Thursday, August 10, 2006

Sun Life's Prieur Resigns

Scotia Capital, 10 August 2006

• A neutral event our opinion. A relatively "non-external face" at Sun Life, Prieur, who is 55, had spent the last twelve months in Hong Kong, assuming leadership of the company's Asian unit (in what was believed to be a "stop-gap" role) following the August 10, 2005 retirement of Doug Henck, who previously was President of Sun Life Financial, Asia. We believe the company is very close to announcing its Asian leadership position.

• While in Hong Kong, Prieur's President and COO duties we believe were assumed to some extent by CEO Don Stewart, who is 59 and is expected to continue on at Sun Life for a number of years.

• We expect the company will announce a replacement for Paul Dersksen, CFO, within the next 3 months, who just over 3 months ago announced he will be retiring, effective February, 2006.
The Globe and Mail, Sinclair Stewart, 10 August 2006

Sun Life Financial Inc. has lost a second key member of its executive team after Jim Prieur resigned as president to become chief executive officer of Conseco Inc., a rival U.S. insurer with a checkered past.

The 55-year-old insurance veteran will be the fourth CEO Conseco has appointed since 2003, when it emerged from one of the largest bankruptcy proceedings in U.S. history.

Mr. Prieur will replace interim CEO Jim Hohmann, who is remaining with Conseco as president and chief operating officer.

"It's a company that's been through a lot, and it's sort of on the verge of success," said Mr. Prieur, who will relocate to Conseco's Chicago offices next month.

"I think it's a real interesting opportunity."

Mr. Prieur, who has spent the past year in Hong Kong overseeing Sun Life's Asian expansion, was viewed by some as a possible successor to current Sun Life CEO Donald Stewart. His departure follows that of chief financial officer Paul Derksen, who recently announced his plans to retire at the beginning of next year.

Mr. Stewart admitted he was surprised when Mr. Prieur told him he was leaving after 27 years with the company. But he played down suggestions that Mr. Prieur was poised to replace him.

"It's a little hard for someone pretty close in age to me to be a logical successor," said Mr. Stewart, 59.

He said Sun Life is close to naming a new head for its Asian business, and is hoping to make an announcement on a new CFO by the end of next month. He is not replacing Mr. Prieur's role of president and chief operating officer.

"Life moves on, and we'll have new people in place, and the company will move forward," he said.

Mr. Prieur has focused much of his time recently on bolstering Sun Life's international presence, particularly in India, Hong Kong and mainland China. Under his watch, the Asian unit has increased profit by 63 per cent over the past four quarters.

He is also no stranger to the U.S. market, having lived there for several years to oversee one of Sun Life's insurance units. Conseco, however, which focuses on middle America, poses a different set of challenges.

While Sun Life is a conservative-minded company with more than 140 years of history, Conseco is a relative upstart that has been racked by regulatory probes, dire financial problems, an accounting scandal, and bad publicity.

Several times, it has faced criticism for generous executive pay packages, and was buffeted by controversy a few years ago after guaranteeing loans to some of its top executives. Some of these officials were unable to repay the money after the company's shares plummeted, leaving the company in the lurch.

One of Conseco's previous CEOs was ousted in 2000, and the company faced federal accounting probes in 2002, shortly before it tipped into bankruptcy protection. Since then, the CEO office has resembled a turnstile.

However, the company appears to be turning the corner. Early this month, it announced it would take a $100.3-million (U.S.) charge to settle a class-action lawsuit alleging some of its subsidiaries forced customers to pay higher premiums on some insurance products or surrender them for cash in order to bolster the parent company's finances.

Mr. Prieur described this as a significant step in aiding the company's turnaround, and allowing it to secure a better credit rating. That would help Conseco expand its sales reach and enter new markets.