Sun Life (TSX: SLF)(NYSE: SLF) is one of Canada’s largest life insurance companies. The company has a 155-year history and a depth of experience which helped it to successfully navigate the challenges of the pandemic. Sun Life helps clients achieve lifetime financial security and live healthier lives.
Against this backdrop, Sun Life continues to deliver exceptional value for the company’s shareholders. The company’s annualized total shareholder return (TSR) of 7% and 9.6%, for three- and five-year periods ending in 2020 places it in the top quartile compared to global industry peers.
With a life insurance capital adequacy test (LICAT) ratio of 147%, Sun Life’s capital strength is excellent given that the LICAT ratio is well above the required minimum.
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Diversified and balanced business model
In addition, Sun Life’s diversified and balanced business model, combined with the company’s robust risk management approach and strong capital position, is a key strength.
During COVID-19, the company adhered to a disciplined approach to capital allocation, which included making robust investments to grow Sun Life’s business organically, acquisitions and partnerships that accelerated Sun Life’s strategy, and return of capital to Sun Life’s shareholders through dividends.
Further, Sun Life’s long-standing strategic focus on digital innovation served it well as the company expanded Sun Life’s digital offerings and interactive tools, making it easier to do business with it. The company’s digital capabilities proved to be a difference-maker in 2020, allowing it to communicate effectively with clients, employees, and advisors.
Focus on sustainability
As a global organization, Sun Life’s board of directors and executive team appear committed to Sun Life’s continued growth as a sustainable company. The board recognizes that by fulfilling the company’s environmental, social, and governance (ESG) responsibilities, the company creates long-term value for Sun Life’s clients, employees, communities, and shareholders.
Also, Sun Life won the 2020 corporate sustainability bond of the year award reflecting the company’s sustainable investment strategy, and it continues to consider ESG factors in all of Sun Life’s investment decisions.
Response to COVID-19
As 2020 began, no one could have predicted the incredible circumstances the world would face from the COVID-19 pandemic. Every business was challenged in unimaginable ways. Yet through it all, Sun Life employees and advisors around the world went the extra mile to serve and support the company’s clients.
That client support took many forms. Sun Life expedited payments to clients diagnosed with COVID-19 and provided options for clients struggling to pay premiums, to help customers keep policies in force at a critical time.
The company stepped up communication with special webinars for clients and advisors to keep customers informed on issues related to the pandemic. Sun Life delivered nearly $200 million of payments to the families of clients who succumbed to COVID-19. The company’s investment and wealth teams helped clients navigate choppy seas with a steady and opportunistic approach to investing throughout the year.
Furthermore, Sun Life worked with tenants and borrowers whose finances were the hardest hit. Overall, the company’s excellent reaction to the global pandemic helped it build trust which should serve it well over the long term.
