Just a few years ago, Sun Life Financial’s individual sales through its independent channel of advisors network were dismal – sometimes just one million dollars per quarter. This figure is now up to one million per week and growing, explains Kevin Strain, Sun Life’s, senior vice-president, individual insurance and investments.
After Sun’s acquisition of Clarica back in 2002, sales figures for Sun Life’s wholesale channel, which includes independent distributors such as managing general agents (MGAs), independent producers and investment firms, dropped off dramatically.
In an interview with The Insurance Journal in April 2005, Mark DeTora, Mr. Strain’s predecessor, outlined his plans to win back the wholesale channel. Judging by the major sales growth through this network, the insurer’s strategy has worked.
Prior to taking on his current responsibilities, Mr. Strain held other executive roles within the company, including vice-president, investor relations, vice-president, individual finance and vice-president, pensions and group savings for Clarica (now rebranded Sun Life).
In his new position as the head of individual insurance and investments, to which he was appointed in July 2007,
Mr. Strain says he intends to continue building on the successful turnaround led by Mr. DeTora in the independent channel.
In 2005, only 10% of Sun Life’s sales were made through the individual channel, whereas the career network accounted for 90%. Mr. DeTora’s stated goal in 2005 was to change this ratio to 60% career and 40% wholesale.
Mr. Strain, who was Mr. DeTora’s head of finance when that goal was set, confirms that he is still shooting for the same ratio. He adds that the company has made significant progress towards this goal.
"We’re closing in on that. We’re not there yet, but typically we see between 11 to 12 per cent market share sold by the career force and three to four per cent by the wholesale side."
Explaining that one of his goals is to increase Sun Life’s total individual market share to 20%, he added he is aiming to grow in both channels. "To me, the ultimate goal would be something like 12 to 14 per cent [market share] on the career side and eight per cent on the wholesale side. That would be 60-40."
To illustrate the improvement already achieved, Mr. Strain says he has explained to staff members that, "When Mark DeTora took over there were [previously] a number of quarters where we were one million." This figure is now one million per week through the wholesale channels, he adds. "So that really captures the staff’s attention. We have been really successful in re-entering this market."
Presently, the company has relationships with 20 MGAs and will be selective in adding any others to the channel. "We’re really looking for MGAs where we can bring that broader partnership and we can bring all three products (life, health, wealth)."
Focus on the affluent
A strategy Mr. Strain says he has been pursuing since taking on his new position is to clearly target Sun Life’s products and services for wholesale channel on the 50 years and up affluent demographic. "That’s where we want our advisors to know we’re going to be strong from a product perspective…strong from an underwriting perspective [and] strong from an illustration sales concept perspective."
This is the natural market for Sun Life’s holistic approach to financial services, he adds. "Where you’re going to make the most traction in seg funds products, it’s in the 50 plus, affluent market." The same is true for long-term care or critical illness insurance, he adds.
Increasingly, he adds, Sun Life will be working with CI Investments to bring its SunWise Elite Plus, guaranteed minimum withdrawal benefit product, into the MGA channel.
Career channel goals
Going forward, one of Mr. Strain’s main goals for the career channel is to strengthen recruiting. In this area, Sun Life had been losing ground for the last three years "pretty consistently." Recently, however, the insurer has experienced something of a turnaround by posting positive recruitment numbers of about 20 advisors per month over the past four consecutive months (as of the interview date in January). Presently, the Sun Life career force, which includes advisors, specialists and managers, totals 3450. Mr. Strain’s goal is to grow this sales force by 100 advisors per year.
The insurer’s rebranding of this sales force from Clarica to Sun Life carried out last year is likely behind this improvement, he adds. The Sun Life brand is well known internationally and therefore attracts new immigrant recruits. Also, the advertising campaign about the rebranding further raised awareness in Canada. "Since the ads started in September, we’ve been in a net gain position…in terms of growth of our sales force."
Ease of doing business
Another area of focus for Mr. Strain is making Sun Life an easier company to do business with for its career advisors. The main challenge is to improve underwriting times. "We knew that our first step in making advisors believe that we could be easy to do business with was that underwriting issue."
So far, he says, the company has made progress in reducing its career channel underwriting backlog. With a goal of having a maximum of 5,000 policies in the queue awaiting underwriting, at one point the insurer was well beyond this at 10,000, Mr. Strain explains. But, as of the last week of January the queue number stood at 4,300, despite the fact that this period followed the insurer’s big fall campaign and incorporated the Christmas holidays when backlogs usually worsen. Underwriting backlogs are not an issue in the wholesale channel, he adds.