Sun Life projects Q3 loss of $621 million
Sun Life Financial Inc., Canada’s third largest insurer, said it expects to report a loss of $621 million for the quarter, about $572 million of which related to operations costs alone.
The insurer said the losses are related to “substantial declines in both equity markets and interest rate levels”, which particularly impacted the individual life and variable annuity businesses in SLF U.S.
“The third quarter was a period of exceptional market volatility,” said a statement from the company. “North American equity markets dropped by 12% – 14%, while yields on fixed income securities fell amid economic uncertainty in the European Union and U.S. monetary policy actions aimed at lowering interest rates on long-term treasuries. In the U.S., treasury rates reached historic lows, with 30-year yields down 146 basis points to 2.91%. Under the Canadian insurance accounting model, the future impact of September 30, 2011, market conditions is reflected in our current period results.”
The company noted that Sun Life Assurance Company of Canada remains well capitalized, with a Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio that is estimated to be approximately 210% as at September 30, 2011.
Sun Life will release its full third quarter 2011 financial results on Wednesday, November 2, 2011, after markets close.
