Canada's Sun Life Financial Inc., just repaid the U.S. for that whole "Fifty-Four, Forty or Fight" thing back in the 19th century. Here is Bloomberg with the details:
Sun Life Financial Inc., Canada’s third-largest insurer, plans to stop selling variable annuities and individual life insurance products in the U.S. and will cut 800 jobs there as it shifts focus to Canada and Asia. The stock had its biggest gain in more than two years.I would tell the U.S. employees of Sun Life to treat the new boss, same as the old boss, but he just fired their asses. So what did the new CEO have to say about all of this anyway?
Sun Life expects to record costs of about C$75 million ($73 million) to C$100 million from the changes, a portion of which will be in the fourth quarter, the Toronto-based company said today in a statement. The insurer will also take a writedown of about C$97 million.
Variable annuities, which provide guaranteed incomes to customers regardless of market performance, have led to losses at Sun Life and bigger rival Manulife Financial Corp. after equities plunged. Sun Life’s U.S. insurance unit had losses of C$569 million in the third quarter, and C$279 million in the first nine months of 2011.
The move follows the Dec. 1 promotion of Dean Connor to chief executive officer, replacing Donald Stewart, who retired. Sun Life plans to concentrate in the U.S. on group insurance and voluntary benefits, as well as its Boston-based MFS Investment Management business. The company also pledged to focus on Asia and Canada.
Sun Life is “setting out on a course that is focused on improving return on equity, reducing the volatility in the business, and being more focused in areas that we think provide superior avenues for growth,” Connor, 55, said today in a telephone interview.Why thank you, new Sun Life CEO Dean Connor, for proving conclusively that a Canadian CEO can be just as full of shit as any of his American counterparts. My hat is off to you, sir.
Bonus: Merry Christmas from the Great White North
Ah .... variable annuities. I occasionally hear the Saturday morning program length commercials aimed at near-retirees ... "guaranteed fixed income no matter what the markets do, and never a loss of principal." Now we know how they work... they don't. What happens to the old folks who already bought into these scams? Do they get a lump sum check of their principle investment in the mail someday, or will these guys keep the Ponzi going using Canadian and Chinese "investors?"
ReplyDelete@Mr Sunshine - when I retire from my job in a few years, I actually have the option of rolling my 401K account into one of those annuities. Of course, I plan to just withdraw all the money and split, IRS early withdrawal penalty be damned.
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