Sun Life Financial reported Wednesday third quarter income of $448.5 million, up from a loss of $138.6 million in the third quarter of 2009. Earnings per share were $0.78.

Third quarter success was driven by improvements in equity markets, as well as a favorable impact from "management actions and assumption changes which generally occur in the third quarter of each year."

The company noted that it was preparing for continued pressure in the U.S. commercial mortgage market with an increase in "mortgage sectoral allowance."

Assets under management grew to $450.6 billion, an increase of 10%. Growth in the company's wealth businesses as a result of increased mutual and managed fund sales contributed to the increase, as did a stronger Canadian dollar, and the company's acquisition of Lincoln U.K.

"Improvements in equity markets and continued strong execution of our strategy resulted in solid earnings across major business lines and geographies compared to the same period last year," Donald Stewart, CEO, said in a statement.

The U.S. group reported income of $39 million, compared with a loss of $386 million in the third quarter of 2009. Improvements in equity markets were offset by unfavorable interest rates, especially in the individual insurance segment which lost $171 million.

Variable annuity sales fell 27% from third quarter 2009 to $794 million as competition increased. Sun Life's decision to "de-emphasize" its fixed annuity line led to a drop in sales, as was expected.

The investment management segment increased to $53 million from $39 million one year ago, on higher average net assets, which grew to $195 billion.

Assets under management total $204 billion. According to the company, this is the first time monthly closing AUM has been over $200 billion since 2007.