Sun Life sells reinsurance business

Sun Life Financial has announced the sale of Sun Life Assurance Company of Canada (Sun Life) to Berkshire Hathaway Life Co. of Nebraska. The move comes after a review of options for the company’s reinsurance business.

“This transaction reflects Sun Life Financial’s strategy to deploy capital to the parts of our business that can best achieve strong, sustainable growth,” said Donald Stewart, CEO of Sun Life Financial. “Our reinsurance business is profitable, but it is not a growth area for Sun Life Financial and this transaction releases capital which can be put to work in other businesses.”

Sun Life Assurance Company has about 70 employees located in Canada, the U.S. and Ireland. The unit assumes risks from life reinsurers and has life insurance in-force of $113 billion.

“There was significant interest in the marketplace in purchasing our reinsurance business, which speaks to the depth and talent of our reinsurance team,” Stewart said. “Sun Life will work closely with Berkshire Hathaway to ensure a smooth transition for clients and employees.”

The sale should increase Sun Life’s minimum continuing capital and surplus requirement (MCCSR) ratio by 10 to 14 percentage points. Sun Life’s MCCSR ratio was 210% as of June 30, 2010.

The transaction is subject to regulatory approval and is expected to close December 31, 2010.

(10/27/10)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.