Q2 FY2026
Filed Aug 6, 2026Sun Life Reports Second Quarter 2026 Results
Underlying net income increased $108 million or 11% to $1,123 million, reported net income increased $292 million or 41% to $1,008 million, and underlying ROE increased to 19.1% from 17.6%. Growth was led by Canada, Asia and the U.S., while the Corporate underlying net loss increased.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Underlying net incomenon-GAAP | $1,123 million | – | 11% |
| Reported net income - Common shareholdersother | $1,008 million | – | 41% |
| Underlying EPS (diluted)non-GAAP | $2.02 | – | 13% |
| Reported EPS (diluted)other | $1.81 | – | 44% |
| Underlying ROEnon-GAAP | 19.1% | – | – |
| Reported ROEother | 17.2% | – | – |
| Asset management gross flows & wealth salesnon-GAAP | $82,655 million | – | 55% |
| Asset management net flows & net wealth salesnon-GAAP | $2,105 million | – | – |
| Group insurance salesnon-GAAP | $680 million | – | 27% |
| Individual insurance salesnon-GAAP | $1,002 million | – | 16% |
| Assets under managementnon-GAAP | $1,696 billion | – | 10% |
| New business Contractual Service Marginnon-GAAP | $400 million | – | – |
| SLF Inc. LICAT ratioother | 145% | – | – |
| Sun Life Assurance LICAT ratioother | 133% | – | – |
| Financial leverage rationon-GAAP | 23.8% | – | – |
| Sun Life Asset Management underlying net incomenon-GAAP | US$262 million | – | 4% |
| Sun Life Asset Management reported net incomeother | US$243 million | – | 14% |
| Sun Life Asset Management gross flowsnon-GAAP | US$19.0 billion increase | – | 55% |
| Total Sun Life Asset Management AUMnon-GAAP | US$917.7 billion | – | – |
| Total Sun Life Asset Management managed assetsnon-GAAP | US$1,034.9 billion | – | 7% |
| Total Sun Life Asset Management net inflowsnon-GAAP | US$1.5 billion | – | – |
| MFS AUMnon-GAAP | US$644.7 billion | – | – |
| SLC Management AUMnon-GAAP | US$193.6 billion | – | – |
| Solutions & Other AUMnon-GAAP | US$79.4 billion | – | – |
| MFS pre-tax net operating profit marginnon-GAAP | 35.7% | – | – |
| SLC Management fee-related earnings marginnon-GAAP | 26.3% | – | – |
| MFS net outflowsnon-GAAP | US$22.9 billion | – | – |
| Solutions & Other net inflowsnon-GAAP | US$19.7 billion | – | – |
| SLC Management net inflowsnon-GAAP | US$4.6 billion | – | – |
| Asia new business CSMnon-GAAP | $277 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Sun Life Asset ManagementUnderlying net income of US$262 million increased US$11 million, driven by MFS higher fee income from higher average net assets and SLC Management higher net seed investment income; fee-related earnings were in line with the prior year. | not reported | – | 4% |
| CanadaUnderlying net income of $427 million increased $80 million, driven by higher Sun Life Health premiums, favourable morbidity and mortality experience, and higher Group Wealth fee income, partly offset by lower earnings on surplus. | not reported | – | 23% |
| U.S.Underlying net income of US$164 million increased US$21 million, driven by medical stop-loss revenue growth and favourable In-force Management experience, partly offset by lower Employee Benefits results. | not reported | – | 15% |
| AsiaUnderlying net income of $222 million increased $34 million, driven by Hong Kong sales momentum and in-force business growth, lower expenses and favourable credit experience, partly offset by lower administration fee income in Hong Kong. | not reported | – | 18% |
| CorporateUnderlying net loss was $117 million compared to an underlying net loss of $62 million, reflecting higher financing costs supporting the acquisition of remaining interests in SLC Management affiliates, higher incentive compensation, and prior-year favourability from timing of strategic investment spend. | not reported | – | – |
What drove it
- Canada underlying net income benefited from business growth, favourable morbidity and mortality experience, and higher Group Wealth AUMA.
- U.S. medical stop-loss sales were supported by strong close rates, pricing discipline supported by risk selection tools, and favourable market conditions.
- Asia individual insurance sales rose on higher Hong Kong sales across all channels and growth in India, Malaysia and Indonesia, primarily through bancassurance.
- Sun Life Asset Management gross flows reflected a large public fixed income mandate funded at ABSLAMC.
- Reported net income benefited from favourable public equity market impacts, improved other market-related impacts, improved real estate experience, and a prior-year U.S. Dental impairment charge.
Concerns
- MFS recorded net outflows of US$22.9 billion, including retail net outflows of US$13.7 billion and institutional net outflows of US$9.2 billion.
- Asia new business CSM of $277 million was down from $299 million, reflecting an increasing competitive environment primarily in Hong Kong.
- Corporate underlying net loss increased to $117 million from $62 million due to financing costs, higher incentive compensation, and prior-year timing favourability.
- Financial leverage ratio was 23.8%, compared with 20.4% in the prior year.
- SLF Inc. LICAT ratio was 145%, compared with 151% in the prior year.
What to watch
- Whether the large public fixed income mandate at ABSLAMC and SLC Management capital raising continue to offset MFS net outflows.
- MFS retail and institutional flow trends, following US$22.9 billion of Q2'26 net outflows.
- Asia new business CSM amid the increasing competitive environment in Hong Kong.
- The effect of higher financing costs associated with acquiring the remaining interests in SLC Management affiliates.
- Execution following the July 2, 2026 acquisition of Bell Partners and the continued build-out of alternatives and private credit capabilities.
Balance sheet and cash flow
- Cash and other liquid assets, held at SLF Inc. and its wholly owned holding companies, were $2,292 million as at June 30, 2026, compared with $2,396 million as at December 31, 2025.
- Cash, cash equivalents & short-term securities were $1,951 million as at June 30, 2026, compared with $1,859 million as at December 31, 2025.
- Debt securities were $341 million as at June 30, 2026, compared with $537 million as at December 31, 2025.
- General fund assets were $243,094 million at Q2'26, compared with $220,671 million at Q2'25.
- Segregated funds were $182,236 million at Q2'26, compared with $155,616 million at Q2'25.
- Third-party and other AUM was $1,357,330 million at Q2'26, compared with $1,214,483 million at Q2'25.
- Consolidation adjustments were $(86,210) million at Q2'26, compared with $(49,564) million at Q2'25.
- Total assets under management were $1,696,450 million at Q2'26, compared with $1,541,206 million at Q2'25.
Analysis
Sun Life reported broad underlying earnings growth in Q2'26. Underlying net income increased $108 million or 11% to $1,123 million and underlying EPS increased 13% to $2.02. Reported net income increased $292 million or 41% to $1,008 million and reported EPS increased 44% to $1.81. Underlying ROE improved to 19.1% from 17.6%, while reported ROE improved to 17.2% from 12.4%. Reported earnings also benefited from favourable public equity market impacts, improved other market-related impacts, improved real estate experience, and the comparison with a prior-year U.S. Dental impairment charge.
Canada was the largest contributor to underlying net income growth, with income rising $80 million or 23% to $427 million. The U.S. added US$21 million, or 15%, to US$164 million, supported by medical stop-loss revenue growth and favourable In-force Management experience. Asia added $34 million, or 18%, to $222 million on Hong Kong business growth, lower expenses and favourable credit experience. Sun Life Asset Management underlying net income increased US$11 million, or 4%, to US$262 million. These advances were partly offset by a larger Corporate underlying net loss of $117 million, compared with $62 million in the prior year.
Growth indicators were strong outside of MFS flow trends. Asset management gross flows and wealth sales increased 55% to $82,655 million, group insurance sales increased 27% to $680 million, and individual insurance sales increased 16% to $1,002 million. Total asset management net flows and net wealth sales were $2,105 million, compared with $(14,190) million in the prior year. Within asset management, a large public fixed income mandate at ABSLAMC drove Solutions & Other net inflows of US$19.7 billion, while SLC Management generated US$4.6 billion of net inflows. MFS recorded US$22.9 billion of net outflows, with retail and institutional outflows both contributing.
Assets under management increased $155 billion or 10% to $1,696 billion. Total Sun Life Asset Management AUM was US$917.7 billion, compared with US$856.0 billion, and managed assets were US$1,034.9 billion. MFS pre-tax net operating profit margin improved to 35.7% from 35.1%, while SLC Management fee-related earnings margin improved to 26.3% from 25.5%. Asia new business CSM was $277 million, down from $299 million, which the company attributed to an increasingly competitive environment primarily in Hong Kong.
Capital metrics remained substantial but changed from the prior year. SLF Inc.'s LICAT ratio was 145%, compared with 151%, and the financial leverage ratio was 23.8%, compared with 20.4%. Cash and other liquid assets at SLF Inc. and wholly owned holding companies were $2,292 million as at June 30, 2026, compared with $2,396 million as at December 31, 2025. The release provided no quantitative forward guidance and reported no dividends, share repurchases, operating cash flow, free cash flow, debt balance, revenue, gross margin, operating income, or operating expense metrics.
Management, verbatim
Sun Life delivered a strong second quarter, reflecting the resilience of our diversified business and the discipline of our execution.
Kevin Strain, President and CEO of Sun Life
We saw strong momentum across our health and individual protection businesses, with group insurance sales up 27% and individual insurance sales up 16%.
Kevin Strain, President and CEO of Sun Life
With our strong capital position and continued investment in innovation, we are well positioned to deliver sustainable value for Clients and shareholders.
Kevin Strain, President and CEO of Sun Life
Not in the filing
stated, not guessed- Revenue, including total revenue and segment revenue
- Gross margin
- Operating income
- Operating expenses
- GAAP or IFRS gross margin and operating margin
- Operating cash flow
- Free cash flow
- Debt balance
- Dividend amount or declaration
- Share repurchases
- Forward quantitative guidance
- Prior-quarter comparisons for reported metrics
- Prior outlook for comparison
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.