Dean Connor is giving me the hard sell.
As we tuck into our meals at a restaurant in the heart of Toronto’s financial district, the chief executive officer of Sun Life Financial is trying to talk me into seeing a financial adviser. Preferably, of course, one at Sun Life.
“Like every profession – doctors, lawyers, accountants – they come in different shapes and sizes and fit,” he says. “I’d be happy to identify someone.”
He starts telling me about the adviser that he’s been using for about three years now. “Among other things, he’s a source for my wife Maris, who wants to find out what’s where,” he says. “Rightly so, she doesn’t believe everything I say.”
It’s an off-the-cuff joke, and it’s somewhat ironic. Mr. Connor recently unveiled a plan to boost Sun Life’s operating earnings by 10 per cent in each of the next few years, to $2-billion in 2015. But it’s a target that analysts deem to be ambitious. For now, they’re waiting to see if they can trust him, or, as Bank of Montreal analyst Tom MacKinnon puts it, Sun Life has become a “show me” story.
Mr. Connor’s plan hinges, in part, on bolstering the contribution from the company’s Canadian business to $900-million, from $660-million, largely by shifting its emphasis from insurance toward retirement products.
It’s part of a broader trend, as pending regulatory changes, interest rates, and aging populations make the life insurance business less attractive in North America. Insurers across North America are increasingly focusing on wealth management. For his part, it’s a change that Mr. Connor is comfortable leading, having spent more time in the pension and retirement space than insurance. His first real job out of university was Mercer’s pension business. He spent 28 years at that company, right up until former Sun Life CEO Don Stewart called him in 2006 in an effort to recruit him.
When Mr. Connor was growing up in Hamilton, his dad was in charge of compensation and benefits at the steel maker Stelco. At Mercer, “part of my role in the early days was to go talk to plan members, on shop floors and other places, and try to explain their pensions to them,” he says, digging into a large spinach salad at the Red Bistro & Wine Bar, about a five-minute walk from his office.
“And I could see the looks, just eyes glazing over. And that whole idea of trying to help people understand these things kind of got into my blood and my veins.”
In 2004, after former New York state attorney-general Eliot Spitzer slapped Marsh & McLennan, Mercer’s parent company, with allegations of bid-rigging and price fixing, Mr. Connor was sent to New York to run Mercer’s business in the United States. He only lived there for a year-and-a-half, but he’s never been the same since.
“I loved working in the United States,” he says . “There’s a sense of urgency and risk-taking in that market that Canadian business people need to see and experience. I’ll tell you, my clock-speed sped up, and I think that happens to everybody who goes and works in the United States, your clock speed increases.”
He certainly didn’t dawdle when he stepped into the CEO’s office last December. Within weeks he announced that Sun Life would no longer sell individual life insurance and variable-rate annuities south of the border, a move that saves the company $300-million a year in capital that it would otherwise have to set aside to protect against potential losses.
It was a dramatic move for a company that, just prior to the financial crisis, had made beefing up in the U.S. a key priority. “In a single decision, the new CEO has definitely transformed an overly ambitious growth strategy in the United States to one that plays to the company’s competencies in that geography,” an analyst at National Bank wrote in a note to clients.
Sun Life still has big hopes for its asset management and group benefits businesses in the U.S., Mr. Connor says. And he’s optimistic about the future of businesses in that country.
“If you look at the strength of the balance sheets, the human capital, the way they’re wired to succeed and grow and the sense of urgency, those are all very powerful attributes,” he says. “But they’re trying to do all of that in the context of a government that has a very difficult time resolving some of the big issues facing the country.”
Mr. Connor is a familiar face to politicians on this side of the border. He was one of the major proponents of the controversial Pooled Registered Pension Plan concept that federal Finance Minister Jim Flaherty is now pushing the provinces to adopt. Ontario Finance Minister Dwight Duncan would prefer to see the Canada Pension Plan expanded, and has said Ottawa is being “weak-kneed” for backing PRPPs.
PRPPs are supposed to make it easier for self-employed individuals and employees of small firms to save for retirement by allowing them to tap in to a large pension plan. The plans would be administered by insurers and other financial institutions, which would earn profits for that work.
If the private sector weren’t doing it, governments likely would. “Part of the origin of the PRPP idea was in response to Alberta and B.C. which had announced the creation of provincially run defined-contribution plans,” Mr. Connor says. “That’s where we first came up with the PRPP idea, because we thought why have governments competing with the private sector in an area the private sector has already invested a lot in – in technology, websites, call centres, solutions.”
Mr. Connor, who does not shy away from controversy, adds that those who want to see the CPP expanded should be careful what they wish for.
For one thing, “any expansion of the CPP would take decades to show up in people’s pensions,” he says. “It would be funded by higher payroll taxes from employees and employers, and our view is that at this stage in the economy more payroll taxes is not the right answer.”
He adds one more argument. “There’s an interesting public policy question about how big you want the Canada Pension Plan investment fund to get as a percentage of the investible assets of the country,” he says. “It’s a well-run institution, but it’s on track to be a very, very, very large investor. And I think there’s a certain aspect of eggs in one basket that you have to think about.”
Grew up in Hamilton.
Graduated from the Richard Ivey School of Business in 1978 with an Honours in Business Administration.
Studied actuarial science and qualified as an actuary in 1983.
Spent 28 years at Mercer Human Resources Consulting.
Joined Sun Life in 2006 as executive vice-president responsible for the United Kingdom and reinsurance operations, strategic international activities and corporate functions.
In 2008 was appointed president of Sun Life’s Canadian operations.
In 2010 he became chief operating officer.
Married to wife Maris who he met through university friends.
Lives in Toronto, and is a trustee for the University Health Network in the city.
Favourite recent book: White Tiger by Aravind Adiga
Skiing, guitar, golf, cycling.
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“People talk about the financial crisis as if it started two years ago, and it’s the fifth year. And they talk about it as if it’s already happened but we’re really in the middle of it.”
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