Sun Life Asia CEO Claude Accum, Sun Life global CEO Dean Connor
Global financial services giant Sun Life of Canada sees the Philippines cementing its position as a strong bailiwick in Asia, likely sustaining a growth of around 30 percent annually and contributing as much as a tenth of its global profits in the coming years.
While expanding its existing life insurance and asset management businesses in the country, Sun Life also plans to launch an alternative investment management unit—similar to trust business—catering to institutional investors seeking to improve asset yields.
Sun Life Asia, established in 1892, accounts for about 17 percent of Sun Life’s global business, increasing its contribution from only 7 percent in 2012, Sun Life global chief executive Dean Connor said in a roundtable with local media yesterday.
The group’s Asian business—referring to collective operations from seven markets, namely India, Philippines, Hong Kong, Malaysia, Indonesia, Vietnam and China—has tripled earnings in the last five years and was projected to double in the next five years.
“We expect Sun Life Asia to grow at 15-20 percent per year and something that grows like that doubles after five years and if we grow at 20 percent, we double even faster,” Connor said, noting that Asia should eventually account for about a fourth of global business.
With 3.5 million clients, the Philippines is Sun Life’s second largest market outside North America, next only to populous India where it serves eight million clients.
“We see the Philippines as an important part of our growth story in Asia. The Philippines is contributing 7 percent of Sun Life’s total [global net] income. We expect that to get bigger—it’s likely going to be in five or more years at 9 or 10 percent of total company contribution,” Sun Life Financial Asia executive vice president and chief risk officer Claude Accum said.
As the Philippine market, home to over 100 million people, is still very much “underpenetrated,” Accum said there was a significant opportunity to grow the local business using three various channels: The local agency force which now has 11,000 people, digital platforms and cross-selling through bank branches or the bancassurance business under Sun Life Grepa.
In the last seven years, Sun Life has been the Philippines’ top insurer based on premium income. In 2017, it posted P32.1 billion in premium income.
Accum estimated the Philippine market could sustainably grow the business by 30 percent annually.
Connor noted Sun Life had created a new investment management business, saying improving yields remained a big challenge for investors. This unit invests in less liquid but higher-yielding assets like real estate, infrastructure debt paper, private fixed income and commercial mortgage categories.
This investment management business will be rolled out in the Philippines targeting institutional investors seeking better yields in the coming years.