Roger Steel, chief executive of Sun Life Hong Kong, talks to Innovative Investor about his plans to strengthen the business performance and expand the operations.

Where do you see Hong Kong within the global financial markets? How badly is it going to be hit when compared to other areas in the region?

According to SOLAR, a study of consumer lifestyles, attitudes and relationships that Sun Life Financial did in four Asian countries from Jan to March 2009, we found that Hong Kong people felt more impact by the global financial market than the people in the region. 42% of middle class people said that they were worse off than a year ago. However, the majority of them had confidence that the employment situation and economy would become better within a year.

What is the plan for Sun Life Financial for the rest of the year? What areas are you looking to focus on, and what sectors are you looking to grow?

Sun Life Financial will focus on its strength and the basics for the rest of the year, such as customer service. We need to serve and take care of our customers well.

Sun Life Financial strives to develop innovative and competitive products that meet the financial and protection needs of our customers at different stages of their lives. We look forward to grow our agency force and continue to develop them into a professional advice-giving team. And we would also like to expand our bancassurance business and the MPF market.

What impact have the global markets had on your plans?

Sun Life Financial is a Canadian based financial services provider, and even President Obama praised the Canadian system on regulating the financial industry. So Sun Life's prudent approach in investment, diversification in product line and geography make us stand for the market volatility. In fact starting in August 2008, our business focus has shifted from investment link products (75%) and traditional (25%) to vice versa in 2009.
We also had a very good performance in Q1, which exceed our plan by more than 10%.

What trends are you noticing with the investment plans you offer?

Traditional life and protection products will expect to play a leading role in the insurance market sales. However, when the investment market becomes more stable, there will be increasing demand in investment-linked products later this year. Customers are now very conscious and willing to arrange better health protection to themselves and their families. We can see there are huge opportunities in the health insurance market. Sun Life will keep on expanding our existing wide range of protection and financial planning products in order to help our customers to achieve lifetime financial security.

What is the penetration of life insurance among people in Hong Kong at the moment and is this increasing? Why?

The market new business premium fell in 2008 due to the global economic turmoil. However, we see a solid growth in non-linked products as customers are looking for more guarantees and protection as their risk management tools. In 2008, Sun Life recorded 78.5% growth in non-linked business comparing to 2007.

Your recent SOLAR survey reported that retirement savings and job security was not top of their priorities. Have you noticed a decline in insurance and pension take-up?

Not really. MPF in Hong Kong is mandatory, but not adequate enough for retirement planning. Customers need to take on diversified investments in order to save up enough for retirement. One of the benefits for Sun Diamond is to have steady income from age 60 to 90. That will help to ease their worries.

According to SOLAR, even in this economic downturn, 54% of respondents thought it were important to plan for their retirement savings and 32% of them said they were likely or very likely to buy insurance for their retirement planning in the coming year, which was highest among all insurance products.

You have been quoted as saying that it is crucial for the insurance industry to take up the responsibility to help customers to develop better long-term investment strategies but who should take the lead?

Both customers and the industry need to do it hand in hand. Industry should take the lead to educate the general public on long-term investment strategies and insurance is a long-term investment to protect yourself and your family. It's a lifetime commitment and lifetime financial security. However, on the other hand, customers should be more open to acquire more information and compare in order to be a smart customer and make the right choice. Investment has to be diversified in terms of asset classes and timing.