AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (ICR) of “aa” (Superior) for Sun Life Assurance Company of Canada and Sun Life and Health Insurance Company, which are core subsidiaries of Sun Life Financial Inc.
The ratings agency also affirmed the Long-Term ICR of “a” (Excellent) and Long-Term Issue Credit Ratings (IR) of Sun Life, with a stable outlook for all ratings.
Additionally, AM Best affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) for Independence Life and Annuity Company, a strategic subsidiary of Sun Life. The FSR of B++ (Good) and the Long-Term ICR of “bbb+” (Good) for Professional Insurance Company, a Sun Life runoff subsidiary, were also affirmed, with a stable outlook.
The ratings reflect Sun Life Group's strong balance sheet, which AM Best assesses as "strongest," supported by favorable operating performance, a robust business profile, and very strong enterprise risk management.
According to AM Best, Sun Life has maintained high levels of risk-adjusted capitalization, as evidenced by strong scores in Best’s Capital Adequacy Ratio (BCAR) and the Canadian Life Insurance Capital Adequacy Test (LICAT). The group's dominant market positions across Canada, the US, and Asia are also attributed to its robust ERM framework.
In its fourth quarter of 2024, Sun Life reported an underlying net income of $965 million, a 2% decrease from the previous year. This decline was primarily due to challenges in the Group - Health & Protection segment, which experienced unfavorable morbidity in US medical stop-loss and less favorable experience in Canada.
Individual protection saw a 19% increase in underlying net income to $339 million for Q4, compared with $55 million a year ago. Full-year results stood at $1.27 billion, an increase of $133 million from a year ago.
However, the group health and protection segment reported underlying net income of $266 million, down $99 million or 27% for the quarter, and $1.2 billion for the year, a decline of $117 million or 9%.
Assets under management reached $1.54 trillion as of December 31, 2024, reflecting an increase of $142 billion or 10% from the previous year.
