higher expenses. From investments in the business, asset management and wealth earnings grew 67% over the prior year, driven by higher fee income from strong AUM growth.
Reported net income of $98 million was lower year-over-year due to unfavorable market-related impacts.
We continue to see strong sales in individual protection up. 22% year-over-year driven primarily by momentum in Hong Kong across all channels. Solid contributions from our bank Insurance deal in Indonesia and sales growth in India.
Asia's total CSM of 6.2 billion. Grew 23% year-over-year driven by strong organic CSM growth.
New business, CSM of 299 million was up, 34% from strong, sales and margins in Hong Kong.
We're pleased with the overall results. We've delivered this quarter despite the challenges in the macroeconomic and geopolitical environment.
We remain confident that our strong fundamentals Diversified business, mix and geographies. And robust Capital levels will continue to support our ability to achieve our medium-term objectives and deliver on our purpose.
Leader of the Year by the Canadian Chamber of Commerce.
This award celebrates Kevin's leadership and strategic pursuit of global opportunities, which have significantly elevated Canada's international presence.
On behalf of all sunlife employees. Kevin congratulations on the sustaining achievement.
With that, I will pass it back to Natalie for the questions and answers.
Thank you. Tim to help ensure that all participants have an opportunity to ask questions this morning. Please limit yourselves to 1 or 2 questions, and then req, with any additional questions, I will now ask the operator to pull the participants
Thank you to join the question queue. You may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speaker-phone, please pick up your handset before pressing any keys to withdraw your question. Please press star then to
The first question is from Doug young with dejardin capital markets. Please go ahead.
Uh, good morning, just maybe starting out on the US group and the dental side. Um, you know, you no longer think you can hit 100 million of earnings, us and 2025. I don't think that'll be a shock to most people, but you also put out a target of 250 by 2029. No mention of that, just wondering how we should think of
The evolution of the US Dental business over called the next 5 years. And and and if you can weave in, I think you said you think, you know, 1/3 of us earnings growth is going to come from the dental business. Maybe if you can kind of wrap that all together and then you know, there's obviously a lot of Goodwill and intangible you know, related to the business you spent 3.1 billion on it.
My questions I'm getting is that does that need to get written off at what point in time? Do you look at that as a potential write off and and can you talk about the size of the Goodwill and the intangibles related to death the quest?
Hi, good morning, Doug. This is Tim. Uh, maybe I'll kick this off. So, in light of the near-term uncertainties that I referenced in my opening remarks, in particular around Medicaid and the repricing, we're having to refocus our earnings outlook for the business.
And rather than provide a single point estimate on earnings number uh for a number of years out, I would really refer you back to our medium-term earnings growth objective for the US segment. Overall as I said we're committed to the 12th percent plus subjective that we shared at investor day and as mentioned expect the dental will be at least a third of that overall earnings growth for the segment.
And then looking ahead, we're confident in the long term outlook for the business. You know, we're the largest dental benefits provider in the US by membership and have a strong brand, pre presence in the market. And we see a lot of growth opportunities in the commercial space which has higher margins, you know, the opportunity for synergies with our employee benefits business, the opportunities we have to reduce expenses and invest in the business to make it more efficient. And then ultimately the repricing actions to get back to the pricing Target levels over time, is really what's giving us confidence in the business, in, in the long term?
And then, on your, your second part of the question related to intangibles at the at the time of the acquisition, we, uh, set up.
Customer relationship and system intangibles of about a billion 2 and we had Goodwill on the books of, uh, about 2 billion. And, um, when I look ahead for the business, the customer relationship intangibles. You know, those are tied to specific contracts. And so, in the case of this quarter, there was 1 1 contract that terminated early but overall, because of the Outlook that I referenced over the long term, we still remain confident in our Goodwill. We we test that for impairment regularly, uh, we have ample cushion of fair value above that at this point. Uh, so nothing further to indicate at this time.
and I just need to follow up on and it's just that like why did the there was an ASO group Dental contract that terminated can you talk a bit about why that
That happened and then on the repricing side, I think a lot of this hinges on repricing, it seems like it's going slower. Can you talk a bit about what you're seeing on that front?
Yeah, it's good morning. It's Dan Fish, buying, just on both of those items. First of all, the client that terminated was a commercial ASO arrangement that was a related party to the seller. So we had established a separate intangible for that reason for that contract.
They're a nonprofit client and they felt more comfortable working in the future with another related party from their nonprofit world. Uh, and perhaps we're not completely comfortable being, uh, you know, with a public company relationship. Uh, overall, the relationship has been good with that client, and they will remain with us until August 2026, and we're currently working closely with them, uh, on transition. So, this is a rather unique situation. We don't think it's necessarily indicative, uh, of of broader issues and then I'm sorry, remind me your second question.
Repricing.
The repricing, thank you. Um, you there's no question that the reconciliation bill that moved through Congress. Uh and was signed recently by the president has created a chilling effect on the negotiations for appropriate, pricing with States and also with the health plans uh that we work with now long term we don't expect significant impact on the business. We serve from the bill because we 80% of our Medicaid membership. Uh, is kids and the changes in the bill, largely affect adult coverage. However, it is the uncertainty around future Medicaid, funding has caused States and health plans to slow down on bringing rates back to where they need to be, uh, correcting them after the mixture.
Shift that we've talked about before that resulted from the end of the public health emergency. Uh we are continuing to make progress on pricing but unfortunately it will take longer than we had anticipated.
Okay. And, and just
Kevin Doug. I just, I just wanted to reinforce a couple of messages around that the dental business because it is an important part of the US group space. And it is a part that is reprisal and has low Capital usage and the the acquisition of DentaQuest we were really a player in the dental business. It added scale and new capabilities for us, you know, we weren't in the Medicare Medicaid business at all. And that's an important part of the US Health Care System. It's definitely going through a lot of impacts right now, not that different than what we're seeing. Our competitors go through. And those impacts are higher usage, by members, higher higher usage by providers, which you tend to see when people think their benefits may be going away, so that's not unusual to see and that's partially public health emergency. But also the, the funding that Dan discussed and you're seeing a rational approach by the state, which is saying, we're uncertain about funding. So they're not changing pricing as aggressively as we would have, you know, sort of in
Anticipated, but longer term, you know, we see the opportunity, Tim mentioned this to go more into the commercial space and to optimize, you know, the the Medicaid Medicare space which are going to be important parts of the US, Health Care system and Dental's important, part of the group benefit system. So, you know, it's a, it's a difficult challenging time, not just for us for everybody, who's in that space, and we're going to work our way through it, and we're doing the right things to to do that. So I think that that's, it's important to keep that that context.
No, I I I do appreciate that and just 1, follow-up manager. Um empf, I know you're a big player, um manually, but obviously kind of
Quantify. What the impact that has on underlying earnings? Can you quantify what the impact is for your mpf business?
Or for your morning operation earnings.
Yeah, good morning, Doug manager. Yeah. So, you're right. The, as you heard yesterday, the the monetary Provident fund scheme Authority will take on the administrative cap, uh, capabilities for responsibilities for the, um, for this for the mpf assets. So the, uh, fee that we earned on administering, those will will no longer be there. Um, you know, the impact for us will be around Canadian dollars, 10 million dollars a quarter. Uh, overall, this is a very good business for us. We've seen good growth on in this business, uh, over the years. It generates a good Roi and we expect that to continue.
I might also mention that we are pivoting to do more Asset Management in that space and manage it in the team. Have been have been working on that and that'll be important part of that the empf business model going forward.
Our next question is from Paul Holden with CIBC please. Go ahead.
Yeah, thanks. Uh, good morning. Want to ask a question on the particular on the, uh, us, uh, medical stop-loss business.
The stop loss.
Versus employee plans, there is also the need to accelerate repricing actions in stop-loss given claims loss trends in the industry.
Thanks. We, you know, we were actually pleased with the stop loss results. In the second quarter as you may recall in the fourth quarter, we and everyone else saw a significant spike in in medical expenses. In our stop-loss business. Uh, we headed into this year, obviously, with some concern about where that would go, but the experience has largely stabilized and has been in line with the expectations that we set at that time, uh, our earnings in for stop loss in the quarter, you know, we don't break it down between stop-loss and employee benefits. Uh, it was down a little bit compared to last year, but you know, very much in line with the expectations that we laid out. Uh, We've also actually also seen some improvement in the loss ratio for the January 1st 2024 cohort, which is now almost entirely complete. Uh certainly not back to where it was prior to the fourth quarter, but there has been improvements since then, which is quite reassuring.
During, uh, we also are now starting to get some experience on the January 1st, 2025 cohort. But we're still very early in that process with only about 12% of the claims in. But what we've seen so far is, uh, similarly reassuring, uh, about the experience. As we mentioned that that time, we thought that our pricing for 2025 was about 2%, less than it, probably needed to be. Uh, we have certainly put through those prices. We put them through during the first quarter largely for effective, dates, 71, and Beyond. And we have been able to get those, uh, increases. So, we feel that the business going forward is properly priced to rep, uh, reflect the experience that we're seeing.
Right. Okay, that's a good update. Um,
Second question then, um, would be with respect to SLC. So fairly big difference between the year-over-year growth in, uh, see, uh, earnings up 37% and then the underlying up 7 and I guess there's some accounting differences. And don't need explanation for that viewpoint. But just more like, what, what which 1 do you think is more of a indication of true run rate earnings growth in that business? Or maybe the answer is somewhere in between, but just trying to, you know, get a better understanding of what, what, what really is indicative of how this business is growing from an
Earnings perspective.
Uh, yeah. Thanks, uh, it's uh, Steve, um, I think the things to look at and you can see, you can track this in the supplement or to look at the things that, you know, our our Core Business is actually very stable and will track with AUM over time. So if you look at, uh, management fees, uh, fundamental management fees, um if you look at distribution fees Property Management, fees those are going to tie very directly with a uh, 1. Um, uh, you know, 1 variable component of management fees are ketchup fees, which can vary a lot quarter to quarter, because they're all dependent upon when funds flow. Or when funds clothes and certain funds when they close result in ketchup fees, they're never negative, they're only positive, but they're very lumpy. Um, and I think fee related earnings is, is, is really the best, uh, view of kind of the core earnings power of the business because that is before any marks on seed, uh, Investments. And so, while fee related earnings will be impacted,
By, you know, quarterly fluctuations and things like ketchup fees, it's a pretty stable number and we'll track with AUM below that line between there and underline that income. You get some noise around uh, marks on seed, uh uh, assets. We had some noise this quarter that I think I, I
Thank you. We'll probably reverse at some point on our investment in a very strong uh industrial portfolio. That was seated to be potentially sold and the wealth Channel. Um that is under that is below the fee related earnings line but does impact underlying net income. So uh I would track uh, management fees and uh and fee related earnings is. And also of course, what is our fundraising experience and what are our net flows? Um, and those are clearly trending up. You know, our fundraising for the quarter was 6 billion. Um, up double over last year up from 4.4, from last quarter and we had positive net flows again of about uh between 4 and 5 billion. Um,
It's it's it's Kevin. I'm just going to add we're you know we're on track to achieve the 235 that we gave an investor day. So if you're looking at the the next 2 quarters that 235 gives you a sense that what we're expecting is Steve mentioned, we had hired C gains and and um, ketchup fees and in the first quarter and the ketchup fees, this quarter were actually zero and the seed investment was a loss. And so you're seeing a little bit of volatility, but I would think of it as targeting the 235. And then on our investor day, we we gave you numbers around 20% growth in underlying earnings and 20% for growth over the medium term. And that's the way to think about that. We feel like we're on track on SLC and and uh, we're seeing flows that are consistent with that and the big piece we needed to do. And we talked about this last quarter was getting ready for the biopsy and the leadership team. And we've made some really significant announcements there which we think are really positive under Steve's leadership.
Yeah, if I could just inject 1 other quick comment that underlined that income this quarter 45 million. I would say was is is below the Run rate that I've mentioned and I think but but marginally blow was fairly normal quarter. We had kind of 2 negatives. 1 was a markdown on a SI portfolio which I think was kind of noise. Um uh and the other was that we had zero catch up fees this quarter usually we have some and that was partially offset by some adjustment to some expenses and so I would say that impacted us the net impact of that on you. And I was probably I don't know uh mid to high single digits versus what I would consider our normal run rate
At this point.
Okay, I'll respect the two-question limit and let someone else fire away. Thank you.
Question is from John Aken with Jeffrey's please go ahead.
Good morning, uh, men in terms of the, the growth that you've been experiencing Asia, um, obviously quite a positive, but moving forward. Um, as as we're expecting to continue to grow the business, do you think that margins are defensible? And you know, what are you seeing as a competitive response?
Good morning John. Uh, it's managed. Um, obviously as you know, we're we're in 8 different markets as a different Dynamics in different markets. But overall you know we we feel good about the the growth that we've seen over the last little while we feel we're in the right markets, we're making investments into our into our business, we're focusing on the client and we're, we're doubling down on execution and, uh, I expect that to continue and, and, and S for the foreseeable future to kind of continue to deliver good results.
And man, would you mind um, giving some more detail?
What does it bring to to manual life? Sort of something like my apologies? And what does sunlight bring to the boat? I was in then then a capital.
As uh, as Kevin mentioned, you know, we've been, uh, in partnership with bow tie for quite a number of years. Uh, they are a digital company uh, that, uh, helps with, uh, with insurance for for, for our clients in, in Hong Kong, and there are direct to Consumer model and that complements our our distribution Force. So I think it's a good, uh, a good partnership has been and we expect that to continue.
Thanks. So I'll reach you.
The next question is from Gabrielle Dane with National Bank Financial, please go ahead.
Hi. Uh,
Just, uh, the, uh, you know, driver of that severity and frequency trend. I think Kevin touched upon one factor there: people are worried about losing their coverage. Uh, I guess, is there more of that to come? Because it sounds like it could get worse even because Q3 is the seasonal, um, uh, uptick in dental claims—back to school stuff. And then beyond that, I'm just trying to get a sense of what the pipeline for this claims activity looks like.
Yeah, thanks. Um, you're absolutely right. That the third quarter is the, uh, most adverse in terms of seasonality, we fully expect that. So that's something to, you know, look ahead to and, of course, that's because we mostly cover kids and back to school, uh, toward the end of the summer parents, take their kids to the dentist. So, the third quarter usually has the least favorable experience.
Incorrectly uh, up to a year ago. So there's some 1-time effect in our experience, some of that led to some increased severity and we would not expect that to recur, but as far as the longer term Trend, we are seeing. And, of course, all of the health insurers are seeing as well. It's not just in Dental, a meaningful increase in in severity as well as in some in utilization. We do think that billing practices by providers aided by AI is driving some of the change in severity. So we're certainly, uh, both upping our game on how we handle that. But also, we're going to need to make sure that that's fully reflected in pricing going forward, because that does seem to be a dynamic that's happening across segments and, and across, uh, the entire landscape.
Okay, great. And then, you know, the pricing issue, I mean that's a a lever that uh is frequently been identified.
To help address margin issues. You know what, what's the you know, nor the normal course? What what kind of what is the current situation compared to about your normal timing? And then I guess a more silly question, what's your pricing power? If you say, oh, we need to raise their prices by 5% Kent State, just say no.
Suck it up. I mean I don't know how you know what the mechanisms are.
Sure, let me, let me go through that a little bit and particularly with the focus on Medicaid, which I think is, is your, your, your question. Yeah. Um, in in Medicaid, the rates are reset annually. So, that's good. That's a very good aspect of this, but they are reset by the State Medicaid authorities. Either directly to us in where we have those direct relationships, or through Health Plans where we're subcontracting with those health plans. So we can have influence over the rates, and we've dramatically increased, our Actuarial staff and our capabilities in that area over the past couple of years. And we provide a lot of data, insight and opinion to the states, which they do take into account. But to your point ultimately, they set the rate. Now, they are required under the law to set actuarially. Sound rates, which typically means they look at the last 3 years of experience, and then set the rate based on that experience, plus, whatever, trend
Uh, in in Dental expense. They apply to that part of the challenge here. Of course, has been that in the wake of the public health emergency ending the business mix shifted rather suddenly and is not completely yet. Reflected in the past 3 years of experience that emerges over a 3 year time uh 3 year timeframe obviously all our work with the
States had been to get them to accelerate recognition of that, uh, effect. And in some cases that was effective and in some cases that's been less effective. And now with the overhang of uncertainty about funding in Medicaid, that has certainly uh, slowed that process down. Uh, we do believe that the rates will get to the right place. Once we get through that full 3 year cycle, that's what the law requires and certainly has been the history. Uh, but it is taking, uh, longer than we had originally hoped for sure.
That, that was part of my question. Like, how much longer? You know, what was your expectation, and now, given these dynamics with, with the new expectation?
Yeah, I can give you a little bit of perspective on that, you know, last year, we were able to achieve about 140 million dollars in rate increases. We expect to, uh, achieve, um, additional rate increases this year, but not as much as last year and we anticipate that it likely will take through 2026 to get the rates, uh, back to uh, you know, full uh, full expected margins.
Okay. All right, congrats on the retirement if you're not on the next call.
That's it. Thanks. All right. Thank you.
The next question is from Alex Scott with Barkley's. Please go ahead.
Hey uh thanks for taking the question. Uh, first 1 I had I wanted to touch on stop loss. I think it was mentioned in some of the remarks that there was a little bit of favorable development on 2024. I just wanted to see if you could size up for us. Um, only because you know, small percentage changes on like full year 24 and have a pretty magnified impact on the current quarter. I just want to make sure I was understanding the impact of that correctly embedded in, you know, the segment reporting you guys gave
In each quarter. So it does get very complicated right? Because in the quarter, we had experienced from the 1125 from the post. Uh, sorry from the 1124 from the non uh, 1124 cohort and the 1125, and even some experienced, uh, final, uh, emergence of experience from 2023 actually. And those of course, naturally would go, don't always all go in the same direction. Uh, it, we did have I, what I can share is as, you know, we had a significant spike in experience in the 1 124 cohort in the fourth quarter and during the first and second quarters about a third of that has reversed 2/3 of that adverse experience very much still there, but about a third of it, uh, has uh reversed uh, the other uh, cohort. That's obviously very important right now, is 1112
2525. And as I mentioned earlier, we only have about 12% of the claims that have come in. So that's mostly a reserved pick. So, we're still making the assumption that, that it, that we were off by about 200 basis points on pricing, uh, and that and that's currently what's in our results. Uh, but you know what, we can see from that first 12, uh, percent is consistent with, or maybe even slightly better than that. I don't know if that answers your question, but I hope it.
It's helpful.
Yeah, no, that is really helpful. Thank you for all that. Um,
second 1 I had is on on MFS and just wanted to see if, if you could talk a little bit about what you see in the back half for flows. I mean it sounded like your your optimistic on the inflow piece of things. Do you have any visibility on?
You know, the outflows and just what it all, uh, may mean going into the back half of the year.
Hi, this is Ted. Um, it's always very difficult to predict flows on a quarter to quarter basis. We think the trends that have been in place are are likely to see to remain in place, uh, until they're not. So we've got institutional rebalancing from, uh, Equity to fixed income where our current balance, uh, leads to outflows there. Uh, we also have the retail Market um, at an elevated Redemption rate, which again, we would not expect to be sustainable for the long term but see, no near-term abatement. So I think, uh, we wouldn't predict the back half of the year but the trends in the near term will probably stay in place and long term. Remain optimistic about returning to net flows in the future.
Got it. Thank you.
The next question is from Tom Gallagher with evercore isi. Please go ahead.
Morning. I'm just a couple of questions on the U.S. The, um,
I guess Dan the commentary on Dental. I just want to understand.
Would you expect to shrink Medicaid, uh, Dental for a while and grow commercial while you're going through this transition or you? Would you still expect to be growing your uh, the Medicaid business, uh, while you go through this transition and it sounds like it's really just a 1 year. Through the end of 2026 issue. Not not longer than that.
Uh, that's my first question.
Okay. Yeah, and the the Medicaid business obviously since the end of the public health emergency, you know, from the period early 23 to Mid 204. Uh, certainly did shrink, you know, uh, a reminder, we if you go back to when the phe ended, we lost 19 and a half percent of the membership that we had at that point and that represented about 400 million dollars in premium and fees. Yet the overall business, uh, the overall Dental business has grown by 200 million since, uh, since we acquired Dental class. So you know what's happening there, obviously, we're making a lot of sales at the same time, uh, now that
Very important that we be in that space And We are continuing to grow, uh, in that space. It's a very important space for us. And as the market leader, We are continuing to grow and we expect the business to continue to grow at a very healthy Pace. Not not just over the long term, but even during this next 1 to 2 year period,
thanks, thanks for that. And then it's Tom, sorry, it's Kevin. And I I just may add that, um, the you started with the commercial side and and that isn't a side that we are emphasizing Dan and I talked about that a lot and David and I as we were going through the process of being and he's leading Dental have been talking about the commercial space and how do we leverage the capabilities that we've bought with DentaQuest and they were small in the commercial space or are almost not existent and we were small in the commercial space. So we think there's a lot of opportunity over the medium term to continue to build that out as a as a strength for us. And we like the fact that we could have a more aligned mix of of business in terms of the US. So, having Medicare Medicaid, is important as Dan said, but but growing the commercial alongside of it is, is really important to us strategically
And I think it's worth worth noting that the commercial has grown at a significantly faster Pace over the past 3 years than even the Medicare and the Medicaid. And we would expect that faster Pace to continue um commercial right now, represents less than 20% of the total business mix. We'd like to see that. Be a significantly higher uh proportion in the future and that's what we expect.
Thank thanks for that guys. The uh my quick follow-up is Dan. You you mentioned that there was also some 1-time ish type charges in the quarter. Um in Dental can you quantify that how um you know relative to the break even earnings in the quarter? What what would it have been if we stripped out that charge? Thanks.
Yeah, I think that, you know, just to put give it a little bit of perspective, particularly looking at the first quarter compared to the second quarter because I know those 2 numbers are, you know, create a big contrast. You may recall in the first quarter that we had a retroactive premium payment from 1 of our largest state partners that was in the high single digits. We also had some non-recurring favorable uh investment income. And in this quarter we did have I mentioned there was 1 uh client that asked us to reprocess claims. They had submitted incorrectly going back about a year. If you just take those 3 items that amount accounts for the entire difference between the first quarter, uh, and the second quarter.
Uh, so if you took the first 2 quarters, and uh, you know, the first half and divided it in half, that's probably a better picture of what the results would have been in the first 2 quarters.
That's helpful, thanks.
The next question is from Tom McKinnon with BMO. Please go ahead.
Yeah, thanks very much. Um,
Want. If, if we look really at
The the the dental with only 2 million in the quarter, you still actually, uh, did better than consensus, and it seemed to be in part due to better other fee income and uh and some better other expense control. So I want to delve into those 2 things. If I look at other fee income, uh, you know, was up over 20 million year over year and uh sort of better than expected in each 1 of your, in Asia, and Canada and in the US. So if you can maybe flesh out what uh is in that other fee income there uh maybe dialogue, some of these other things that you have in sunlife health, maybe ASO fees, maybe other things like that and how we should be thinking about the Outlook with respect to this. Uh, number that came in better than anticipated and I have a follow-up as well. Thanks,
Hi Tom, it's Tim. I'll I'll kick that off. And uh if Dan wants to supplement on the US, uh you're right. The other fee income line includes a number of items. So we have our health group businesses in Canada, and the US, that's our administrative Services, only businesses, that's where it earns fees. It ALS includes our wealth businesses across Canada and Asia. And so, uh, we had a very favorable
The bulk of the change in the U.S. does include the care delivery services that we provide. Those are fee income services, and that was up moderately in the quarter as well. Um, I wouldn't expect that necessarily that trend line to repeat, but, um, it was favorable for this particular quarter. And then, in Canada, we have our CDCP program, our Dialogue business, etc. And that's performing very well, so that's where you're seeing the growth in the fee income.
Is this a run to be thinking about this as a run rate here or sorry? Um, I'll let you go Dan and then maybe the 2 of you can, uh, let me know if you think this is more of a run rate. What we see in this quarter for this line?
It's elevated. There is a couple of times that I alluded to, but as long as funds continue to perform in the wealth businesses, you'd expect continued growth in that line item.
Okay. I was going to make a different but related point because part of your question was, you know, the results were even despite the dental results. The results were still pretty close to Q1, the biggest uh...
um,
Positive there, and one that I think is worth highlighting was the really exceptional performance from our Employee Benefits business. That's the business with group life, disability, and voluntary products. That business had the best results it's ever had. That was driven both by growth and by margins.
Okay. Um, and then
also, if we look at other expenses, um,
That number is down 50 million quarter over quarter, kind of down 10 million.
From the second quarter of 2024, at $440 million, is this a trend that we should be thinking about with respect to this? Whether there are any one-time items, or is it lower incentive compensation and better expense control? How should we be thinking about that number and how it should go going forward? Thanks,
Hi Tom. It's Tim again. So, as you write, we did have favorable results in our other expenses. The numbers you referenced, Court, are recorded in a year or a year are correct. Most of that is coming from our corporate segment, and you can see the favorable result we had there.
This is driven mostly by the timing of initiative spend that we have, and as well as incentive compensation. As you highlighted, we do expect that initiative spend will ramp up a bit in the second half of the year. So, we will give back some of this favorability, but we haven't revised our overall expectation of roughly $100 million a quarter for the corporate segment. So you can use that as a better indicator. We are seeing great traction from our overall expense efficiency program.
We had 25 million of savings in the quarter. We're we're still well, on track for the 200 million in total cost efficiencies, by the end of 2026, uh, we have delivered about 66% of that to date. So we are taking, uh, action and and have been very disciplined on expenses. But there was some timing of favorability in that particular in the corporate segment.
In the corporate segment, it was 110.
And are you saying that it should be a 100 going forward per quarter? So it was actually a little bit higher.
Yeah, we get some volatility in that line. As I said, there are a number of factors that contribute to that. Um, we have...
The incentive composite referenced earlier. We also had lower, uh,
Interesting, come on debt. We had a repayment of the loan that we had, that was, uh, financing the bank Insurance agreement. We had in Indonesia. Uh, so I think the 100% more realistic number. We haven't tipped over that, actually, in recent quarters. And so,
That's generally the range that we expect to be in going forward. Okay, thanks.
The next question is from.
Persad with Cormark Securities. Please go ahead.
Yeah, thanks. I want to just, uh, turn back to the dental business here and, uh, a comment that was made earlier. So just to be clear, you have 1.2 billion of these customer related and tangibles on the, uh, the balance sheet in this quarter 61 million write off was, uh, 1 client. So, presumably if if other clients continue to leave sunlight, here that are attached to these intangibles. There could be further write down to these intangibles. Is that, is that correct?
the, the
You know, we can expect some volatility and customer relationships but there's also growth opportunity there. So, um, we're we're comfortable with the caring values that we have on those intangibles
Okay, and then just moving on to to MFS. And then the question is on margins. I wonder if you could talk about the outlook for margins on this business, I know there's seasonality here. It's quite well understood. So I'm talking about the 1.4% year-over-year Drop Inn in margins here. It's a bit.
A bit steeper than than I I had expected. And if I have it right, there's been year-over-year drops in 3 of The Past 4 quarters. So I'm just wondering, is there an emerging Trend here. Um, where margins are starting to move? Structurally lower at MFS? Or am I just kind of reading too much into it?
Sure. This is Tim. I'll start and see if Ted wants to supplement. So the the decline year on year that we saw in margin was really driven by lower average. Net assets, we had average net assets last
year in the second quarter of 620 million billion. And we and for a Q2 of this year it was 608. Now we saw a large spike in the AUM. At the end of the quarter. It um the funds really rallied, but it was a lower During the period given all the market uncertainty. So that is the single biggest driver to the margin. Change is the average net asset. And so the the 140 basis points that you reference here on yours is driven by that. The other Dynamic is uh MFS. Earns interesting, come on cash and short-term balances and not dissimilar to
To sunlight. Overall, those balances have have come down in the case of MFS it's because some of those short-term Investments have been used to seed funds like the ETF launches and and other products. So those balances are down and that coupled with lower. Short-term rates has has declined that but the biggest driver is going to be that average net assets and as you said, there is seasonality. So the first 2 quarters, we have incentive comp that goes through, that's when the, the awards mature and then in the SEC, the third and fourth quarter, we typically get much stronger results. So you'll see that margin Improvement. Uh, you know, when we look back at it it was hit, hit, hit 40% in in Q3 and Q4 in the past. And so as averaging an assets improve, you'll see that margin come back.
Gotcha. Thanks.
So this is Ted. So just to be clear um to summarize, no change to how we think about margins structurally, uh, through a cycle. And over time, um, as Tim just outlined, nothing that Tim outlined. Talked about the fundamental cost structure items, we managed costs extremely tightly, through all points of the cycle. Um, so that at times, when assets are down, we've got the other items that Tim talked about. We don't need to think about cutting into things that will harm long term results. So, um, again to wrap up, no change to long-term views on margins.
The next question is from Mario mandona with TD security, please go ahead.
Uh good morning. I have a sort of a related question about MFS margins. Um clearly that flows as well as what happened, inter quarter hurt the AUM.
But 1 could sort of easily come up with a period where markets are not accommodating markets are down. 10%, that's certainly.
Um, something we've all seen.
And outflows remain at this level.
We could clearly see a day or an environment where AUM is down.
Somewhat materially.
The question is, what is your capacity to manage expenses down?
Abruptly in a period where AUM is under pressure.
So, the vast majority of our expenses are actually completely variable with assets. So, um, the, you know, passively our our expenses, come down, um, as assets and and revenues come down. The, the remainder that is not, um, completely variable, um,
As I mentioned before, we managed pretty tightly and and we probably wouldn't pull those levers. So in a strong Market, correction downward. Um you would see some hit to margins but uh very much buffer buffered by the variable nature of our cost structure. Um, also while we're not a bare market shop per se, um it would be more likely than not that our performance relative to benchmarks would be strong in a down Equity Market environment, a sharp down Equity Market environment, um which would obviously be a good setup for future flows.
Strategic important, part of the company and in a downturn, uh, we we would be seeing as, as Ted said, likely you'd be seeing inflows because we believe in their active management, uh, investment, performance investment performance, and how they do that. And so we'd be careful not to damage the business in a downturn that that's going to be really important to us. That we think about this as uh long-term uh long-term important to us markets will go up and down and whatever we did on the expense side, we would make sure we did not do anything to damage MFS and I know that Ted's 100% behind that comment, but he's also got sunlife 100% behind that comment.
Did you see those sorts of inflows early in the quarter when things got messy, or you know, during 2002?
Um, sorry, 2022 and markets were soft. And did you see that sort of recovery in your net flows then?
You wouldn't see flows be that shortly following performance. So, we did see the performance that would have led to, uh, we believe, a longer-term flow tailwind. Um, but in an experience where the market is down sharply and we're outperforming, that doesn't translate 1-on-1 to flows. And, in fact, uh, what it tends to translate to, on the retail side in particular, is um, redemptions. Broadly, not specific to MFS, but redemptions broadly is um, retail clients.
Um, sell into weakness that perhaps they should be buying.
Okay. Uh, second question then is, if we go back, Tim, you, you may you express some confidence that there was no need for.
A write down of Goodwill on densest. And
You suggested that the fair value, still provided a lot of room but my question is this, how do you get there? Uh, what sort of fair value approaches? Are you using? Is it a? I I presume. It's a discounted cash flow approach or P or some kind of terminal value. But how do you get to that value? Considering where the profitability is currently,
Yeah, thanks Muriel. So, the Goodwill testing is a long-term test, right? And so the challenges that we've been describing on this, call are the near-term headwinds. Uh, but through the fullness of time with the repricing actions that Dan spoke about, uh, we expect that to recover. So I think that's the first main principle. This is, uh, a multi-year, uh, approach. It is typically a present value.
Uh, of the cash flows approach, we use external appraisals to help support that, and we combined that, um, business with our Commercial Business in the U.S. already. So we did have some extra, uh, business that was combined with that because we've integrated that now within our overall business. So there are other cash flows that help support that, but it's really the long-term outlook that we take on goodwill, and that's what's giving the cushion. Now, we'll have.
That short-term pressure. But when you the impact of that won't be, as significant versus the long term expectations,
It's clear. Thank you for the explanation.
The next question is from Darko Mitch with RBC Capital markets, please go ahead.
Hi, thank you. My question is for Kevin strain and I just wanted to touch on
how you view the quarter and year-to-date results from a slightly different angle and now that we've seen all the life goes report we you know investors and analysts sort of live in a relative world.
and when I look at things like business drivers,
I see some areas of that seem to suggest that we won't get stronger EPS growth in the future. I'm talking about things like CSM growth.
Where yours is the lowest new business CSM? There was no growth, your AUM is kind of going in the wrong direction. Um, and certainly not as strong as peers. So, Kevin, should we think about? Like, if we stand back and...
And look at these really important high-level drivers.
um, am I correct in thinking that it's signaling slower growth and does this sort of require much more much more buyback activity
Region for us in 15% plus and, and Canada at 6% plus where we're Big Brand, a big player in the Canadian Market. We have scale across all the businesses where leaders across all the businesses. And you saw the results that that managed doing. I talked about SLC, um, driving towards the 235, that we set an investor day and our commitment to the growth targets we put at out at investor day. Last investor day for SLC and the, the, the momentum we've got in flows and the momentum. We have there, and we like the balance of across Asset Management from, um, the uh, public equity and public fixed income, space under MFS into the alt space under SLC, and the combination of those things. So, you know, if I look at our medium term objectives, I feel like we're right.
On plan for Roe and for earnings I I think about the goal of 20% for earnings and the 17.6 and the quarter and it we're we're exactly where we would expect to be um and for cash flow, we continue to see really good cash flow in the dividend support which is the uh the other measure that we do. So I step back and look at it darker and say you know we're seeing momentum uh strong momentum in, Asia Canada. Uh the the us we do have a different mix of business from MFS and so some of that comes through where the CSM isn't as important to some of the group businesses and where a large group player in the US and in Canada, and I think it's important to to keep that perspective. And when I look at at the
the asset side, uh, we're performing
Strongly against competitors in the active Asset Management. Space MFS is and in the alt space. So I I step back and look at it and go, I I work fully committed to our medium-term objectives. We're fully committed to our plan, we like our, our mix of business. I talked about that, at the start that the, the model for our mix of business is strong. So, uh, I, I have a different. I have a different takeaway. And, uh, I have a deep understanding of all the businesses, and I think that we're driving towards achievement of those medium-term objectives.
And I appreciate that, but I guess I'm coming at it from the angle. Is it at the margin top line?
Do you see that? I mean, that's where I see on a relative basis, a bit of a Slowdown um and I guess you know, your ability to manage towards your objectives. May not necessarily depend on Top Line um at least not in the shorter term or do you view the top line as really not having any challenges here.
Well if you look at the Top Line, our growth flows for wealth sales and and asset management. It's up 23% year to date over the last year. Group Health and protection, sales are up 9% from last year individual protection sales are up. 15% from last year. New business CSM is up 7% so I'm looking at that's that's halfway through the year, that's year to date numbers. Um and we continue with a really strong Capital position that gives us flexibility as you mentioned, um, in terms of, um, BuyBacks and we are committed to
To our BuyBacks and we have a active buyback program and we'll we'll be active in that program. But also gives us flexibility for organic growth. Um, and also inorganic growth and I think that we've got all the levers to continue to meet those medium-term objectives.
Okay, great. Thank you very much.
Thanks.
This concludes the question-and-answer session. I’ll turn the call back over to Natalie Brady for closing remarks.
Thank you, operator. This concludes today's call a replay of the call will be available on the investor relations section of our website. Thank you and have a good day.
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