A.M. Best Affirms Rating of Sun Life Assurance.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--June 5, 2000 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the A++ (Superior) financial strength rating of Sun Life Assurance Company of Canada, Toronto. Also affirmed are the A++ financial strength ratings of its strategic subsidiaries Sun Life Assurance Company of Canada (US), Wilmington, Del. and Sun Life Insurance & Annuity Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New York. The rating is based on the consolidated financial strength and operating performance of the company and its subsidiaries. It reflects the group's leading market positions of its business units in Canada, the United Kingdom and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ; strong capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. ; diversified diversified (di·verˑ·s operations throughout the world and sustained growth from Massachusetts Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , its U.S. mutual fund operation. Sun Life's leading market positions throughout the world are maintained by its wealth management and protection subsidiaries. The group is a leader in Canada's pension and group life and health markets, a major insurer of group risks in the United Kingdom and prominent in the United States' individual life, group life and health, variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. and mutual fund markets. As a result of a competitive product line and an emphasis on customer service, the group is expected to maintain its current position in these markets. Sun Life's international expansion has continued with the granting a life insurance license in China. Sun Life's core earnings and subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". have enabled it to maintain superior capital strength. This may be further enhanced by the company's recent demutualization Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Notes: This means mutual/life insurance companies convert from policyholder companies to stock companies. , which provides broader access to capital, positions it well to compete in the rapidly changing financial services sector and provides the increased financial flexibility to pursue growth strategies. Offsetting these strengths are the challenges the company faces to improve the profitability of its United Kingdom operations and sustain its Canadian market presence--primarily the result of continued industry consolidation and the maturity of the individual life market. In the past two years, Sun Life's earnings have been impacted by significant reserve strengthening in the United Kingdom related to guaranteed annuity options and pension misselling. A.M. Best believes the company will be challenged to improve its financial performance in the United Kingdom, where it must contend with larger competitors. However, it has initiated a significant cost reduction exercise, which should position it to improve returns. The company also must continue to address industry review requirements related to pension misselling as well as manage its interest rate and mortality risk associated with guaranteed annuity options. Sun Life's restructuring of its individual agency system in Canada has reduced distribution expenses. However, growth will depend on a complementary brokerage system and strategic alliances to enhance agent productivity, sustain a competitive advantage and gain access to higher net worth individuals. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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