Sun Life Financial Inc. (SLF) Earnings Call Transcript & Summary

Good morning, and welcome to the Sun Life Financial Q2 2026 Conference Call. My name is Kai, and I will be your conference operator today. [Operator Instructions] The host of your call today is Natalie Brady, Senior Vice President, Capital Management and Investor Relations.

Thank you, and good morning, everyone. Welcome to Sun Life's Earnings Call for the second quarter of 2026. Or earnings release and the slides for today's call are available on the Investor Relations section of our website at sunlife.com. We'll begin today's call with opening remarks from Kevin Strain, President and Chief Executive Officer. Following Kevin Tim Deacon, Executive Vice President and Chief Financial Officer, will present the financial results for the quarter. After the prepared remarks, we will move to the question-and-answer portion of the call. Other members of management are also available to your questions this morning. Turning to Slide 2. I draw your attention to the cautionary language regarding the use of forward-looking statements and non-IFRS financial measures, which form of today's remarks. As noted on the slide forward-looking statements may be rendered inaccurate by subsequent events. And with that, I'll now turn things over to Kevin.

Thanks, Natalie, and good morning, everyone. Turning to Slide 5. We delivered strong second quarter results with double-digit underlying EPS growth reflecting higher earnings across our businesses and continued progress against our strategic priorities, strength in Canada, Asia and U.S., all contributed growth, while Asset Management continues to build moment Underlying net income was up from $1.02 billion last year. Underlying EPS was $2.02, up 13% over the prior year, and underlying return on equity was 19.1%. Reported net income was $1.01 billion compared with [ $716 ] million a year ago. Strong Protection earnings were driven by growth all insurance business in Canada delivered record results, reflecting strong business growth and favorable experience. In Asia, earnings increased from continued business growth. In the U.S., Health and Risk Solutions continue to perform well while management delivered strong earnings driven by favorable investments and insurance results. In Sun Life Asset Management, SLC Management earnings increased year-over-year supported by improved fundraising and deployment momentum while MFS delivered consistent earnings. We also delivered strong top line performance across the organization. Insurance sales increased 20% driven by growth in Asia and continued strength in the U.S. Asset Management net flows and net well sales improved by $16.3 billion, supported by strong private credit fundraising and a large mandate win in our DidaBirla Sunlight Asset Management business, the scale and brand recognition from this mandate amplifies our growth strategy for asset management in India. At MFS, out pools remain elevated, reflecting continued industry-wide pressure on active U.S. equity managers. Our capital position remains strong. We ended the quarter with ratio of 145% and holding company cash of $2.3 billion, reflecting the strength and resilience of our business. During the quarter, we renewed our normal course issuer bid to repurchase up to 10 million common shares and began purchasing shares under the program of our strong capital position and cash generation continue to provide flexibility to invest in our business while returning capital shareholders. Overall, this was a strong quarter that reflected the strength of our premise, our disciplined execution, our business growth across key markets and the resilience of our diversified model. Turning to Slide 6, let me touch on the 2 areas where we're seeing normal momentum for our digital transformation or -- we made significant progress this quarter. At an enterprise level, we recently announced our founding membership in an consortium along for Scotia Bank, TELUS and like AI consortium is a collaborative effort to build the infrastructure, governance and control needs to employ AI responsibly as scale in regulated industries. It is helping accelerate AI adoption in a way that is consistent with the government's standard clients and regulators expected while sharing costs with other major regulated Canadian institutions. In addition, to help technology architecture teams make informed decisions faster, we launch a new agentic AI platform. It has already freed up time by replacing the manual process of trade-off analysis was structured, data-driven and scalable decision making, beyond these enterprise initiatives, we're deploying AI solutions that deliver tangible benefits for clients and advisers. In Indonesia, we launched AI in our contact centers to enhance the client experience services through reducing advanced routing, analytics and monitoring capabilities to improve responsiveness and first call resolution. More broadly across Asia, we also launched tools in our agency channel that accelerate adviser onboarding in support of higher quality service through real-time coaching. Strengthening client interaction and enhancing the on-boarding experience. In Canada, we enhanced my Sun Life at with integrated health capabilities creating a more connected digital experience and bringing health benefits, services and support together in one place. We also launched AI-powered content for engine with the advisers faster access to information and the ability to address complex inquiries, helping advisers spend more time focused on advice and client relationships. Our responsible approach to AI is helping us improve client experiences, operating more efficiently and scale our businesses while keeping clients at the center. Turning to Asset and Wealth Management. We've now completed our first full quarter of Sun Life Asset Management operating a unified platform, we retain strong talent and we continue to deliver strong results to our clients and remain focused realizing the full potential of our combined capabilities, our strength in alternatives and our local expertise in new markets continue to be a driver of growth for Sun Life Asset Management. President proposed the largest direct lending in its history with $10.8 billion investment capital reflecting the strength of this platform and investor relation. President Pantheon also closed a USD 3.2 billion private credit continuation vehicle in the first half of the year, marking the larger transactions in the private credit secondaries market. In India Sun Life Asset Management on a large fixed income mandate for cosponsor doubling their assets under management to USD 113 billion. At MFS, when we continue prior active ETFs continue to gain traction generating inflows more than triple the prior year with AUM having now doubled since the start of 2026 to USD 3 million. In our Canadian business, wealth sales increased 6%, supported by record defined contribution sales strong overall activity and higher mutual fund sales. These examples show the scale and momentum we're building in asset management and the breadth of solutions that we're able to provide to a range of clients. Looking to Asia momentum accelerated across the region, sales increased 20% to $875 million, reflecting broad-based growth across the region. Hong Kong continued to perform well with sales increasing 20% driven by growth across all distribution channels and a 28% increase in advisers to Indonesia to nearly 4,000. Indonesia was another standard this quarter. Sales increased 69%, demonstrating the ongoing success of our expanded CIMB partnership. We also saw strong growth in India and Malaysia, reflecting attractive marketing vision and solid execution by our local teams. What stands out to me is the breadth of growth is coming from multiple markets in multichannel. That's important because great to a more resilient and higher-quality growth profile over time. As a result, total [indiscernible], up over 90% since the adoption of IFRS 17 and providing a strong foundation for future earnings growth. In the U.S., we delivered strong sales results and continued to expand services offered to our members. Medical stop-loss increased 86% over last year, reflecting disciplined pricing, strong underwriting and continued success in winning attractive business. We continue to benefit from our scale and capabilities in this market while maintaining our focus on risk-adjusted returns. This quarter, we expanded our suite of health solutions to provide differentiated support for employers and members through a new partnership we're providing access to clinical trials for people facing complex health conditions, enhancing the solutions available to support access to care, improve health outcomes and help people through series remains the more part of our strategy. In dental, we continue to focus on improving profitability through ongoing portfolio management activities across our government business, growth in our commercial business, disciplined expense management and continued execution while there's still work to do, we continue to make progress. Turning to Slide 7, we're continuing to perform well against our medium-term objectives. Underlying EPS growth was 13%, above our target of 10%. Underlying ROE was 19.1% in approaching our target of 20%, and our dividend ratio was 48% within our target range of 40% to 50%. Supported by these strong fundamentals are diversified business strategy, strength in both asset management and insurance and our industry-leading LICAT ratio, we remain well positioned to continue delivering sustainable broad-based earnings growth over the medium term. I'll now turn it over to Tim to go through the financials for the quarter.

Thanks, Kevin, and good morning, everyone. Turning to Slide 9. We delivered strong second quarter results with underlying net income of $1.12 billion and underlying earnings per share of $2.02. Results were driven by strong contributions from Canada, Asia and the U.S. and continued momentum in Asset Management. Reported net income was $1.01 million. The difference between underlying and reported net income was primarily driven by acquisition and integration-related costs in SLC in the U.S., intangible asset amortization and modestly unfavorable net market impacts. Market impacts reflected yield curve movements during the quarter, real estate returns that were positive but below long-term expectations and strong public equity market performance in the quarter. Turning to Slide 10. Sun Life Asset management underlying net income of [USD 252 ] million increased 4% year-over-year, mainly driven by earnings growth at SLC, favorable seed investment performance and disciplined expense management improved fee-related earnings margins in the quarter. At MFS, higher average net assets supported earnings growth and profit margins improved by 0.6% despite continued rate price. Reported net income increased 14% from market experience at SLC and also reflects the offsetting impact of accelerated amortization of certain compensation expenses for retirement eligible employees in and a gain on the sale back of posting funds. The compensation item reflects the timing and recognition of expenses rather than the change in total compensation cost. Capital raising of USD 4.7 in deployment activity of USD 6.2 billion remains strong across the platform, up 8% and 42%, respectively, particularly with enter private credit and fixed income strategies. MFS continued to experience net outflows for Q2 from increased industry-wide sure on active equity managers from the increasing popularity of lower tracking error strategies. In parallel, the business continues to see momentum in ETF businesses with $0.6 billion of retail inflows and 2 new ETF launches this quarter alongside continued growth in fixed income and retail SMA products. Turning to Slide 11. Canada, underlying net income of $427 million, a new record increased 23% from the prior year. Favorable insurance experience was a significant contributor to earnings in the quarter, reflecting post and sustainable benefits from the investments we've made over time in our people, processes and capabilities. Canada's Wealth businesses increased underlying earnings by over 19%, driven by growth in AUM. Reported net income of $443 million reflects favorable market-related impacts. Canada's Wealth platform reached $286 billion in assets under management and administration, up 18% from last year as a result of record sales in the defined contribution business, increased in the rollover business and strong equity market performance. Insurance sales were broadly consistent with the prior year in both Sun Life health and individual insurance, reflecting the timing of large deals and sales. Turning to Slide 12. We're demonstrating solid progress and growth in our U.S. business. Underlying net income increased 15%, driven by business growth in medical stop-loss earnings and favorable investment results in insurance experience in the in-force management. Reported net income increased 69% from the prior year driven by a prior year intangible impairment charge in [indiscernible] and the increase in net income. In stop loss, sales increased 86% year-over-year, reflecting strong close ratios and pricing discipline, supported by our risk selection approach. Growth continues to be supported by our differentiated health and solutions, advanced analytics capabilities and continued focus on risk selection. In dental, we continued to reposition the business by improving pricing, exiting unprofitable contracts optimizing our expense base and growing our commercial dental business. These actions contributed to improved loss ratios this quarter. Medicaid membership declined 9%, reflecting our deliberate actions to terminate unprofitable contracts as well as ongoing industry-wide dynamics. Commercial dental sales increased 10% in the quarter, reflecting progress in building a stronger business mix, as we continue to kind of execute against these priorities, we expect gradual improvement in earnings over time. Turning to Slide 13. Asia had another outstanding quarter with underlying net income increasing 21% over the prior year driven by robust organic CSM growth, lower expenses and improved credit experience. Reported net income increased 158% from the prior year, driven by market-related impacts and the increase in underlying net income. Asia individual's Insurance sales of $875 million, were up 20%, primarily from strong growth across Hong Kong and our bancassurance channels in India, Malaysia and in Indonesia. Hong Kong delivered insurance sales growth of 20% year-over-year across panels supported by expansion of the adviser force by 28% to nearly 4,000 advisers. Indonesia, to 69% sales growth, reflecting the continued momentum from our bank insurance partnership with CIMB Niaga. Our business SM declined year-over-year, primarily reflecting the competitive environment in Hong Kong, although margins were lower than a year ago, they remain strong. Turning to our capital position on Slide 14. We ended the quarter with a LICAT ratio of 145%, which increased 2 percentage points over the prior quarter, mainly driven by $750 million sub debt issuance at the lowest spread 7-year issuance in the Canadian financial sector in the last 25 years. This is a testament to the quality of Sun Life in debt markets. We delivered book value per share growth of 3% to and finished the quarter with a financial leverage ratio of 23.8%. Organic capital generation was 41%, which exceeded their 30% to 40% range of guidance. Total CSM of [ $15.3 billion ] increase 12% over Q2 last year, driven by strong insurance sales. Together, these metrics reinforce our financial strength and provide resilience in more volatile areas. Turning to Slide 15. In the quarter, we returned $0.5 billion to shareholders through common shareholder dividends, delivering a dividend yield of 3.8%. We also renewed our normal course issuer bid to repurchase up to 10 million shares in June, and we purchased 0.8 million shares to date under the program. In closing, we are very pleased with our second quarter results, which demonstrate the earnings power of our business. Our strong balance sheet and capital position provides flexibility to invest in growth, to support our clients and return capital to shareholders. Looking ahead, we remain focused on executing our client impact strategy and delivering sustainable long-term value for shareholders. With that, I'll turn it back to Kevin for some closing remarks.

Thanks, Tim. As I mark 5 years as CEO, I see this quarter is another proof point of our work to build a more diversified go and growth-oriented Sun Life. The company delivered strong earnings growth in line with medium-term objectives. Our diversified global business, strong capital position and disciplined execution continued to enable progress in areas that matter most for long-term value creation. Across our organization, we remain anchored by our purpose of helping clients achieve lifetime pension security and live healthier lives. Broad-based growth across Canada, Asia and U.S. Health and Risk Solutions, combined with accelerating asset management momentum is showing up clearly in earnings growth. We remain confident in our ability to continue creating sustainable value for clients and shareholders. With that, I'll turn it over to Natalie for the Q&A portion.

[Operator Instructions] I will now ask the operator to hold the participants.

[Operator Instructions] The first question question comes from Gabriel Dechain National Bank .

My question is on the U.S. business, both the proof and the dental stop-loss, if we get in the page on the slide, this is an unfavorable experience due to seasonal reserve build kind of the phrasing of that seems like odd. And if it's seasonal, wouldn't you have kind of anticipated that? Or is there actually a variance here versus what you normally do because everybody is focused on the stop-loss stuff.

New results do include on seasonality in the buildup, that is reserves. That is a what is in that on [indiscernible] you can consider a expected. And the expense is still in line with our expectations despite this and so more busy in Warner was impacted -- it was mostly because of the mill while target loss ratios, the more an experience overall is a little bit higher in that unexpected line than a year ago, just reflecting the larger book due to the stronger growth year-over-year over the past several quarters. The loss ratios remained stable within our target range and very strong results overall the stop-loss business continues to perform very well and in line with our expectations.

I guess you said it I don't quite get that, unfavorable but expected. If it is expected. Why is it unfavorable lower short-term insurance profit number in the quarter or something like that?

I mean, our reserves do build over the course of the year just because payout at the same time the premiums come in. So it's just a matter of time...

I get that it's you would have and we can move on. The dental business, I understand the strategy there. You clearly articulated that. I just want to get a sense for more business is there to shed? And what's the time line for that -- the intermediated or brokered business?

Yes. So as was noted in the internal results for pressure in the quarter were done by lower membership, which was down 9% year-over-year. We are making progress in dental and our pricing discipline on new business and decisions to exit on profitable existing business are driving improvements in the loss ratio. But as you noted, there are those ongoing volume headwinds in our Medicaid dental business, and that's consistent with the broader market, which will suppress that earning this year. We remain focused on shifting towards more profitable mix as we then local business and our commercial dental. And then our broader plans of course includes optimizing your spend space and continue to some discipline in expense management. So we expect these actions to start to shift our business mix over to more stable, higher-quality earnings space over the next 1 to 2 years?

Yes, yes, no, I understand the strategy and you're articulating in just next quarter, the Medicaid premiums dropped $150 million or -- I'm just making up a number, but people have to kind of get a sense of the glide path here. So we can avoid negative surprises. I don't know if you can give a sense that in that direction or the timing of it? in 1 or 2 years, sure, but I wonder to you or how much of this business is going to be shifted away?

Yes, it's a good question. I mean the activities that we are taking on likely offset the Medicaid volume-related pressures we're seeing over the near term. And as a reminder, Q3 is seasonally the highest quarter for utilization in the year prior to the start of the year and then Q4 is relatively lower quarter in utilization quarter. So we do expect the membership to remain lower this year. And then we're looking ahead to the broader market dynamic center in '27.

It's Kevin. Maybe just add a quick thing on this. I watched David and his team and they're fixing the fundamentals of the state business, but it is going to be fundamentally a smaller part of what we do on the dental side and building out the commercial, which is going to take a number of years to build the commercial, but ther is more and more focus on that in on the commercial side of the dental business. And I'd also say on the overall U.S. results were really strong in the quarter, and it reflects what David and the team are doing to build that out. And exactly what we said what happened on stop-loss. We were we were seeing the pricing hardening, and we were winning more of that, and it's coming in at on the ratios. So I'm actually quite pleased with how the stop-loss and the benefits business is doing, and I'm pleased with the progress on the dental side. The state business is going to be a struggle for a number of years, and the focus is shifting over to the commercial side. And that's very clear and is very deliberate and I see them making progress there, and that's where measuring the progress. I wouldn't have high expectations of the state business for a number of years because it's a number of years building it out.

Our next question is from Mike Ward with UBS.

I'm just wondering if you could discuss the stop-loss sales result, just thought that was super strong. And I just -- I've got to imagine you guys are pretty confident on the margins on new and renewal business. So I'm just wondering if you could kind of characterize the competitive environment. And is it easier to win new business given hard market and some people are pulling back? Or are you being more aggressive in growth?

Thanks for the question. So we, first of all, remain diligent and disciplined in a rising underwriting approach, which has led to our scale and leading market position, and we certainly are benefiting from all the work we're doing in underwriting in advancing in our decision-making, our differentiated health capabilities here are also notable because that focus on cost containment is increasingly resonating in the market as employers are more focused than ever in the waste management. We are benefiting from a continued hard market and our approach in rating and underwriting a lot of what those capabilities really position us well over the longer term. But in terms of margins, we remain focused on our margins and we have that discipline approached. If you look at our performance over the last little while, the 125 cohort is now largely complete, it is 97% complete and in line with our expectations, and we continue to get the pricing on our '26 business. It's probably worth noting that sales is '25 were little lower than our typical growth rate due to what we competitive pressures at the time and now as I said, the market has been in the year since '26.

That's helpful. And then I was wondering in Asia, could you discuss the sustainability of the strength there? And maybe thoughts on the kind of focus on the MCV business in Hong Kong by China?

Mike, it's Matt. Maybe I'll start with your second question. So in terms of the Hong Kong business. Let me just start with a bit of context on that business. As you've seen the business has delivered exceptional performance over the last few years. In fact, we've outperformed our peers and we gained market share over that period. And that's been supported by delivering investments we've made in distribution, brand, talent and IT as well as storm execution. Some of the fundamentals of the business are very strong. And we have a very diversified business across all dimensions and distribution, we sell for bank, broker and agency. We provide client solutions to meet protection, savings and retirement needs and our clients include local Hong Kong clients from South-East Asia and MCI. In terms of the MCI client base that makes up roughly about 30% of our overall base in Hong Kong. And obviously, that will change a little bit quarter-to-quarter depending on the mix. And in terms of how we serve that client base. I mean we really are focused on providing specific needs for them and that includes hires return diversification of investments as well as access to products to help them with legacy planning and wealth preservation needs. So I know there's some focus on the tax element in this, but that hasn't really been the key focus of what they're looking for when they come and talk to us. So quite fundamentally, I think the business is in very good shape. And I feel that we have good momentum and that will continue.

The next question is from Doug Young with Desjardins.

Maybe just going to annealing talk a little bit about the experience this quarter, which was favorable in as been in the past. It is noticeably improve the PAA growth. And then I mean general, Canada is generating, I think, year-to-date, about 34% ROE. I guess there's the mission punching above its weight or just trying to get a sense of the sustainability of this because it is a big part of the Sun Life story.

It's Jessica. Thank you maybe let me talk about the insurance experience in this particular quarter, and then I'll talk a bit about most sustainability and [indiscernible] cause. So I think from this quarter, you see experience gains, about 1/3 of that is from mortality and then 2/3 is morbidity. And I think from the mobility standpoint, we benefit from actually sustained and very purposeful investments in people, processes and capabilities such that not only we have actually low claims volumes or the claims duration, but also while maintaining pricing discipline to be competitive as well. So some of the things that we have taken to kind of get the sustained results would be things for example, is not just individual case managers, but it's actually an integrated case management team actually helps position us. We may actually a lot of significant investments in different payments between different cases and then you have different nudges and different experience that the members has been navigated through this sort of difficult journey that they are able to do that seamlessly. So like digital forms the health of petition is, we actually made a lot of investments to reduce that. We have tailored nudges helping actually help position us to nudge so that they will be better in the recovery journey. So these are things that we have been purposefully doing for the past few years, which is why you see this. And then zooming out on sustainability, if you look at the past 8 quarters, we had a positive insurance experience on average about $57 million every quarter pretax. I think that something that is quite sustainable. It is as reflected because we been very disciplined on what we write in the -- risk adjustments are solid. And then I think one variation on the quarter -- we do expect to continue very evermore to have a positive experience in the insurance side. And then I think maybe one more point while if you zoom out beyond the experience you hear from Tim's opening remarks, that actually, if you look at this half of the year overall Canada has actually improved its earnings by 15%. Only 5% of that is actually from the insurance experience and the remaining 10% gained from actually a strong growth on all 3 parts of our businesses. Insurance grew at 6% in CSM and continue strong growth. Health you look at the other insurance line actually grew by 11%. And then most importantly, I think our wellness management business that Tim eluted to is now [ $ 286 billion ] of AUMA in in this half of the year went up by 26%, 18% of which is credited to both favorable market but also positive in those. this quarter we have $1.4 billion of net inflows. And then the other kind of remaining 7% growth due to efficiencies in the economies of sales, which you would expect as you go in wealth asset management that we benefit from the scale that we get. So I think sustainability wise, we're very confident that Canada is punching [indiscernible] medium term objective.

Just one quick one, Tim, the U.S. $350 million price per sell, net 80% of that has been settled in stock in Q3. I've seen that side of big stock price or share price has gone up a lot, just kind of curious that assume that stock price that was set up, just want to clarify.

This is Tim. You correct acquisition we completed that at the beginning of July, and almost 80% of that purchase price was made in shares. And it was based on the 20 days leading up to the closing price on the average share price in that period. That was just shy of $400 million overall for total purchase and it was about $3.6 million shares. But that's an issue in complete in Q2.

And that is in W3.

Yes, it will show up in Q3, it is an subsequent events in our financials, but because it closed in July, yes we'll start to pick up the earnings of that business in the third quarter.

Next question is from David Andrich with Jefferies.

Just want to follow up on Doug's question around the experience gains in Canada. And just based upon the response, it sounds like you're kind of expecting the positive trend to continue to see that come through? And then the second part to that was some of your peers have experienced some headwinds from a long-term disability experience and just there doesn't seem to be anything coming in your results. So I'm just wondering if you could comment on that on your experience specificially.

We do expect that I think the insurance experience line continue to I mean there will be fluctuations quarter-on-quarter due to season and other sectors. As I mentioned, if you look at the past quarters, doesn't matter which period you look average is about $57 million pretax, is $41 million post tax. So I think that will be fluctuations in every quarter, but I think that we expect to be continuing to have that positive number. And then I think in terms of the long term trends. I think there's -- some of the trends in the market has been there for quite some time. For example, I think since COVID, we've already had 40% of the claims due to mental wellness and stuff. So that's something new. And I think this is one that all in the industries have been diligently working on. And I think the long-term kind of results, I think one is about pricing discipline, while remaining competitive and that's the one that we try to do. And then two, as I mentioned, because of the short and the long-term visibility we about multiyear journey. These are purposeful and sustained investments. It's not one single thing, but it's really 1 of the things I described about the people, the processes and the capabilities that we've made investments across. So for example, one of the things that I think to help improve the outcomes for our members is this year, last year, we had a pilot for all of Ontario on disability management of 20% of our business, there were some of the technical platform and processes and that I just mentioned. And this year, we start roll out to the whole country. So I think we'll continue to be diligent and helping our members get to better outcomes.p

The next question is from Nick Lu with Evercore.

My first one was a quick follow up on Asia. I read the earlier comment as in the MCV business represents about 30% of total sales on Hong Kong. And I will have the local bancassurance partners been reacting to the ones on taxes or the broader cross-border capital flow?

Nike yes, you're correct. It's starting figure 30% of the long-term sales. I think in terms bank insurance partners, we have a very strong bank insurance agreement with Dosing. I think, obviously, some of the new requirements put in place if there's sort of even more diligence that all banks are putting on in terms of account openings and we're seeing that across the industry.

And my followup was on stop-loss business in the U.S. Are we at a stage where you think you have an early view to what kind of rate increases going in to -- that you think will be going to [indiscernible] million on your large U.S. peers also noted some favorable experience on '26 but relative to '24 and '25 and was wondering if you are in something directionally responsible.

It's David. Thanks for the question. Yes. So obviously, we're landing very carefully the emergence of experience on cohort, we are still early in that process. It's about 15% complete. Our underlying technical analysis and underlying margin and actual experience are starting giving us confidence in terms of operating approach and how we are approaching that, but we'll continue to monetize the dynamic change in the course of the year and we remain very focused and very confident based on our proprietary and risk evaluation, that we'll continue to focus on that as we -- as the year progresses.