Nov. 20 (Bloomberg) -- Sun Life Financial Inc. needs to make an acquisition in the U.S. life-insurance market if Canada’s third-largest insurer wants to significantly expand there, President Jon Boscia said.

“In life insurance, I think we need an acquisition, particularly in the shorter time period of two years,” Boscia said in an interview yesterday at Bloomberg’s headquarters in New York.

One-third of Toronto-based Sun Life’s C$15.6 billion ($14.7 billion) in revenue last year came from the U.S., where it owns Boston-based fund company MFS Investment Management. Sun Life’s largest U.S. acquisition in more than two years was the $650 million purchase of Genworth Financial Inc.’s group benefits business in 2007.

Boscia, 57, came to Sun Life last year after stepping down as chairman and chief executive officer of Lincoln National Corp. in 2007. He oversaw the $7.5 billion purchase of Jefferson-Pilot Corp. during nine years at the helm of the Philadelphia-based insurer.

“The acquisitions I was fortunate enough to be involved with in my prior company were all, I would say, game-changing acquisitions for the company,” Boscia said.

Boscia declined to name possible takeover targets. Sun Life was in talks in March to buy most of Hartford Financial Services Group Inc.’s life-insurance unit, three people with knowledge of the matter said.

Investment Moratorium

Sun Life amassed C$11.8 billion at the end of the third quarter, more than double the amount of cash and equivalents over the past year, partly gathered to protect against swings in equity markets. Now, Boscia said the company is lifting its “investment moratorium” and may eventually look at commercial real estate.

“There’s going to come a point in time when the commercial real estate market will begin having an upturn, but yet the pricing will still be distressed,” Boscia said. “We want to make sure we stay close to that market so that if we see it firming, and we see it tightening up, it will be an opportunity for us to invest in commercial real estate loans.”

The company boosted its investments in energy, particularly in Canada, where the “economy is highly dependent on natural gas and oil,” Boscia said.

Sun Life is unlikely to sell shares to boost capital unless it’s needed for an acquisition, Boscia said. This week, larger Canadian rival Manulife Financial Corp. said it will sell as much as C$2.88 billion in stock.

Hoarding Capital

“Capital’s a very, very expensive thing to hoard if you don’t need it,” Boscia said. “Right now, we haven’t needed capital.”

Sun Life held its first conference for analysts in New York yesterday to explain plans for expansion in insurance, group benefits and asset management. The insurer began an advertising campaign this month, which will include spots on the National Football League’s Super Bowl pre- and post-game shows next year.

“It’s going to be tough for Sun Life to create brand-name awareness,” said Ian Nakamoto, director of MacDougall MacDougall and MacTier Inc. in Toronto, which manages about C$4.2 billion in assets, including Sun Life shares. “The average person on the street has probably never heard of them in the U.S.”

Sun Life ranked 15th for U.S. variable annuity sales in the second quarter, according to data from Windsor, Connecticut- based research firm LIMRA International, with sales of $1.41 billion. That’s up from $1.05 billion in 2008, when the company ranked 18th.

The company’s MFS Investment established the first U.S. mutual fund in 1924. Robert Manning, CEO of the fund unit, told investors yesterday that the business could double to $350 billion in assets without altering its model.

Boscia, who works from Sun Life’s office in Wellesley Hills, Massachusetts, said he hasn’t been given any guarantee he will succeed CEO Donald Stewart, who turned 63 this month.

“If at some point in time, the board were to say to me, ‘We would like you to be in that type of a role,’ I’d be honored to have that happen,” Boscia said. “And I think Toronto’s a terrific city to live in.”

To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net.

Last Updated: November 20, 2009 00:00 EST