SLF Sun Life Financial Inc

Sun Life Financial Inc., Canada's third-largest insurance company by assets, posted a fourth-quarter profit Wednesday that beat analysts' expectations despite challenges posed by low interest rates, tumbling commodity prices and stock-market turbulence.

Toronto-based Sun Life, which reported results after the close of financial markets, said its results were helped in part by the weaker Canadian dollar and stronger economic growth outside of its home market. The sinking currency, for instance, had the effect of boosting income earned from its U.S. operations.

Sun Life's underlying net income rose to 646 million Canadian dollars ($462 million) or C$1.05 per share for the October-to-December quarter. That compared with a profit of C$360 million, or 59 Canadian cents, for the same period a year earlier.

Analysts polled by Thomson Reuters had expected a profit of 87 Canadian cents a share for the three-month period that ended Dec. 31, 2015.

Sun Life left its quarterly dividend unchanged at 39 Canadian cents per share.

"Our strong fourth quarter capped off a successful year of growth and momentum for Sun Life," said President and Chief Executive Officer Dean Connor in a release.

"In 2015, we achieved underlying net income of C$2.3 billion, surpassing our 2015 financial objective of C$1.85 billion and ended the year with assets under management of C$891 billion," he added.

Sun Life's minimum continuing capital and surplus requirements ratio, a key measure of capital strength, stood at 240% at the end of the fourth quarter.

"In the U.S., we made excellent progress this year in improving the profitability of our group life and disability business, and we continue to be a leader in medical stop-loss insurance where we reported a 12% increase in business in-force year over year," said Mr. Connor.

Persistently low interest rates are making it difficult for insurers to generate investment returns to fund their liabilities. Additionally, low oil prices are acting as a drag on Canada's economic growth and fueling volatility on that country's benchmark stock index.

Sun Life, meanwhile, is plotting more growth outside Canada including in the U.S., which is benefitting from a rosier economic outlook. The insurer's strategy includes its previously announced acquisition of Assurant, Inc.'s U.S. employee benefits business, which is expected to close during the first quarter of 2016.

Write to Rita Trichur at rita.trichur@wsj.com

(END) Dow Jones Newswires

February 10, 2016 19:35 ET (00:35 GMT)

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