Sun Life Financial poised for “profitable” growth in Canada over the next several years

TORONTO, Jan. 20, 2004 – Sun Life Financial Inc. (NYSE/TSX: SLF) is “poised for profitable growth in Canada over the next several years” following the successful integration of Clarica operations, C. James Prieur, President and Chief Operating Officer, told the RBC Capital Markets, Canadian Financial Services conference.

He said integration achieved all of the financial objectives for cost savings and that the earnings per share (EPS) accretion target for 2003 of 20 cents had been exceeded.

Prieur said “Sun Life Financial’s competitive advantage in Group Benefits (GB) and Group Retirement Services (GRS) is our industry-leading technology, which provides customized, value-added delivery of benefits to our customers. A key decision early in the integration planning was to combine all of our group business onto one platform, avoiding the increased cost and complexity of maintaining two or more legacy systems”, he said.

In GRS, Prieur said, “Sun Life Financial has the highest plan member to employee ratio in the industry. Also, leading technology and state-of-the-art E-capability have created a better customer experience that, in turn, has led to high levels of customer loyalty. We view these businesses as having good potential for future growth.”

Prieur said that in the fourth quarter of 2003, resources were rededicated to the important task of restoring growth in the Independent Career Advisor sales force resulting in 43 new advisors, raising the total at yearend to 4,135. “This strong quarter puts us back on track to achieve the long-term target of growing the ICA to 5,000. Having the largest retail sales force in Canada has enabled us to invest in state-of-the art point of sale technology to enhance advisor productivity and help drive unit costs down to the lowest in the industry.”

The Sun Life Financial executive told the conference “our stake in CI Funds gives us a strategic holding in a leader in the Canadian mutual fund industry. With industry-leading distribution capabilities, outstanding asset management and an efficient cost structure, we view CI as the strongest wealth management platform in Canada, and our 34 per cent interest will allow us to participate in their growth in a meaningful way”, Prieur said.

“While we have competitive positions in each of our three U.S. businesses, we continue to feel that establishing a top 10 position is important to sustaining those positions. While consolidation in the U.S. market is showing signs of accelerating, particularly in the Group business, we will be disciplined and therefore very selective in determining how we willparticipate in the consolidation”, Prieur noted.

He said that throughout 2003, MFS has continued the successful diversification of its business with institutional Assets Under Management growing by 62 per cent to end the year at U.S.$21 billion. MFS experienced aggregate net sales in 2003, including sales of retail mutual funds, institutional funds and variable annuities, of U.S.$4.2 billion, up from U.S.$3.2 billion in 2002.

Prieur said “in 2004, with the task of integration completed, we plan to capitalize on our market leadership position in Canada to capture market share in each of our core businesses. We look to participate selectively in consolidation in the U.S. life sector and we will continue to use capital management, including through our recently announced share buyback to increase our return on equity by 75-100 basis points per year.”

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 September 30, 2003, the Sun Life Financial group of companies had total assets under management of CDN $348.5 billion. (