Sun Life Financial shifts focus to organic growth for 2013

PUBLISHED : Monday, 28 January, 2013, 12:00am
UPDATED : Monday, 28 January, 2013, 4:37am

Canadian insurer Sun Life Financial, which has made several high-profile acquisitions in recent years, plans to focus on organic growth this year.

Roger Steel, chief executive of Sun Life Hong Kong, said the insurer's Hong Kong sales force would be raised to 1,400 by the end of this year, up from 1,200. In addition, it would continue to sell its products through brokers and banking partners.

Despite the focus on organic growth, Sun Life would not rule out mergers and acquisitions if good opportunities arose, Steel said.

But targets would have to provide a good fit with the group's culture and vision and would have to contribute to its long-term growth.

Last week Sun Life teamed up with the Malaysian state investor Khazanah Nasional Berhad to buy majority stakes in the life insurance company CIMB Aviva Assurance Berhad, and the Islamic insurer CIMB Aviva Takaful Berhad.

The transactions, which are pending regulatory approval, are the latest deals aimed at expanding Sun Life's presence in the Southeast Asian market: last May it invested in Vietnam, through a joint venture with the local company PVI Holdings.

Sun Life expanded its presence in Hong Kong in 2005, when it acquired CMG Asia and its sister firm CommServe Financial from the Commonwealth Bank of Australia, in a transaction worth HK$3.5 billion. The deal saw Sun Life jump to No 7 in the premium revenue rankings in the local market, up from 19th, while its local customer base rose to 350,000 from 100,000.

The deal also saw Sun Life expand into the Mandatory Provident Fund business, as CMG Asia was one of the pension providers in the city.

Steel said the biggest challenge facing the company this year was managing investment incomes.

"The interest rate has remained at an extremely low level for a long period of time, and this affects the investment return of insurance products," he said.

To cope with this challenge, Steel said, Sun Life would adjust its investment strategy and raise the proportion of its portfolio invested in stocks and high-yield bonds to achieve better returns for its customers.