A.M. Best Affirms Ratings of Sun Life and Its Affiliates

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating (FSR) of A++ (Superior) and the issuer credit ratings (ICR) of “aa+” of Sun Life Assurance Company of Canada (Sun Life) (Toronto, Canada), Sun Life Assurance Company of Canada (U.S.) (Wilmington, DE) and Sun Life Insurance and Annuity Company of New York (New York, NY). Concurrently, A.M. Best has affirmed the ICR of “aa-” and the debt ratings of Sun Life Financial Inc. (SLF) (Toronto, Canada). The outlook for all ratings is stable. (See link below for a detailed listing of companies and ratings.)

The ratings are based upon SLF’s diversified revenue stream from multiple regions, profitable operations and favorable risk-adjusted capitalization. SLF is a Canadian-based holding company with a top three market position in the Canadian insurance market. SLF also maintains strong operations in the U.S. life insurance and financial services segments, as well as an expanding wealth management and life insurance operation in Asia. SLF operates within a well developed and fully integrated risk management framework.

SLF has maintained favorable debt servicing capabilities, bolstered by its strong market position and favorable earnings base. SLF’s earnings are sustained by its diverse operations that have been enhanced by expense synergies and the improved performance of its asset management business. A.M. Best anticipates that SLF will maintain adjusted debt to capital at levels below 25%. Furthermore, its cash flow coverage remains strong at roughly 11 times.

Partially offsetting these strengths is the highly competitive landscape in its core domestic and international markets. Although operating earnings are stable and returns on equity remain favorable, A.M. Best believes Sun Life will continue to face challenges due to global economic pressures and equity market volatility. The strengthening of the Canadian dollar relative to foreign currencies also has added strain to its reported income. In addition, earnings at MFS may be pressured by the weak markets in the U.S. In addition, the future earnings contribution from SLF’s international business may be subject to uncertainty, reflecting a number of risks inherent in emerging markets.

For a complete listing of Sun Life Financial Inc.’s FSRs, ICRs and debt ratings, please visit www.ambest.com/press/061901sunlife.pdf.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.