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Sun Life International Earnings

CEO Donald Stewart Canadian International Executive of the Year

Dec 13, 2007

Golden globe map box, mensatic@MORGUEFILE.COM (16538)

As earnings from Canadian operations slow, company management is wise to shift shareholder focus onto future growth prospects in American & Asian markets.

With estimated revenues of some US$27 billion for 2007, Sun Life Financial is one of Canada’s three largest life insurance companies. Sun Life has emerged as one of only 40 Canadian life insurers to survive a dramatic consolidation of 140 competitors since 1994.

Starting in 2006, the company generates more than half of its earnings outside Canada.

Competitive Advantages for Global Growth

Kevin Dougherty, former president of Sun Life Financial Canada, articulated four competitive advantages powering Sun Life Financial’s profit growth outside Canada.

Sun Life’s strong position in its home Canadian market charts a path for international expansion.
Sun Life has been an established player in global markets since 1900, and today conducts business in 16 countries throughout the Americas, Europe and Asia.
The Canadian federal government has allowed Sun Life, ManuLife Financial and Great West Life to dominate competition among Canadian insurers while other countries have much tighter restrictions on domestic financial institutions.
Sun Life benefits from Canada’s worldwide reputation for being collaborative, ethical and socially responsible.

Overall Company Earnings by Business Unit

At a Scotia Capital conference in September, Sun Life presented a breakdown of company earnings. According to Donald Stewart, Sun Life earnings platform is diversified as follows:

Canada … 46% of total company earnings (excluding Corporate Support)
United States … 22%
MFS Mutual Funds … 12%
United Kingdom … 10%
Asia … 5%
Reinsurance … 5%

Given that MFS Mutual Funds are sold principally to American clients while Reinsurance represents mostly North American business, some 85% of Sun Life’s earnings originate in Canada and the United States. Asia represents a very small percentage of overall company earnings.

International Earnings Growth Rate

In the latest quarter ending September 30, 2007, Sun Life earnings from Asia grew at the fastest rate – albeit starting from a much smaller base amount than the other business units.

SLF Asia … $30 million (up 130.8%)
Sun Life United States … $162 million (up 33.9%)
MFS Mutual Funds … $65 million (up 25%)
Sun Life Canada … $257 million (up 7.1% from same quarter in 2006)

Sun Life executive presentations and marketing materials fixate on the fact that the company operates in over 200 cities in India and 14 cities in China, emphasizing that these countries represent over a third of the world’s population.

Sun Life International Management Moves

To echo Kevin Dougherty’s words, "To be successful internationally, you have to first be successful at home." This is certainly true for Mr. Dougherty’s career. On November 1, 2007, Sun Life Financial announced changes to its executive team aimed at further accelerating the company’s international growth. Kevin Dougherty was moved from President of Sun Life Financial Canada to become President of Sun Life Global Investments.

Later that month, the Canadian Chamber of Commerce honored Donald Stewart as Canadian International Executive of the Year at the Royal York Hotel in downtown Toronto.

References

This article presents independent insights from data including the third quarter 2007 press release and presentations under Investor Relations on sunlife.com.

The copyright of the article Sun Life International Earnings in International Trade is owned by Daniel Workman. Permission to republish Sun Life International Earnings in print or online must be granted by the author in writing.