Mr. Kevin Strain reports

SUN LIFE REPORTS FIRST QUARTER 2023 RESULTS

Sun Life Financial Inc. has released its results for the first quarter ended March 31, 2023.

• Underlying net income(1) of $895 million increased $175 million or 24% from Q1'22(2); underlying ROE(1) was 17.3%.
  • Wealth & asset management underlying net income(1): $411 million, down $11 million or 3%.
  • Group - Health & Protection underlying net income(1): $303 million, up $180 million or 146%.
  • Individual - Protection underlying net income(1): $291 million, up $42 million or 17%.
• Reported net income of $806 million increased $141 million or 21% from Q1'22(2); reported ROE(1) was 15.6%.
• Increase to common share dividend from $0.72 to $0.75 per share.

"We started 2023 with strong results driven by our execution capabilities and growth in our health and protection businesses, highlighting the resilience of our business mix. We generated strong growth in both health and protection sales, which reinforces the importance Clients continue to place on health and financial security," said Kevin Strain, President and CEO of Sun Life. "This is Sun Life's first quarter reporting under IFRS 17 and IFRS 9. A special thank you to all of the Sun Lifers involved in these efforts. While the adoption of these standards will impact how and when some of our business results are reported, it does not change our Client Impact Strategy, our strong fundamentals or our capital strength."

"We are helping our Clients to achieve lifetime financial security and live healthier lives by advancing our Client Impact Strategy with digital tools and new products. For example, in Canada, we expanded access to Sun Life One Plan to more than 750,000 Clients in our Group Retirement Services business, a digital tool that provides Clients with a financial roadmap. And in Hong Kong, we launched two new products designed to offer long-term financial growth potential, while actively integrating ESG concepts into investment strategies."

Underlying net income(1) of $895 million increased $175 million or 24% from prior year, driven by:

• Wealth & asset management(1) down $11 million: Lower fee-based earnings in MFS, Canada, and Asia, reflecting equity market declines, largely offset by an increase in investment income driven by higher volumes and yields.
• Group - Health & Protection(1) up $180 million: Strong performance including premium growth, improved disability in Canada and the U.S., strong medical stop-loss margins, and improved U.S. mortality. DentaQuest results also contributed to the increase.
• Individual - Protection(1) up $42 million: Higher premiums reflecting good sales momentum during the past year, and improved mortality in Asia.
• Corporate expenses & other(1) $(36) million increased net loss: Higher operating expenses including long-term incentive compensation and IFRS 17 project spend, as well as an increase in debt financing costs. Higher investment income reflecting an increase in realized gains from surplus assets and net interest income from higher rates.

Reported net income of $806 million increased $141 million or 21%, driven by the increase in underlying net income and:

• Gain on the sale of the sponsored markets business in Canada (2); partially offset by
• Market-related impacts; and
• DentaQuest integration and SLC Management acquisition-related costs.

Asset Management: A global leader in both public and alternative asset classes through MFS and SLC Management

Asset Management underlying net income of $282 million decreased $39 million or 12% from prior year, driven by:

• MFS down $27 million: Lower average net assets ("ANA") reflecting equity market declines and net outflows, partially offset by lower variable compensation expenses and higher net investment income. The MFS(3) pre-tax net operating profit margin(4) was 37% for Q1'23, compared to 39% in the prior year.
• SLC Management down $12 million: Fee-related earnings(4) increased 26% driven by higher AUM, reflecting strong capital raising and deployment across the platform. Fee-related earnings margin(4) for Q1'23 was 24% compared to 23% in the prior year. Underlying net income was down from prior year, as fee-related earnings growth was more than offset by higher financing costs on seed investments, as well as higher compensation expenses.

Reported net income of $254 million decreased $57 million or 18%, driven by the decline in underlying net income and SLC Management acquisition-related costs.

(1) Refer to section C - Profitability in the Q1'23 MD&A for more information on notable items attributable to reported & underlying net income items and the Non-IFRS Financial Measures in this document for a reconciliation between reported net income and underlying net income. For more information about the business types in Sun Life's operating segments/business groups, see section A - How We Report Our Results in the Q1'23 MD&A.

(2) On February 1, 2023, we completed the sale of the sponsored markets business from Sun Life Assurance, a wholly owned subsidiary of SLF Inc., to Canadian Premier Life Insurance Company ("sale of the sponsored markets business").

(3) MFS Investment Management ("MFS").

(4) Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in the Q1'23 MD&A.

Foreign exchange translation led to an increase of $16 million and $15 million in underlying net income and reported net income, respectively.

Asset Management ended Q1'23 with $989 billion of AUM, consisting of $771 billion (US$570 billion) in MFS and $218 billion in SLC Management. Total Asset Management net outflows of $2.5 billion in Q1'23 reflected MFS net outflows of $5.8 billion (US$4.3 billion) partially offset by SLC Management net inflows of $3.2 billion.

MFS continued to deliver on its long-term track record as a top-performing active asset manager. MFS ranked in the top 10(1) for five-and ten-year performance categories across U.S. retail funds, marking the 14th time in the last 15 years that MFS has achieved this recognition.

On February 1, we completed the acquisition of a 51%(2) interest in Advisors Asset Management, Inc. ("AAM"), a leading independent U.S. retail distribution firm, with the option to acquire the remaining interest starting in 2028. AAM's strong U.S. retail distribution capabilities provides an attractive opportunity for SLC Management to meet the growing demand for alternative assets among U.S. High-Net-Worth ("HNW") investors.

During the quarter, BentallGreenOak ("BGO") was awarded the 2023 ENERGY STAR(TM) Partner of The Year - Sustained Excellence Award by the U.S. Environmental Protection Agency and the U.S. Department of Energy ("DOE") for the 13th consecutive year, demonstrating its dedication to combatting climate change through energy efficiency and decarbonization. In addition, the BGO Prime Canadian Property Strategy won the 2023 Pension Real Estate Association ("PREA") Open-End Fund ESG Award, demonstrating the integration of ESG throughout its investment practices.

Canada: A leader in health, wealth, and insurance

Canada underlying net income of $316 million increased $110 million or 53% from prior year, reflecting:

• Wealth & asset management up $34 million: Increase in investment income driven by higher volume and yields, partially offset by lower fee-based earnings reflecting equity market declines over the past year.
• Group - Health & Protection up $36 million: Improved disability, reflecting higher margins and shorter claims durations.
• Individual - Protection up $40 million: Higher premiums reflecting good sales momentum during the past year and higher investment contributions.
• Higher investment income reflecting an increase in realized gains from surplus assets and net interest income from higher rates.

Reported net income of $329 million increased $73 million or 29% from prior year, reflecting the increase in underlying net income and a gain on sale of the sponsored markets business, partially offset by market-related impacts from interest rate movements and real estate investments.

Canada's sales(3):

• Wealth sales & asset management gross flows of $3 billion were down 23%, reflecting lower defined contribution sales in Group Retirement Services ("GRS") and lower mutual fund sales in individual wealth.
• Group sales of $145 million were down 34%, reflecting large case sales in the prior year.
• Individual sales of $136 million were up 21%, reflecting higher participating whole life insurance sales.

We continue to execute on our Purpose of helping Clients achieve lifetime financial security and live healthier lives. In the first quarter, we enhanced the Sun Life One Plan digital tool to enable Clients to directly update their financial roadmaps as frequently as they would like, while collaborating with their advisor on personalized goals. We introduced this tool to retail Clients in 2022 and in 2023 expanded to include over 750,000 Clients in GRS, with nearly 100,000 financial roadmaps created to-date for retail Clients in Canada using tools including Sun Life One Plan.

In addition, Prospr by Sun Life, our hybrid advice solution which combines a best-in-class digital platform with a team of licensed advisors, continues to build momentum with significant growth in unique site visitors over last year. We continue to introduce new capabilities, including providing Clients the ability to link external accounts to their Prospr by Sun Life profile, leveraging the tool as a holistic financial roadmap to track and prioritize goals in one place.

U.S.: A leader in health and benefits

U.S. underlying net income of $237 million increased $130 million from prior year, driven by:

• Group - Health & Protection up $144 million: Strong performance across all businesses including premium growth, contribution from the DentaQuest acquisition, and favourable experience. Experience in the quarter included strong medical stop-loss margins, partially offset by group mortality. Mortality was down significantly compared to pandemic-related experience in the prior year.
• Individual - Protection down $14 million: Unfavourable mortality experience in the quarter reflecting higher claim amounts.

Reported net income of $168 million increased $112 million from prior year, reflecting the increase in underlying net income and market-related impacts. This was partially offset by DentaQuest integration costs and amortization of acquired intangible assets.

Foreign exchange translation led to an increase of $15 million and $12 million in underlying net income and reported net income, respectively.

U.S. group sales of $373 million were up $225 million, driven by higher dental(4) and employee benefits sales.

(1) Barron's 2022 Best Fund Families rankings.

(2) On a fully diluted basis.

(3) Compared to the prior year.

(4) Dental sales include sales from DentaQuest, acquired on June 1, 2022.

We continue to advance our strategy of helping more people get the health care and coverage they need. In Q1, Sun Life was selected as the new commercial dental benefits provider for the employees of the State of West Virginia and DentaQuest was awarded the government dental benefits contract for Medicaid enrollees in Oklahoma focusing on preventive care and improved oral health outcomes. These awards, along with other sales in the first quarter, are expected to add approximately 650,000 dental members over the next year.

In our Group Benefits business, we advanced our strategy of making care and benefits access easier for our Clients through digital solutions by working with two care management partners. We added a digital, on-demand wellness program for our life insurance members supporting emotional and mental health with tailored content and activities. We also provided access to personalized care services, to improve treatment for musculoskeletal conditions and long COVID-19, for our disability members.

Asia: A regional leader focused on fast-growing markets

Asia underlying net income of $141 million increased $8 million or 6% from prior year, driven by:

• Wealth & asset management down $6 million: Lower fee-based earnings largely reflecting equity market declines.
• Individual - Protection up $11 million: Higher premiums reflecting good sales momentum during the past year, and improved mortality, partially offset by lower investment contributions.

Regional office expenses & other up $3 million.

Reported net income of $134 million increased $23 million or 21% from prior year, driven by market-related impacts. Favourable interest rate impacts were largely offset by market-related impacts from real estate investments.

Foreign exchange translation led to an increase of $3 million and $7 million in underlying net income and reported net income, respectively.

Asia's sales(1):

• Wealth sales & asset management gross flows of $2 billion were down 31%, primarily reflecting lower money market fund sales in the Philippines.
• Individual sales of $375 million were up 26%, driven by higher sales in India, Hong Kong, International and the Philippines.

New business CSM of $102 million in Q1'23, compared to $51 million in the prior year, was primarily driven by sales and favourable product mix in High-Net-Worth, the Philippines and Hong Kong .

We continued to build on our Purpose to help Clients achieve lifetime financial security and live healthier lives by offering innovative products that fulfill their needs. In Q1, we launched two new products(2) in Hong Kong designed to offer long-term financial growth potential and flexible cash withdrawal options for Clients, which actively integrate environmental, social, and governance ("ESG") concepts into investment strategies. We saw strong Client reception for these products, representing over 20% of individual protection sales in Hong Kong in the first quarter.

In the Philippines, we maintained our leadership position ranking first for new business premiums and total premiums in 2022 reflecting our strong product offering and exceptional service to Clients. Our focus on making a difference in the lives of our Clients was recognized by our Platinum award(3) for most trusted brand in the life insurance industry in the Philippines for the 13th consecutive year.

Corporate

Corporate underlying net loss was $81 million compared to underlying net loss of $47 million in the prior year, reflecting higher operating expenses including long-term incentive compensation and IFRS 17 project spend, as well as an increase in debt financing costs.

Reported net loss was $79 million compared to reported net loss of $69 million in the prior year, reflecting the change in underlying net loss, partially offset by market-related impacts.

(1) Compared to the prior year.

(2) SunJoy and SunGift.

(3) Trusted Brand Awards.

Earnings Conference Call

The Company's Q1'23 financial results will be reviewed at a conference call on Friday, May 12, 2023, at 10:00 a.m. ET. Visit the Sun Life website 10 minutes prior to the start of the event to access the call through either the webcast or conference call options. Individuals participating in the call in a listen-only mode are encouraged to connect via our webcast. Following the call, the webcast and presentation will be archived and made available on the Company's website until the Q1 2024 period end.

We seek Safe Harbor.