Sun Life Financial has decided that it is no longer enough to be one of Canada’s “big three” insurance companies. To put distance between itself and its two main rivals is one of the goals that Dean Connor says he is pursuing in his role of president and CEO, a position he took on in December 2011.In an interview at Sun Life headquarters in Toronto on April 16, Mr. Connor told The Insurance and Investment Journal that the company has set its sights on the summit of the domestic market.
“The first (goal) is to move our Sun Life Canada business to what we’ve described as the best performing life insurer in Canada…We don’t see a clear leader today, but we want to make it Sun Life.”
Presently, market leadership is shared between Sun Life, Manulife Financial and Great-West Life. These large companies are roughly the same size and are all very strong, able competitors, underlines Mr. Connor. “However, there isn’t one company that stands out among the three.”
The situation today, he continues, is that the big three insurers hold leadership positions in different areas. For example, with regard to group benefits, Sun Life has moved from number three to number one in terms of the premium in force, but is not number one in terms of net income – Great-West Life has that distinction. “So I wouldn’t declare victory, I wouldn’t say we’re the overall leader in group benefits. In fact, I wouldn’t say there is one overall leader in group benefits. We lead in some parts of group benefits and others lead in other areas.”
In individual insurance, the insurers show their strength in different areas as well with no clear leader emerging, he says.
Determining overall leadership involves taking into account different metrics, such as customer satisfaction; ease of doing business; growth in net income; thought leadership and innovation; contributing to public policy and return on equity, Mr. Connor explains, adding that he wants to see Sun Life leading in all these areas taken together.
“What we’re really saying is that we are setting a pretty ambitious goal…to put more daylight between us and the rest of the industry.”
He adds that it’s unlikely that Sun Life would outshine its rivals in every single category, “but we have to be number one in enough of them that people say, ‘Wow, Sun Life does seem to be ahead of the other guys.
What are Sun Life’s specific strategies for eclipsing GWL and Manulife? Mr. Connor says some of these strategies are already being implemented. Under the ease of doing business category, the introduction of mobile applications for group pensions and group benefits is an example. “To be able to submit claims through a mobile device, it was a first in Canada. That has the beauty of making us easier to do business with for the plan member and it saves money and trees…”
Another example from its health and dental business is Sun Life’s investment in wellness and workplace productivity. The goal here is to help employers improve productivity by focusing on the 95% of their premium that is spent on claims, “as opposed to the 5% that’s spent on insurance company risk and retention charges, which is typically where brokers and companies go. Our view is the 95% is more important. It’s not just about money, it’s about workplace productivity.”
As part of this strategy, last year Sun Life bought Buffett & Company Worksite Wellness. “Buffet does an amazing job helping employers measure the health of work forces and identify interventions for the employees to help them change their behaviours. All of that ripples into drug costs, disability costs, absenteeism costs and productivity for the employer,” says Mr. Connor.
Three major themes
On the individual insurance side, the company has been pursuing three major themes. “One is a really outstanding product shelf. What you’ve seen from Sun Life, and it helped us move to the number two position last year, is introducing new products and refreshing old products. We rolled out par insurance in the summer of 2010…That has been a huge success. We’ve gone from zero to $37 million of sales last year in a very short period of time.”
The second theme is that of holistic advice. Particularly with its career sales force, Sun Life is working with advisors to encourage them to talk to their clients about not just life or health insurance or wealth products, but about all three.
The third theme is making the company easier to do business with by, for example, introducing more electronic applications, which are practical for both customers and advisors, he adds.