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  • Prepared For:Prepared By: Edit Name on Title Master Edit Title on Title Master Edit Phone on Title Master Edit Name on Title Master Edit Title on Title Master [Type of Presentation] MARCH 2010
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  • 2 Sun Life Financial: ABOUT US
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  • 3 Our mission: help clients achieve lifetime security ProtectionSavings Importance Buy a car Changing Needs (Age) Protect loves ones if I die Provide income if unable to work Save for education Begin retirement savings (tax advantages) Buy a home Protect savings from market volatility Start a business Protect my business Protect assets if a loved one becomes ill Buy a second home Early retirement Travel Protect assets from major health set back Retirement Pass on assets 20304050607080 Providing solutions across a lifespan of financial needs
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  • 4 Global leader operating in 22 countries worldwide Sun Life Financial around the world MFS Headquarters MFS investment and marketing/service offices Canada United States Bermuda Ireland United Kingdom China Hong Kong India Phillippines Indonesia Toronto Mexico City Sao Paulo Bueno Aires London Madrid Milan Rotterdam Berlin Munich Tokyo Taipei Sydney Singapore
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  • 5 Fifth largest insurer in North America * Bloomberg, October 30, 2009 Market capitalization in billions
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  • 6 U.S.CanadaMFSAsiaU.K. Individual Life and Health Group Life and Health Group Pension Mutual Funds Asset Management Mutual Funds Asset Management Life and Annuity Policies Individual Life Individual Annuity Group Life and Health Individual Life and Health Individual Annuity Group Life and Health Group Pension Mutual Funds Asset Management Products and Services Sun Life Financial Diversified mix of products and services
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  • 7 Geographic Diversification*Business Diversification** *Based on LTM Q3 2009 Revenue (C$): Excludes proceeds from gain on sale of CI Financial **Based on LTM Q309 VNB (C$) LTM Q3 2009 40% Wealth Management 60% Protection Canada 42% 40% U.S. 8% 6% 7% Corporate Asia MFS Diversified sources of revenue Percent of revenue by geography and product category
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  • 8 1 Outlook stable. 2 Negative outlook. As of September 31, 2009 A.M.Best (as of Feb. 2009) Standard & Poors (as of March 2009) Moodys (as of Feb. 2009) Sun Life Assurance Company of Canada A+ 1 (Superior) Second of 16 rating levels AA 2 (Very Strong) Third of 20 rating levels Aa3 1 (Excellent) Fourth of 21 rating levels Sun Life Assurance Company of Canada (U.S.) A+ 1 (Superior) Second of 16 rating levels AA 2 (Very Strong) Third of 20 rating levels Aa3 2 (Excellent) Fourth of 21 rating levels Sun Life Insurance and Annuity Company of New York A+ 1 (Superior) Second of 16 rating levels AA 2 (Very Strong) Third of 20 rating levels Not rated Among the industrys most highly rated companies Ratings from independent industry analysts
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  • 9 1 The Other category is composed primarily of policyholder loans, derivative assets, investments in limited partnerships, and our equity investments in MFS. Four percent, or $4.5 billion, is invested in equities. About 50% of this equity portfolio is invested in North American exchange-traded funds, with the remainder invested in common and preferred shares in Canada, the United States, the United Kingdom, and Asia (primarily in Hong Kong). Prudently invested company assets Percentage of assets invested in different asset classes 8% Equities Cash Real Estate Other 1 5% 4% 7% Bonds 55% Mortgages and Corp Loans 21% Bond portfolio includes over 1,200 borrowers from around the world; and 97% of total bond portfolio was investment grade Holding $8.9B in cash, cash equivalents and short-term securities, and $13B in government bonds Exposure to residential sub-prime and Alt-A loans was $350M (92% issued before 2006 or have an AAA rating)
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  • 10 Disciplined investment philosophy 145 years of financial stability Total assets under management of US: $385 billion (as of September 30, 2009 for the Sun Life Financial group of companies) How we manage risk: Pillars of risk management Safeguarding reserves and capital Prudent investment approach Active risk management
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  • 11 How were communicating our financial strength Over 20 million customers worldwide 145 years in business A+ credit rating Never taken bailout money
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  • 12 Sun Life Financials connection with Churchill
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  • 13 1988 Introduces SLF Futurity brand 1982 Introduces first VA with no upfront sales charge 1971 Enters annuity market with variable annuity 2000 Initial Public Offering (ticker symbol SLF) 1989 Introduces MFS Regatta brand 2004 Introduces Sun Life Financial Masters brand 2007 Introduces Income ON Demand 1865 Company is chartered 1982 Acquires MFS 1999 Introduces Earnings Enhancement Benefit 2008 Introduces Retirement Income Escalator 1895 Enters U.S. market History of innovation
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  • 14 In the U.S.: 8 dedicated departments 150+ employees 75 actuaries hold FSA professional designation 10 CFAs Risk management: general Strong enterprise risk management 2008 score from Standard & Poors. This rating placed us in the upper echelon of rated North American insurers for 2008.
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  • 15 Strategic ways we minimize risk Risk management oversight of product development process Peer review Corporate Office sign-off Hedging programs First VA hedges put on in 1999 VA dynamic hedging since 2004 system originally developed in 1990s for other products Externally peer reviewed Risk tolerance limits Board-mandated risk limits and reporting Chief Risk Officer oversight and monitoring Stochastic valuation Canadian principles-based reserves Regulatory capital Canadian and U.S. Economic Capital under development
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  • 16 Q1 2010 FeesCompensation Optional Death Benefits Withdrawal Benefit % and Tiers Initial Equity Allocation Ongoing Equity Allocation Step Ups No. of Benefits Phase 1 Q1 & Q2 2009 12 Phase 2 Q3 2009 Phase 3 2010 3 Ongoing de-risking of our variable annuity products Product levers to impact risk and profitability
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  • 17 Strong corporate reserves and capital position Sun Life Assurance Company of Canada (U.S.) NAIC Risk Based Capital (RBC): Expected minimum ratio: 200% Sun Life Assurance Company of Canada Minimum Continuing Capital & Surplus Requirement (MCCSR) Sun Life RBC ratio as of 12/31/08: 150% Sun Life RBC ratio as of 12/31/08: 357% Sun Life MCCSR ratio as of 9/30/09: 357%
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  • 18 Level of Strategic Alignment HIGH Loss ControlBalance Sheet Protection Compliance Loss Minimization Risk Measurement Risk Management Return Optimization Risk Management Objective Weak Practices Better Practices Best Practices Risk / Return Optimization Value Maximization LOW Best practices risk management Strategic Planning Integration
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  • 19 Our annuity product strategy Product focus Focus on core VA product Opportunistic approach to FA Exiting non-registered FIA Examining market and product extensions Simplified VA product portfolio Reduced number of living and death benefits from 12 to 3 Product design changes to align interests of shareholder, customer & distributor Reduced equity exposure Reduced benefits/increased fees in line with competition Reduced compensation Result: Current product improves profitability and has reduced the capital at risk
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  • MCCSR Ratio 20 Represents the MCCSR ratio of Sun Life Assurance Company of Canada and the RBC ratio of Sun Life Assurance Company of Canada (U.S.). RBC Ratio 404% 407% 339% 358%300-350% Note: MCCSR applies to all Sun Life, while RBC applies to Sun Life U.S. only (approx 20% of total capital base) 238% 216% 222% 213% 232% Well capitalized: MCCSR Ratio
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  • 21 About Sun Life Financial BUSINESS OVERVIEW
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  • 22 The market potential for each business will drive our actions Markets Products Develop focused portfolio to meet evolving distribution and customer needs and deliver shareholder value Operations and Culture Anticipate and efficiently service customer needs through a high performance culture Financial and Risk Management Distribution Expand distribution capacity and capability Ensure growth is profitable and sustainable Leverage risk management as a core discipline Solid foundation for sustainable growth Drive focus, build scale and simplify
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  • Percentage of revenues by business line 23 50% Annuities 29% Individuals 21% Employee Benefits Group 2009 revenue by business unit
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  • 24 Aligning markets, products and distribution AnnuitiesEBGLife Wholesale Distribution (SLFD/EBG) Strategic Partnerships Wirehouses Regional Independent Firms Banks Broker General Agents Brokers Consultants Consumer Marketing Business and Product Lines Variable Annuities Core Universal Life M Financial
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  • 25 About Sun Life Financial BRAND
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  • 26 9 Increasing brand awareness
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  • 27 Increasing brand awareness Goal Increase aided brand awareness to drive profitable growth Targets Financial professionals Consumers Advertising Strategy Drive name recognition and inform Be fun and engaging Employ viral elements to create buzz
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