Sun Life Financial leads transformation of financial services sector in Canada

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TORONTO, June 4, 2003 – Sun Life Financial has led the way in the transformation of the financial services sector in Canada, Donald A. Stewart, Chief Executive Officer, told shareholders and policyholders at the Company’s annual general meeting today in Toronto.

Mr. Stewart cited the successful combination of Clarica Life Insurance Company (Clarica) with Sun Life Financial’s Canadian operations as a transaction that “created a powerful market presence — a major player in the financial services arena. The move bolstered our Canadian business, solidified our top tier position and reinforced our ability to continue growing internationally.”

Mr. Stewart also spoke of the ongoing efforts to “fuel and support a family of distinct brands that are geared to specific markets and customer expectations. The management of a number of unique brands, within the context of a strong worldwide brand, is a capability we’re continuing to develop.”

Mr. Stewart built on earlier contributions to the important public policy debate on the ongoing consolidation of the financial services sector in Canada.

“The international competitiveness of the Canadian financial services sector has become a critical public policy issue,” said Mr. Stewart. “If our financial institutions are not competitive on the international stage, they will be unable to deliver world-class services to Canadian consumers over the long term.”

He added that a number of criteria would need to be used to measure the success of a ‘cross pillar’ merger and that “the merging of a major life insurance company and a major bank would create few synergies and would detract from international competitiveness. We believe these type of mergers offer little to shareholders, and do not serve the public interest.”

Paul Derksen, Executive Vice-President and Chief Financial Officer, said “2002 was another year of significant accomplishments in which key milestones were met and gains from the strategic initiatives taken in prior years were consolidated.” He cited the transaction with Clarica, the acquisition of a 30 per cent interest in CI Funds and the completion of the integration of Keyport and IFMG as the major accomplishments of the year.

Highlights of major accomplishments since last year’s annual meeting include:

  • Record operating earnings of $1.26 billion and record net profit of $998 million in 2002;
  • Meeting all interim financial targets set for the Clarica transaction, which has established Sun Life Financial as a Canadian market leader in financial services;
  • Completing the integration of Keyport Life and Independent Financial Marketing Group into Sun Life Financial’s U.S. business, meeting all of the interim targets;
  • Restructuring of the U.K. operations, which began in 2001, was completed; and
  • Strong sales in the first full year of operations in China and at the Company’s joint venture operations in India.

“Looking forward, our balanced business model has positioned us well to generate stable earnings even under difficult equity market conditions,” said Mr. Derksen. “In a recovering equity market, we see significant earnings upside potential.”

As previously announced on April 3, 2003, William W. Stinson assumed the position of Chairman of the Board of Directors for both Sun Life Financial and Sun Life Assurance Company of Canada, immediately following the Annual Meeting. Mr. Stewart will continue as Chief Executive Officer and as an ongoing member of the two Boards.

Mr. Stinson said that “the decision to separate the roles of Chairman and CEO demonstrates that the organization is responsive to evolving expectations and norms.”

Mr. Stinson also outlined changes to the elected term of directors, explaining that the Board was replacing the current model of rotating three-year terms with the annual election of directors, which, he said “has significant merit and is now the preferred standard among many of our stakeholders.”

Sun Life Financial is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Tracing its roots back to 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2003, the Sun Life Financial group of companies has total assets under management of CDN $336.8 billion.