ONE ON ONETHE QUEST FORPhotos › Jean MartinDONALD A. STEWARTDonald A. Stewart began his career with Sun Life Financial in London,England in 1969. He moved to Canada and became a b<strong>en</strong>efits consultantbefore rejoining Sun Life in 1980 and leading the company’s chargeinto the age of in<strong>format</strong>ion technology. In 1996, after a year at the helmof the company’s worldwide actuarial operations, he became Presid<strong>en</strong>tand Chief Operating Officer of Sun Life. Two years later, he was appointedChief Executive Officer of Sun Life Financial Inc. BY DAVID PYE10<strong>HEC</strong> Montréal <strong>MAG</strong> › Printemps 2006
“INDIA AND CHINA SHARE SOMEIMPORTANT SIMILARITIES, BUT ALSO SOMEVERY CONSIDERABLE DIFFERENCES.“INTERNATIONAL GROWTHWITH CLOSE TO 135 YEARS IN THE INSURANCE INDUSTRY,Sun Life Financial has be<strong>en</strong> an important part of Canada’seconomic foundation. The company is se<strong>en</strong> as a symbol of economichealth, and as a Canadian institution respected aroundthe world.As we forge ahead into the 21st c<strong>en</strong>tury, globalization hasbecome a fact of life that has dramatically expanded the field ofcompetition. The financial services industry has be<strong>en</strong> at the forefrontof that expansion as large corporations continue to seek outnew and established international markets. The future of Sun LifeFinancial Inc. lies in its ability to grow and compete in that global<strong>en</strong>vironm<strong>en</strong>t, and the company has assigned that monum<strong>en</strong>taltask to Donald A. Stewart.Mr. Stewart rec<strong>en</strong>tly spoke to MBA stud<strong>en</strong>ts at <strong>HEC</strong> Montréalas part of the “Professor for a Day” series. <strong>HEC</strong> Montréal Magcaught up with him later in the day to address some of themost chall<strong>en</strong>ging issues facing Sun Life in its quest for internationalgrowth.<strong>HEC</strong> MONTRÉAL <strong>MAG</strong>: How long has Sun Life be<strong>en</strong> involvedon the international stage?DONALD A. STEWART: Some of our international pres<strong>en</strong>ces goback to the late 19th c<strong>en</strong>tury. Canada was a small market and thecompany had difficulty competing with British and Americancompanies. It was easier to grow internationally, so in 1880we started doing business in Barbados. Further internationalexpansion followed in the 1890s wh<strong>en</strong> we <strong>en</strong>tered China, India,the United Kingdom, the Philippines and ev<strong>en</strong>tually the UnitedStates. Sun Life continued to grow at a rapid pace until thedepression forced the company to retract its business.Can some of the lessons learned from that early expansionstill be applied today?The spirit of internationality is alive and well at Sun Life andhas certainly be<strong>en</strong> handed down from the past. We have the bestlife insurance operations in the Philippines, as well as a historyin India that has giv<strong>en</strong> us a higher profile than we otherwisewould have had.What pot<strong>en</strong>tial does Sun Life Financial Inc. see for China?I’m very high on the possibilities for China, but there is certainlysome social and political risk. The leadership in Beijing has adifficult and chall<strong>en</strong>ging task to manage the country and grow jobssuffici<strong>en</strong>tly for the 15 million people per annum who continue toflood in from the countryside. If there are no jobs, social t<strong>en</strong>sionwill put economic gains at risk. But I have great confid<strong>en</strong>ce thatthe Chinese will make strides in all aspects of business. What isreally at issue is the capability of western companies to makemoney on the capital invested. Our chall<strong>en</strong>ge is to grow in Chinaon a profitable basis.How does India compare to China in terms of futuregrowth pot<strong>en</strong>tial?India and China share some important similarities, but also somevery considerable differ<strong>en</strong>ces. For instance, India’s national regulationof financial services means that you can be in businesseverywhere in the country with only one set of rules. But there arealso more market segm<strong>en</strong>ts in India due to ethnic divisions, whileChina has a higher s<strong>en</strong>se of ethnic unity. China has a strong infrastructure,which makes it easier to get things done. India will likelyfind it difficult to mobilize in sectors that require infrastructure,particularly <strong>en</strong>ergy and transportation. At the same time, bothcountries are full of <strong>en</strong>ergetic and focused people who want tomove forward and need financial security for their families.Can you apply a g<strong>en</strong>eralized approach to expansionthroughout Asia?No. Some countries like Japan and South Korea have fully developedinfrastructures, while many of the Asian markets are still small, butgrowing rapidly. In established markets, there is much more int<strong>en</strong>secompetition and growth is slower. Our investm<strong>en</strong>t managem<strong>en</strong>toperations in Japan and Singapore are good examples of cominginto a market with a global capability and competing with localplayers. You need to start off fairly small and be focused on aniche rather than seeking out head-to-head competition. If youpick your spots, you can fare well in an established market.<strong>HEC</strong> Montréal <strong>MAG</strong> › Printemps 2006 11
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