Canadian insurance and wealth group Sun Life Financial is looking to expand its distribution footprint in Asia.

The firm is looking at Singapore and Thailand in particular, has made it clear that its priority will be building scale.

However, the firm won’t follow rival Manulife’s approach, which saw it signing a 15-year regional distribution deal with DBS Bank in April this year at an initial cost of $1.2 billion.

Roger Steel, Asia president for new markets and business development, said Sun Life’s “disciplined” investment approach meant that it won’t get into deals with a “stratospheric number”.

Steel was speaking to AsianInvestor about Sun Life’s growth plans for Asia, which include an imminent launch of an asset management firm in Hong Kong, as reported last week.

The firm is keeping a close look on the potential of Singapore and Thailand, two Asean markets where it doesn’t have a presence.

“Singapore and Thailand are two markets that make the most sense for us [for expansion]. But because we are disciplined, we didn’t get into that stratospheric number just to be in Singapore,” Steel said, referring to Manulife’s recent bancassurance deal.

“We have a strong sense of what represents value. Our strong preference is building the scale where we are now,” he added.

Steel said the key to Sun Life entering new markets was scale: “We look at some of these markets and some of our competitors have had pinprick operations. We do not have and we will not [have pinprick operations]. If we can’t see the route to scale, we are not going in.”

While Sun Life was looking at Singapore for opportunities, it had observed that new entrants to the city-state were not demonstrating the ability to build scale.

Just two months ago, Standard Life announced the closure of its insurance business in Singapore after two years to focus on asset management.

While Thailand is an attractive market with a large population, the market is very competitive and closed to new entrants for life insurance licences, Steel said: “We did a greenfield joint venture entry in Vietnam, which is not possible to do in Thailand with a new licence.”

Since 2009, Sun Life has established four joint ventures in Asia, namely with Aditya Birla Group in India for insurance and asset management; with Khazanah, a Malaysian sovereign wealth fund, to acquire a local insurer that included a bancassurance deal with CIMB in Malaysia; with PVI Holdings, a subsidiary of PetroVietnam in Vietnam, for insurance; and with Everbright for insurance and asset management business in China.

“If the right opportunity comes up we would like to be in additional markets but it would have to be a scale opportunity which brings distribution,” Steel said.

Sun Life also aims to build multi-channel distribution capabilities. In Malaysia, for instance, it distributes products through banks but would like to sell through agents too.

It is only in China that Sun Life sells products through a true multi distribution channel, which includes banks, agents and an online platform.