As variable-annuity sales slumped in 2009, the U.S. division of Sun Life Financial sharply increased its sales of the product.
Now the company plans to take advantage of market dislocation to jump from ninth place to at least fifth, said Jeffrey Grant, executive vice president and director of sales for Sun Life Financial Distributors Inc. in Boston.
"I think we can be a top-five player by the end of 2011," he said.
Sun Life was the ninth-biggest seller of new variable annuities in the third quarter, according to Morningstar Inc.'s annuity research center, jumping six spots from the previous quarter. Its variable-annuity assets rose 16% during the quarter, with its $1.08 billion in third-quarter variable-annuity sales translating into a 3.5% market share, according to Morningstar.
Industrywide, the products accounted for $48 billion of sales in the second quarter of 2007, but just $32 billion by the third quarter of 2009, according to Limra International Inc.
For the first nine months of last year, Sun Life's variable-annuity sales rose 64% over the year-earlier period, according to the company. By comparison, industrywide sales of the products dipped 22.9% during the same period, according to Morningstar.
Grant credits several factors for Sun Life's success. Foremost among them is that many of its competitors in the variable-annuity field have scaled back their efforts. "Many competitors have changed substantially or pulled out of the business," he said.
The absence of competition allowed Sun Life to fill the sales void, and also produced a crop of available sales talent that Sun Life used to expand its ranks. Industrywide layoffs allowed Sun Life to add about 50 wholesalers in 2009, including 10 for the bank channel, Grant said.
"We had the opportunity to add people from high-profile companies," he said. "A lot of people were displaced and looking for jobs, and a lot of them came to us."
Experienced sales professionals are especially important when their relationships can help a new employer get a foot in the door at new distributors; the fresh talent has helped Sun Life gain new selling agreements at several banks, Grant said.
Over the past few weeks, Sun Life has added selling agreements with Wells Fargo & Co., Bank of America Corp. and Toronto-Dominion Bank's TD Bank, Grant said. It has about 225 selling agreements with banks overall, according to a Sun Life spokesman.
"When a bank decides to bring on a new partner, they run it by the advisers in the field for feedback," Grant said. "If we have new wholesalers who have worked with these folks previously, that goes a long way."
Another key to Sun Life's success came early in the year, when it trimmed its variable-annuity product lineup to eliminate several products that were largely redundant, he said. For instance, at the beginning of last year, Sun Life offered eight versions of its living benefits; it pared the living benefit options down to two.
Having a more focused product lineup is smart, said Doug Dannemiller, a senior analyst at the research firm Aite Group. The last thing advisers want is to be unable to answer a client's question about subtle differences between products, he said.
Sun Life's initiatives could continue to pay off if variable-annuity sales rebound. Dannemiller expects advisers to soon be talking to clients about how to protect the assets they have and how to position for future growth. "For the mass-affluent market, annuity products are a good way to do that," he said.