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    Tom MacKinnon • BMO Capital Markets

    Tom MacKinnon's questions to Sun Life Financial Inc (SLF) leadership

    Tom MacKinnon's questions to Sun Life Financial Inc (SLF) leadership • Q2 2025

    Question

    Tom MacKinnon from BMO Capital Markets inquired about the drivers behind the strong 'other fee income' line and its sustainability, as well as the significant drop in 'other expenses' and whether this represents a new run rate.

    Answer

    EVP & CFO Tim Deacon attributed the strong fee income to growth in ASO and wealth businesses in Canada and Asia, noting the level was elevated this quarter. Regarding expenses, he explained the decline was mainly due to timing of initiative spend in the Corporate segment and guided that a quarterly loss of around $100 million for that segment is a more realistic run rate.

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    Tom MacKinnon's questions to Sun Life Financial Inc (SLF) leadership • Q2 2025

    Question

    Tom MacKinnon from BMO Capital Markets inquired about the drivers of the strong 'other fee income' line and the significant sequential drop in 'other expenses,' asking if these levels represent a new run rate.

    Answer

    EVP & CFO Tim Deacon attributed the higher fee income to strong performance in wealth businesses in Asia and Canada, ASO fees, and care delivery services, noting the quarter was elevated. He explained the lower expenses were mainly due to the timing of initiative spend and incentive compensation in the Corporate segment, and guided that the Corporate segment loss should be viewed closer to $100 million per quarter going forward.

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    Tom MacKinnon's questions to Sun Life Financial Inc (SLF) leadership • Q1 2025

    Question

    Tom MacKinnon asked about SLC Management's progress towards its $235 million earnings target for 2025, the impact of catch-up fees, and for clarification on the structure of the upcoming minority interest buy-ups.

    Answer

    Stephen Peacher, President of SLC Management, expressed confidence in the $235 million target, noting Q1 was elevated by catch-up fees and seed income but that core management fees show solid growth. President & CEO Kevin Strain added that large catch-up fees are a positive indicator of successful fundraising. Regarding the buy-ups, Mr. Peacher clarified that the $2.3 billion liability noted in the financials assumes a 100% buy-up, but the final structure, including potential employee ownership, is still under active discussion.

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    Tom MacKinnon's questions to Sun Life Financial Inc (SLF) leadership • Q4 2024

    Question

    Tom MacKinnon inquired about the U.S. stop-loss business, focusing on the Q4 loss ratio, pricing trends, and the completeness of claims data. He also asked about organic versus actual capital generation and plans for share buybacks.

    Answer

    Daniel Fishbein (executive) explained the stop-loss loss ratio was 74% for the full year 2024, driven by higher claims severity. He noted a 14% price increase was achieved for Jan 1, 2025, with another 2% needed. Timothy Deacon (CFO), Kevin Morrissey (executive), and Kevin Strain (CEO) addressed capital, confirming strong actual capital generation despite reported earnings volatility and reiterated the plan to continue share buybacks.

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    Tom MacKinnon's questions to Sun Life Financial Inc (SLF) leadership • Q2 2024

    Question

    Tom MacKinnon questioned the long-term strategic value of the MFS partnership, highlighting its consistent net outflows and how this challenges Sun Life's growth objectives. He also asked if MFS was included in the company-wide expense reduction plan.

    Answer

    Kevin Strain, President & CEO, affirmed that MFS is an important part of Sun Life's overall asset management strategy and is factored into their medium-term objectives. He acknowledged the cyclical headwinds from shifts to passive and alternative investments but expressed confidence in MFS's strategy. Strain also highlighted MFS's significant contribution to Holdco cash flow, which has enabled Sun Life's M&A and capital deployment activities over the past decade.

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    Tom MacKinnon's questions to Manulife Financial Corp (MFC) leadership

    Tom MacKinnon's questions to Manulife Financial Corp (MFC) leadership • Q2 2025

    Question

    Tom MacKinnon from BMO Capital Markets asked for details on the expected trajectory of GWAM margins post-eMPF transition, the rationale for changing the core earnings definition, and specific accretion metrics for the Comvest acquisition.

    Answer

    Paul Lorentz, President and CEO of Global WAM, projected an approximate 150 basis point drop in GWAM margin post-transition, followed by renewed growth. CFO Colin Simpson stated the core earnings definition change aligns with industry practice and the Comvest deal will add about $30 million in annual amortization, which will now be excluded from core earnings. He also quantified the deal's accretion at roughly $0.02 to $0.03 to annual core EPS from 2026 onwards.

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    Tom MacKinnon's questions to Manulife Financial Corp (MFC) leadership • Q1 2025

    Question

    Tom MacKinnon from BMO Capital Markets questioned the company's appetite for further legacy block transactions and asked for the drivers behind the strong insurance experience gains in Asia.

    Answer

    Marc Costantini, Global Head of In-Force Management, stated that with recent LTC and VA transactions, the derisking mission is "mission accomplished," and there is no need for another deal, though they will continue to optimize the balance sheet. CFO Colin Simpson added that the strong capital position allows for buybacks without needing new transactions. Chief Actuary Steven Finch attributed the Asia insurance gains to favorable mortality and morbidity claims across several markets.

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    Tom MacKinnon's questions to Manulife Financial Corp (MFC) leadership • Q4 2024

    Question

    Tom MacKinnon asked about the remittance contribution from the Canadian universal life reinsurance deal, the sustainability of improved insurance experience in Canada and the U.S., and the 'business as usual' component of the new 3% share buyback program.

    Answer

    CFO Colin Simpson clarified the Canadian UL deal did not contribute to remittances. Executive Steven Finch noted that improved U.S. lapse experience is sustainable, while a P&C provision release was a one-off. CEO Roy Gori explained that about two-thirds of the new buyback program is incremental, supported by strong capital generation beyond the capital released from reinsurance deals.

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    Tom MacKinnon's questions to Manulife Financial Corp (MFC) leadership • Q2 2024

    Question

    Tom MacKinnon of BMO Capital Markets pointed to sluggish APE sales in the 'Asia Other' segment and asked if a recent 9% quarter-over-quarter increase in agent count was a strategy to reignite growth. He also asked about the ongoing negative lapse experience in the U.S. business and its potential implications for the upcoming Q3 assumption review.

    Answer

    Philip Witherington, Head of Asia, clarified that the 'Asia Other' APE sales decline was due to moderation in China and that the focus is on agent productivity, not headcount. Chief Actuary Steven Finch acknowledged the U.S. lapse losses, noting rates are slow to normalize post-pandemic, and stated the upcoming Q3 review will have the usual pluses and minuses.

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    Tom MacKinnon's questions to Great-West Lifeco Inc (GWLIF) leadership

    Tom MacKinnon's questions to Great-West Lifeco Inc (GWLIF) leadership • Q1 2025

    Question

    Tom MacKinnon from BMO Capital Markets asked for a breakdown of the insurance experience gains in the Capital and Risk Solutions (CRS) segment and questioned the drivers of weaker margins and negative operating leverage in the Canada Wealth and Retirement businesses.

    Answer

    Group CFO Jon Nielsen detailed that the CRS results included the California wildfire provision, unfavorable mortality, and a positive provision release from a resolved client issue. For Canadian margins, Fabrice Morin, President and COO of Canada, explained that a change in overhead allocation has resulted in the larger Wealth business attracting more corporate expenses, establishing a new normalized margin level. Jon Nielsen suggested a 20% pretax operating margin for Canada Wealth would be a reasonable run rate going forward.

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    Tom MacKinnon's questions to Great-West Lifeco Inc (GWLIF) leadership • Q1 2025

    Question

    Tom MacKinnon asked for a breakdown of the insurance experience gains, particularly in the Capital and Risk Solutions (CRS) segment, and questioned the drivers of the weak margin in the Canada Wealth business, including expense seasonality.

    Answer

    Group CFO Jon Nielsen detailed three factors in CRS: the California wildfire provision, unfavorable mortality experience, and a positive provision release from a resolved client contract. For Canada Wealth, Fabrice Morin, President and COO of Canada, attributed the lower margin to Q1 seasonality (marketing spend, fewer fee days) and a new, higher overhead allocation due to the integration of acquired businesses. He suggested a normalized run-rate margin of around 20% going forward.

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    Tom MacKinnon's questions to Great-West Lifeco Inc (GWLIF) leadership • Q1 2025

    Question

    Tom MacKinnon requested a breakdown of the insurance experience gains, particularly in the Capital and Risk Solutions (CRS) segment, and questioned the drivers of weaker margins and negative operating leverage in the Canada Wealth and Retirement businesses.

    Answer

    Group CFO Jon Nielsen detailed three factors in CRS: the California wildfire provision, unfavorable mortality experience, and a positive provision release from a resolved client contract. Fabrice Morin, President and COO of Canada, addressed the Canada Wealth margin, attributing the quarterly performance to seasonality (higher marketing spend for tax season), fewer fee-collection days in Q1, and a new, higher overhead allocation to the wealth business reflecting its larger scale post-acquisitions.

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    Tom MacKinnon's questions to Great-West Lifeco Inc (GWLIF) leadership • Q4 2024

    Question

    Tom MacKinnon of BMO Capital Markets asked about the company's target for its holding company cash balance, the reason for net outflows at Empower DC related to stock plan services, and the cause for the year-over-year decline in U.K. insurance and annuity sales.

    Answer

    CFO Jon Nielsen and CEO Paul Mahon confirmed the minimum holdco cash target remains around $500 million, with the current $2.2 billion balance reflecting strong capital generation. Empower CEO Ed Murphy explained the stock plan outflows were a timing issue, with exercises in Q4 and grants in Q1. David Harney, President and COO of Europe, stated the U.K. sales volatility was due to the lumpy nature of large bulk annuity transactions, and the business remains strong.

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    Tom MacKinnon's questions to Fairfax Financial Holdings Ltd (FRFHF) leadership

    Tom MacKinnon's questions to Fairfax Financial Holdings Ltd (FRFHF) leadership • Q1 2025

    Question

    Tom MacKinnon asked for an update on the company's priorities for deploying its holding company cash, specifically regarding share buybacks and minority interests.

    Answer

    Peter Clarke, President and COO, outlined the capital allocation priorities. The top priority is maintaining financial strength. Other considerations include addressing upcoming preferred share maturities, opportunistically buying back minority interests in well-known subsidiaries like Odyssey and Allied World, and continuing to repurchase common stock, which they believe is well-valued, without compromising financial strength.

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    Tom MacKinnon's questions to Fairfax Financial Holdings Ltd (FRFHF) leadership • Q1 2025

    Question

    Tom MacKinnon asked for Fairfax's priorities regarding the deployment of its holding company cash, specifically mentioning preferred share buybacks, acquiring remaining minority interests, and common stock repurchases.

    Answer

    Peter Clarke, President and COO, outlined a clear capital allocation hierarchy. The top priority is maintaining financial strength, including holding company cash and a robust credit facility. Next is addressing upcoming preferred share maturities. While not seeking major acquisitions, Fairfax would consider buying back minority stakes in well-known holdings like Odyssey and Allied over time. Lastly, the company will continue share buybacks as long as the stock is well-valued and financial strength is not compromised.

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    Tom MacKinnon's questions to Fairfax Financial Holdings Ltd (FRFHF) leadership • Q2 2024

    Question

    Tom MacKinnon noted Fairfax's strong financial condition and the significant Q2 increase in share buybacks, asking about the company's appetite for future repurchases and its view on the stock's valuation.

    Answer

    Peter Clarke, President and COO, affirmed that after prioritizing financial strength and supporting its insurance companies, Fairfax is using excess capital for buybacks. He stated that management believes the shares are at "great prices" and intends to continue the repurchase program.

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    Tom MacKinnon's questions to Fairfax Financial Holdings Ltd (FRFHF) leadership • Q2 2024

    Question

    Tom MacKinnon from BMO Capital Markets asked about the significant increase in share buybacks during the quarter and what this signals about management's view on the stock's valuation.

    Answer

    President and COO Peter Clarke explained that Fairfax's top capital allocation priority is maintaining financial strength, defined by over $1 billion in cash at the holding company, no near-term debt maturities, and a $2 billion unused credit line. With insurance premium growth leveling off, the well-capitalized insurance subsidiaries are now producing excess capital and strong dividends for the holding company. Clarke confirmed that Fairfax has been using this capital to repurchase shares, stating, 'We think they're at great prices, and we'll continue to do that going forward.'

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    Tom MacKinnon's questions to Fairfax Financial Holdings Ltd (FRFHF) leadership • Q1 2024

    Question

    In a follow-up question, Tom MacKinnon of BMO Capital Markets asked about the higher overall expense ratio in the quarter and for guidance on how to think about this metric going forward.

    Answer

    Peter Clarke, President and COO, attributed the approximate one-point increase in the expense ratio to two main factors: the consolidation of Gulf Insurance, which operates with a higher expense ratio, and a shift in the business mix that impacted commissions. He also noted that ongoing investments in technology and personnel contributed to the uptick.

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    Tom MacKinnon's questions to Fairfax Financial Holdings Ltd (FRFHF) leadership • Q1 2024

    Question

    Tom MacKinnon of BMO Capital Markets inquired about Fairfax's strategy for its total return swaps on its own shares, including their duration and settlement mechanics, and how this approach aligns with the company's ongoing share buyback program.

    Answer

    Peter Clarke, President and COO, explained that Fairfax considers its total return swap (TRS) position a great investment, with contracts expiring in 2025 and 2026 that can be extended. He noted that approximately half of the contracts reset quarterly. Regarding share repurchases, Mr. Clarke affirmed the company's positive view on its stock value but emphasized that buybacks are always balanced against maintaining financial strength and ratings.

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