A Canada-based life insurer is exiting the variable annuities and individual life products markets in the U.S.
Sun Life Financial Inc., Toronto, (NYSE: SLF), disclosed its decision on Monday to halt sales of its domestic U.S. variable annuity and individual life products effective December 30. The decision follows completion of a strategic review of the company’s businesses.
In a press statement, Sun Life President and Chief Executive Officer Dean Connor says that a desire to improve returns on shareholders’ equity and reduce volatility were among the factors contributing to the company’s market reorientation.
“The decision to discontinue sales in these two lines of business is based on unfavorable product economics which, due to ongoing shifts in capital markets and regulatory requirements, no longer enhance shareholder value,” says Connor. “This decision reflects the company’s intensified focus on reducing volatility and improving the return on shareholders’ equity by shifting capital to businesses with superior growth, risk and return characteristics.
“The decision to stop selling variable annuity and individual life products in the U.S. will not impact existing customers and their policies,” he adds.
Going forward, says Connor, Sun Life will seek to strengthen its business in four key areas, including: (1) insurance, wealth management and employee benefits; (2) group insurance and voluntary benefits in the U.S.; (3) investment/asset management (including MFS, a SunLife’s investment manager that has a large U.S. presence and more than $250 billion (U.S.) of assets under management globally); and (4) Sun Life’s market presence in Asia.