A major insurer is in acquisition mode. Is your firm next?
Sun Life is making sure it doesn’t get caught in the low interest rate storm; instead the insurance giant is looking for safe harbour with new acquisitions in wealth management.
“We are investing in areas of growth that are less dependent on what interest rates do,” chief executive Dean Connor told Reuters. “We are actively in the market place looking for acquisition opportunities, not just wealth but protection as well, and not just Asia, but the U.S. and Canada as well.”
The current low-rate environment has led to weaker yields from bonds and other such securities, forcing insurers to trim benefits and raise the prices on products. It’s seen many insurers dip their toe into fee-based services such as wealth management to offset the impact of lower yields.
“Low interest rates continue to be a major headwind for the industry around the world. We have done a lot to reposition our company to thrive in such a world, but no one can completely immunize an insurance company from low interest rates,” Connor said.
Toronto-based Sun Life, along with its peers, was buffeted by the global financial crisis, however the company has since bounced back strongly, with its shares rising more than 150 per cent since the depths of the crisis six years ago.
The Toronto-based Sun Life cut part of the business that was weighing it down when it sold its U.S. annuity and life insurance arm in 2012. The company also created the Sun Life Investment Management business, and bought Ryan Labs Inc. earlier this year, expanding its investment management business into the larger U.S. market.
