Best’s News & Research Service - December 19, 2017 02:32 PM (EST)
A.M. Best Affirms Credit Ratings of Sun Life Financial Inc. and Its Subsidiaries
- December 19, 2017 02:32 PM (EST)
Oldwick //BestWire// - A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of Sun Life Assurance Company of Canada (Sun Life) (Ontario, Canada) and Sun Life and Health Insurance Company (U.S.) (SLHIC) (Lansing, MI) – the core insurance subsidiaries of Sun Life Financial Inc. (SLF) (Ontario, Canada) [NYSE: SLF]. Concurrently, A.M. Best has affirmed the Long-Term ICR of “a-” and existing Long-Term Issue Credit Ratings (Long-Term IR) of SLF.
Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Independence Life & Annuity Company (Wilmington, DE), as well as the FSR of B++ (Good) and the Long-Term ICR of “bbb+” of Professional Insurance Company (Dallas, TX). The outlook of these Credit Ratings (ratings) is stable. (Please see link below for a detailed listing of the companies and ratings.)
The ratings reflect SLF’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
Sun Life’s leading positions in its core Canadian markets – group life and health benefits, group pension and individual insurance – are complemented by its focus on the U.S. group insurance and voluntary benefits space. SLF’s diversified revenue stream is enhanced further by its global asset management business, led by MFS Investment Management, and has increased the asset base and broadened service capabilities through Sun Life Investment Management.
Sun Life continues to expand its footprint in Asia through local subsidiaries and partnerships, which are key contributors to the organization’s results. Expansion in key regions of Asia has strengthened SLF’s presence in this market. Additionally, A.M. Best views the companies’ individual and consolidated risk-adjusted capitalization, strong financial flexibility, as measured by a favorable financial leverage and interest coverage ratio, along with a sophisticated ERM process as supportive of the companies’ rating level.
While the group focuses its U.S. operations on markets and businesses that lack sensitivity to interest rates and equity market fluctuations, significant competition remains from established players in these markets. SLF is a market leader in the employee benefits market in Canada, and its acquisition from Assurant has significantly raised the profile of SLF in the U.S.-employee benefits market. While the company maintains a diversified investment portfolio with a focus on high credit and strong liquidity profiles, the company retains exposure to real estate-linked assets through its investments in commercial mortgage loans, direct real estate and residential and commercial mortgage-backed securities, and may be subject to losses and liquidity exposure under a stressed economic scenario. Partially mitigating these liquidity concerns are the company’s reduction of volatility within the liability structure of their product offerings and focusing on less capital-intensive businesses, which provides added diversification to the company’s earnings profile.
For a complete listing of SLF and its insurance subsidiaries’ FSRs, Long-Term ICRs and Long-Term IRs, please visit Sun Life Financial Inc.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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