Fitch Ratings has affirmed its ratings on Sun Life Financial Inc. (TSX:SLF) at ‘AA+’, and revised the insurer’s rating outlook to stable from negative.

The rating affirmation and outlook revision, “reflects the company’s improved overall operating results thus far in 2010 as reserving for future asset defaults has eased significantly and reserving charges for U.S. variable annuities and fixed annuities have also subsided,” Fitch says.

The rating agency says it believes that, for the most part, Sun Life’s businesses have returned to pre-crisis levels of profitability with the exception of U.S. individual life and annuities. Within the U.S. business, the firm has completed several rounds of repricing and redesigning its variable annuity and segregated fund products and accelerated its shift away from products that provide long-term irrevocable guarantees, Fitch says, adding that it believes this should help improve earnings.

The rating agency also says that it believes that Sun Life is well-capitalized, and that its’ disciplined investment strategies have produced very strong liquidity and high asset quality. Additionally, Fitch believes that the firm is well-provisioned for future credit losses and that future impairments in excess of reserves “are likely to be within manageable levels”.

IE