DBRS Ltd. has confirmed the ratings for Sun Life Financial Inc. and its major operating subsidiary, Sun Life Assurance Co. of Canada, at current levels, the rating agency said Wednesday.

The ratings are based on the strong market position enjoyed by Sun Life in the Canadian life insurance industry, notes DBRS, “where it is one of the three competitors that dominate the largely oligopolistic market in most insurance and wealth management lines for both individuals and groups.”

The rating agency adds that the Canadian operations are complemented by “a strategically evolving U.S. market presence in annuity products, individual life insurance and group benefits operations as well a growing presence in Asia, notably in Hong Kong, India and China, all of which benefit from the company’s financial strength and reputation”.

DBRS notes that Sun Life has raised $1.25 billion in additional capital over the past year in the markets, while also gaining $2.2 billion from the sale of its’ 37% stake in CI Financial to the Bank of Nova Scotia. “However, as capital has increased, the company has indicated that it is content to operate with a higher level of financial leverage than it had previously, bringing it into alignment with the more aggressive capitalization of Great-West Lifeco and Manulife Financial,” it adds.

At its level of financial leverage, given the current ratings, “the company’s financial flexibility is limited to resources on hand unless it chooses to issue common equity or reduce its common dividend,” DBRS says, adding that it feels that Sun Life “has little latitude to issue additional debt instruments without threatening the currently assigned credit ratings.”

IE