Forthcoming regulatory changes could prompt future strategy shifts for Canada’s three major life insurers, according to a report published on Monday by Fitch Ratings.

Manulife Financial Corp., Sun Life Financial, Inc., and Great-West Lifeco, Inc all have strong business profiles and capital positions that underpin their ratings, the rating agency notes.

“All three insurers carry very strong ratings in the ‘AA’ category, which are supported by leading market positions, balance sheet strength and generally stable operating performance,” Fitch says in a statement.

While all three have strong capital positions, and moderate leverage, their earnings and financial performance has diverged lately. In particular, the Great-West Life’s earnings have been more stable than its peers, “notwithstanding the continued underperformance of its asset management segment and the restructuring of its Canadian operations,” Fitch says.

Sun Life’s earnings have stabilized and improved in recent years, Fitch adds, and that it expects this to continue in 2017.

As for Manulife, it is “focused on increasing its returns through growth in less capital intensive businesses, namely in its Asian and wealth and asset management segments,” Fitch says.

“The Canadian life insurers have very strong business profiles, comprehensive product offerings and geographic diversification which supports their positions, however they do remain exposed to some underperforming legacy businesses which are a drag on results,” says Dafina Dunmore, director at Fitch Ratings, in a statement.

Fitch also notes that the results of Canadian life insurers “are inherently more volatile” than for their U.S. peers, due to differences in accounting regimes. The rating agency adds that it considers the Canadian regulatory environment for life insurers to be “effective”.

“We expect all three insurers to remain in a strong capital position under the new Life Insurance Capital Adequacy Test (LICAT) framework coming into effect next year, but it could lead to tactical shifts in strategy including modest product changes in an effort to obtain offsetting credits for diversification and participating/adjustable products,” says Dunmore.