Low bond yields prompt Sun Life to seek growth
* CEO says would rather buy assets than let money sit
* 10-year bond yields hover below 2 pct
* Sun Life, Khazanah buy Aviva Malaysian JV
* Canadian insurer focused on Asia growth
By Cameron French
TORONTO, Jan 17 (Reuters) - Low bond yields have taken a nasty bite out of Sun Life Financial Inc's profits over the last few years, but they're also helping drive the insurer's latest push to expand overseas.
With benchmark 10-year yields below 2 percent in both Canada and the United States, and shorter-term rates even worse, the insurer can put its cash to work more effectively by investing in growth, the chief executive of Canada's third-largest insurer told Reuters.
"Interest rates are so low today, the returns we're earning on the cash are lower than any of us would like and so if you can put that cash to work in businesses that are earning good returns that's a good use of that cash," said CEO Dean Connor.
Sun Life put some of that cash to work on Thursday, announcing it will partner with Malaysian state investor Khazanah to buy Aviva Plc's Malaysian insurance joint venture with lender CIMB Group for 1.8 billion Malaysian ringgit ($597 million). Continued...