Sun Life Financial CEO Donald Stewart is retiring in November.Adrian Wyld/The Canadian Press
As a 21-year-old graduating from the Richard Ivey School of Business in 1978, Dean Connor wasn't sure what he wanted to do.
He went into consulting and discovered the world of actuaries - the whizzes who use complex math to try to figure out what might happen in the future, and how much insurers should be charging and saving now to prepare for that. Actuarial science appealed to Mr. Connor for one reason - its difficulty. "People said, 'This is really hard, you'll find this really hard,' " he recalls. "So that immediately piqued my interest."
Thirty-three years later, Mr. Connor is poised to take the helm of Sun Life Financial Inc. , Canada's third-largest life insurer, in the midst of one of the most uncertain periods in the industry's history.
Current Sun Life chief executive officer Donald Stewart announced Monday that he will step down at the end of November, after his 65th birthday.
Mr. Connor, a Hamilton native whose father had been in charge of compensation and benefits at Stelco, can rattle off the challenges that he and other leaders in the insurance industry are facing: Low interest rates, fragile European markets, the sluggish U.S. recovery, volatile equity markets and ongoing regulatory changes are all taking their toll.
In a note to clients Monday, RBC Dominion Securities analyst André-Philippe Hardy wrote that he expects Canada's life insurers to report weaker-than-normal financial results for the second quarter, which ran until the end of June, "especially Manulife and Sun Life, as equity markets and interest rates declined during the quarter."
The S&P/TSX composite index fell 5.8 per cent and the S&P 500 index slipped 0.4 per cent, which will mean lower fee income and higher reserves at Manulife and Sun Life, Mr. Hardy noted. Meanwhile, government interest rates had their first quarterly decline since the third quarter of 2010.
Longer term, the insurance industry is still battling global accounting standard setters over proposed new rules, and working with Canadian regulators on a new set of capital requirements for the segregated funds business. Global watchdogs concentrated on the banking industry in the wake of the financial crisis, and are still hammering out many of the measures that will affect insurers.
But Mr. Connor also sees positive developments on the horizon. "You look at the retirement of the baby boom population, you look at the downloading of responsibility from government and employers to individuals, and lastly the astonishing growth of the middle class in China and India," he said in an interview. "All three of those big mega-trends present opportunities for Sun Life."
For now, Mr. Connor, the present chief operating officer who has been a key part of Sun Life's executive team since joining the company in 2006 after 28 years at Mercer Human Resources Consulting, is remaining mum about any strategic shifts that he might be contemplating. But he does intend to pick up some of the major issues that Mr. Stewart has been active on. "There are a few areas that are still unfinished business; the accounting changes are one of them," Mr. Connor said.
Mr. Stewart, a native of Scotland, has been leading Sun Life since 1998. He took a job with the company in London, England, in 1969 and spent most of the remainder of his career with the insurer, with the exception of a six-year stint as a consultant in Toronto.
Sun Life also announced Monday that chairman Ronald Osborne will be stepping down from his role at the end of November, and will retire as a director at the company's 2012 annual meeting. He will be replaced as chairman by James Sutcliffe, who is currently leading the insurer's risk review committee.