For Sun Life Financial Inc., the COVID-19 pandemic has delivered an unexpected boost to business.
First, the spread of the virus triggered higher demand for life insurance among many young people, typically a tough market to win over for the industry. And physical distancing measures forced the company to move faster in its efforts to streamline and digitize the way people sign up for coverage.
Such trends are helping set the stage for an exit on a high note for chief executive Dean Connor, who will retire on Aug. 6 after leading Sun Life for the past decade.
“The demand for insurance has never been higher,” Mr. Connor said in an interview with The Globe and Mail. The pandemic has prompted younger Canadians to think more about their mortality. “It is human nature that when you see people getting ill, and in some cases dying, it reminds you that anything could happen to you even if you are a healthy 35-year-old,” Mr. Connor said.
At the onset of COVID-19, Sun Life Financial saw its online life insurance sales grow by more than 40 per cent compared with the same period in 2019. The increase in demand for its online product – called Sun Life Go – has largely been driven by clients under the age of 40, with sales climbing by more than 40 per cent among that demographic in two consecutive years.
With a larger cohort of young applicants, Sun Life re-examined insurance coverage limits for certain age groups. The result led Mr. Connor and his team to boost the limits for non-medical coverage – insurance that does not require medical exams – to $5-million from $2-million for Canadians aged 40 and under.
“Necessity is the mother of invention,” Mr. Connor said. “We did imagine a world where we could use a lot of data to do medical underwriting without requiring lab work – but we did not anticipate that the world would be accelerated because of the pandemic.”
The coronavirus pushed Sun Life and competing companies to re-evaluate the way people apply for life insurance and qualify for it. For instance, as medical exams became near impossible during lockdowns, life insurers had to accelerate the use of digital tools to help eliminate the need for cumbersome lab work – such as blood and urine samples.
“There are still too many ways that life insurers are difficult to do business with,” Mr. Connor said. “Medical underwriting can be invasive and time consuming, so we’re working hard to change that and automate the process.”
As COVID-19 vaccination rates rise and businesses formulate their reopening plans, insurers – including Sun Life – will need to keep a close eye on whether demand will slow down as life returns to what now can be called “normal.”
Mr. Connor joined Sun Life in 2006. Two years later, he become president of the company’s Canadian operations. When he was promoted to CEO in December, 2011, Sun Life already had a strong balance sheet compared with some of its industry peers. At the beginning of 2012, Sun Life’s share price was trading at $19.50, with what the company calls underlying earnings – its key measure of operating performance – of $1.7-billion. Now, a decade later, the company’s share price is $63.92, with underlying earnings of $3.2-billion, as of June 30.
From his appointment as CEO, Mr. Connor has made bold growth predictions, saying the insurer would increase annual net income to $2-billion by 2015. The company hit $2.25-billion.
He is frequently quoted about being “client obsessed,” and has spent almost every quarter since 2008 visiting Sun Life’s call centres across Canada to listen in on client calls and see how he can improve customer service. He has continued to dial in virtually throughout the pandemic.
In 2012, Mr. Connor announced the “four pillar” strategy: to hone in on Sun Life’s U.S. group benefits business, grow the global asset management segment, boost its presence in Asia and become a leader in Canada’s insurance and wealth management market.
Asia now accounts for more than 20 per cent of the company’s earnings, up from just 6 per cent in 2011.
And it won’t stop there, said Mr. Connor, as he prepares to pass the reins over to Sun Life president Kevin Strain. He led the company’s operations in Asia for five years, before returning to Canada as chief financial officer in 2017.
“Asia will continue to grow and, looking ahead, it will be a bigger slice of the pie,” Mr. Connor said.
He has not slowed down during his last month at the helm, as he helps prepare the company’s 20,000 employees in Canada to return to the office. Sun Life was the first major Canadian financial services company to announce it would allow employees the flexibility to decide their own work arrangements. Mr. Connor says the next phase will be a “pretty big experiment” for every Canadian company, and will require measuring data carefully and looking at employee productivity.
“We have to wake up five years from now and be highly confident that the growth of our people has not taken a back seat because, for example, they are spending more time working on their own from home.”
For Mr. Connor’s next move, there is still a lot of wood to chop. In addition to spending more time with his wife, Maris Uffelmann, and his three children, he has already agreed to join one company board (although it has not yet been publicly disclosed) as well as help on the advisory board of an entrepreneur he has mentored for over a decade.
“You know retiring is such a weird word because I don’t feel like I’m retiring,” Mr. Connor said. “I feel that I am moving forward to do something different.”
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