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Sun Life expects deals in tough times


Sun Life Financial Inc. chief executive officer Donald Stewart says the credit environment will continue to pose a challenge into next year, but it's also presenting him with potential deals.

"We think it's just going to be a tough environment for some time to come, certainly through the balance of the year," Mr. Stewart told reporters in Toronto yesterday after the insurer's annual meeting.

"Every day we see in the international financial press new writedowns," he noted.

Investors punished Sun Life's shares last week after the company said it might miss its profit targets this year because of difficult financial markets, which caused its first-quarter earnings to miss analysts' expectations.

Yesterday, Mr. Stewart told shareholders at the annual meeting that the company's balance sheet and capital position remain strong.

And, because the same troubled environment that's hampering Sun Life is doing further damage to many other financial services companies, opportunities are arising, Mr. Stewart suggested.

"The economic conditions today are certainly presenting us with opportunities," he said. "We see potential for deals that is quite active, particularly compared with recent times."

He cited the United States as one area of interest, but also said the insurer has its eyes open in every jurisdiction in which it operates. "We are seeing opportunities, and we are looking at them," Mr. Stewart said, adding he's interested in pursuing deals in both of Sun Life's main businesses: life insurance and annuities, and asset management.

He sees another opportunity arising for the guaranteed products that Sun Life sells, because "2008 has been a bumpy ride for investors, underlining the value of guarantees."

Mr. Stewart also said that two decades from now China and India will be economic superpowers, and he believes Sun Life is in a position to leverage the growth there. As North America copes with the credit situation, Sun Life is growing in Hong Kong, Indonesia and the Philippines, he said.

The CEO also suggested yesterday that his retirement is not imminent. Chief executive officers at two other major Canadian insurers, Great-West and Manulife Financial Corp., have recently revealed their plans to step down.

Sun Life (SLF)

Close: $46.94, up 39¢

© The Globe and Mail

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