Sun Life’s Kevin Strain on FDI, Bancassurance and More

The Morning Brief

Kevin Strain, CEO of Sun Life, discusses the company's significant growth trajectory within the Indian and broader Asian markets. He details

Key takeaways

• Sun Life's insurance business in India is currently experiencing a growth rate of 25% per annum.
• The company's asset management business in India has achieved $100 billion US in assets under management.
• Kevin Strain emphasizes that while AI can drive efficiency, it cannot replace human empathy during sensitive life events like bereavement.
• Sun Life maintains a 49% stake in its partnership with the Aditya Birla Group, prioritizing operational success over total ownership.
• The shift in demographics means workers may now need to finance 40 years of retirement following 40 years of employment.

Main topics

• India insurance market growth
• Aditya Birla Group partnership
• Impact of AI on insurance services

Notable quotes

When somebody in your family passes away, you need empathy. You don't want to talk to a robot about what's just happened.

Conclusion

The episode offers valuable insights into how global financial leaders

Transcript preview

Speaker 1 (0:00) Our insurance business today in India is growing at 25 % per annum. And our asset management business is now a public company and it's achieved $100 billion US in assets under management. Speaker 2 (0:13) Government has allowed insurance companies to raise a stake in their domestic partners up to 100%. You already have 49 % in Aditya Birla's son, right? What would be the trigger for you to raise the stake to 100 %? Speaker 1 (0:28) At this point, It actually works better alongside of the beer group than it would be if we were just alone. Speaker 2 (0:34) Which services or capabilities you think AI will devalue? Speaker 1 (0:39) And when somebody in your family passes away, you need empathy. You don't want to talk to a robot about what's just happened. When I started in this industry, people would work 40 years and they would have to pay for 10, 15 years of retirement. Now people are working 40 years and it's got to... pay for 40 years of retirement. Speaker 2 (1:01) Today we have Kevin Strain, CEO Sun Life at the Economic Times World Leaders Forum. Listen on. It's Monday, the 21st of September. I am Sangeeta Mehta. This is Corner Office Conversations. Speaker 2 (1:39) Hello, Kevin. Thank you for joining us. Speaker 1 (1:41) Thanks. Speaker 2 (1:42) So how has the energy been? Speaker 1 (1:44) Oh, it's so fun to be back in India again. It's been a few years. I first came to India in 2007. And when I ran Asia for Sunlight between 2012 and 2017, I came a lot. So I think I've now been, oh, maybe 70 times to India at different times. Oh, really? But this has been three years. So it's been the longest since I've been back. Speaker 1 (2:07) I know I'll be back soon enough. So, Speaker 2 (2:09) yeah. Speaker 1 (2:10) So, Speaker 2 (2:11) Kevin, let's start with Asia first. A lot of insurance companies have started investing in India. And so what really is driving this? Asia seems to have become the center of gravity for insurance companies. How are Western companies looking at it? Yeah, Speaker 1 (2:31) yeah. Well... There's 4 billion people that live in Asia, half the world's population, fastest growing economies, fastest growing middle class, and fastest growing high net worth business, to be quite honest. So I think that we are looking at Asia as being one of the major opportunities we have. We have a 15 % growth objective for our Asia business, but Asia is not new to us. We've been in Asia for 130 years straight. But the growth opportunities are tremendous. In 2012, when I took over Asia for Sun Life, our earnings were $100 million. Today, they're closer to $900 million. Speaker 2 (3:12) And Speaker 1 (3:12) our ROE is growing quickly. It is by far the fastest growing part of the insurance part of our organization. And I just see more and more opportunities. But you're asking how Western companies are viewing it. If you looked at... to me, the real growth story in Asia, you needed to be here at least 10 years ago, if not 15 or 20 years ago, because Asia's well-serviced. It has really strong local companies, and it has five, I would say, major global players, Sunlight being one of them, that are Pan-Asia. If you weren't there 10, 15, 20 years ago, it's hard to do it today. So it's... It's a very, very interesting part of the market because of those demographics, because of the growth in the middle class and the growth of the high net worth. Also the growth in asset management. And we're seeing asset management as being a significant opportunity for us in Asia where we can bring our capabilities. Sun Life is $1.7 trillion Canadian in assets under management, which is probably close to $1.3 trillion US dollars. We are the 25th largest asset management company in the world. Speaker 2 (4:28) A Speaker 1 (4:29) lot of our focus in Asia to date has been life insurance. Some of it's been asset management, but increasingly asset management is going to be part of our focus. So Speaker 2 (4:38) I want to pick your brain on AMC, but I will come to that a bit later. But within Asia now, India, as you said, is one of the key growth markets. government has allowed insurance companies to raise a stake in their domestic partners up to 100%. You already have 49 % in Aditya Birla Sunrise. Speaker 1 (5:01) What Speaker 2 (5:02) are the plans now? Speaker 1 (5:04) Well, for history, I was one of the people that negotiated our increase from 26 % to 49 % with the Aditya Birla Group. So as a partnership, they bring... brand recognition, local presence, local understanding, and we bring some of that global insurance and asset management capability, it just works really well. Our insurance business today in India is growing at 25 % per annum. Speaker 2 (5:31) Nice. Speaker 1 (5:31) And our asset management business is now a public company, and it's achieved $100 billion U.S. in assets under management. So I step back and I look at it and I go, It all works very well. And we have a great relationship with the Birla Group. I