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AM Best Affirms Credit Ratings of Sun Life Financial Inc. and Its Subsidiaries; Revises Outlooks to Positive for Independence Life and Annuity CompanyAM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "aa" (Superior) of Sun Life Assurance Company of Canada (Sun Life) (Ontario, Canada) and Sun Life and Health Insurance Company (U.S.) (Lansing, MI). These companies are the core insurance subsidiaries of Sun Life Financial Inc. (SLF) (Ontario, Canada) [NYSE: SLF] (collectively referred to as Sun Life Group). Concurrently, AM Best has affirmed the Long-Term ICR of "a" (Excellent) and the Long-Term Issue Credit Ratings (Long-Term IRs) of SLF. The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the Long-Term IRs.) Additionally, AM Best has revised the outlooks to positive from stable for Independence Life and Annuity Company (Independence) (Wilmington, DE), a strategic subsidiary of SLF, and affirmed the FSR of A- (Excellent) and the Long-Term ICR of "a-" (Excellent). Lastly, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR of "bbb+" (Good) of Professional Insurance Company (Dallas, TX), an SLF runoff subsidiary. The outlook of these ratings is stable. The ratings reflect Sun Life Group's balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and very strong enterprise risk management. The group maintains a very strong level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR). The balance sheet is supported further by overall favorable operating earnings, strong liquidity metrics and a holding company that can provide additional financial flexibility. While Sun Life Group has focused on reducing volatility within the liability structure of its product offerings, its earnings remain moderately exposed to equity market volatility and changes in interest rates. Partially mitigating these risks is the extensive array of sensitivity and stress testing being conducted by the group, which goes beyond what is required by regulators and includes impacts on earnings, regulatory capital and liquidity. This provides protection to the group's global risk profile. The ratings of Independence reflect its balance sheet strength, which AM Best assesses as very strong as well as its marginal operating performance, very limited business profile and very strong enterprise risk management. The company's strategic importance to the Sun Life Group has increased in recent years since it began writing stop-loss insurance in 2020. AM Best believes that Independence will continue to benefit from its parent company's significant experience in the stop-loss insurance market as it coninues to grow in the space. The ratings also reflect Professional Insurance Company's balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, very limited business profile and very strong enterprise risk management. The company has operated as a runoff since 2010 and has been successful over that timeframe in maintaining profitability, and more recently, in returning capital to the parent as insurance in force declines. The following Long-Term IRs have been affirmed with stable outlooks:
Sun Life Financial Inc.-
The following Long-Term IRs have been affirmed with stable outlooks:
Sun Life Assurance Company of Canada-
Sun Life Capital Trust-
The following indicative Long-Term IRs have been affirmed with stable outlooks:
Sun Life Financial Inc.-
This press release relates to Credit Ratings that have been published on AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com. Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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