Thomas Sutton capped a 43-year career at Newport Beach-based life insurer Pacific Life Insurance Co. in 2006.
In November, Sutton said he plans to turn over chief executive duties at the company to hand-picked successor Jim Morris starting in April.
Sutton, who’s set to stay on as chairman, is ending a 17-year reign as chief executive.
And he went out with a bang.
Pacific Life saw its best year of sales and profits in 2006.
The company closed the year with $98 billion in assets, Sutton said.
“The last year or so really is a culmination of a lot of events,” he said.
Diversification
Sutton transformed Pacific Life by expanding the business into sometimes unlikely, but profitable, ventures.
Pacific Life’s Aviation Capital Group, which buys planes and then leases them to commercial airlines, now counts 210 aircraft worth more than $5 billion.
The company’s variable annuities and mutual funds pull in more profits than life insurance,about $184 million for the nine months through Sept-ember.
The company’s revenue through Sept-ember was up 15% from the year-ago period to $3.9 billion.
“Boy, looking back over a long history,that’s pretty remarkable,” Sutton said.
Pacific Life’s insurance business began in 1868 in San Francisco, before making its way to Orange County.
It’s grown to No. 7 in variable annuities and No. 8 in life insurance, according to lists compiled by trade groups LIMRA International and Morningstar Inc.’s Vards.com.
“We have been growing at a faster rate than the industry for some time,” Sutton said.
By the time Sutton steps aside on April 2, he said he expects to hit $100 billion in assets.
“I’m getting more and more anxious to get started on the new phase of my life,” Sutton said.
Successor
Like Sutton, incoming chief executive Morris is a long timer at Pacific Life.
He joined as an assistant actuary after graduating from the University of California, Los Angeles, in the early 1980s. They’ve been prepping for the transition for some time, Sutton said.
At the start of 2006, Morris was made chief operating officer, a move that put him in line to follow Sutton.
His star rose with the 2005 retirement of Pacific Life Insurance vice chairman Glenn Schafer.
Sutton has been training Morris one-on-one for the big post.
“It entailed expanding his scope of responsibility and a lot of direct conversation on a whole range of topics,” Sutton said.
He said he’s “pleased” with the choice.
His advice after many years at the helm: “Remaining flexible in what we do and creative in terms of product design.”
Morris will oversee a big move of about 1,000 workers to a nine-story office tower the company is having built in Aliso Viejo.
“They are grading right now, and steel will start going up in spring,” Sutton said.
The building is expected to be completed in 2008 and should allow Pacific Life to shift some operations from elsewhere in the county and have plenty of room to grow in Aliso Viejo and at its Newport Center headquarters.
Pacific Life isn’t eyeing other acquisitions right now, Sutton said, after 2005’s $2.6 billion buy of aircraft leasing company Boullioun Aviation Services Inc. of Seattle.
Still, “You are always looking at what is going to make you better,” he said.
Nor is Pacific Life looking to go public, something that was considered in the past.
“We’ve looked at that from time to time, but the main motivation for that is to raise capital,” Sutton said. “We are in business for our policy owners. We don’t have the conflict that would arise from having to satisfy shareholders as well.”
Iconic Image
Sutton’s footprint on the company is likely to stay long after he leaves.
He helped come up with the company’s trademark logo, a breaching humpback whale.
“The reason for whales is first suggested by our proximity to the ocean, and our name,’Pacific,'” Sutton said.
Why the humpback?
“Because it’s lively and active,” Sutton said. “It’s the whale that more than any other, jumps out of the water.”
The company is eyeing growth from Sutton’s contemporaries.
“There’s a big market for baby boomers reaching retirement and the need to accumulate funds and to draw on those funds in an orderly way,” Sutton said. “That’s a critical factor for tens of millions of people for the coming years.”
