Sun Life Financial, the Canadian insurer, is examining plans to sell its UK business in the latest sign that overseas operators are retreating from the market.
The Toronto-listed company is lining up Morgan Stanley to advise on a possible sale, people familiar with the matter said.
The mooted disposal comes as Dean Connor, Sun Life’s new chief executive, attempts to revive the group’s fortunes.
“Like all insurance companies in Canada they have been looking to strengthen their capital position,” said Michael Goldberg, analyst at Desjardins Securities in Toronto. “Low interest rates are a disaster for the industry.”
Sun Life’s century-old UK business, which has £11.8bn of assets under management, stopped writing new business in December 2010.
It is among the 77 UK life assurance companies that have over the past 15 years or so stopped writing new policies, according to Ned Cazalet, the financial services consultant.
Life assurers cease writing new business because profitability is disappointing, capital positions inadequate, or they are making strategic changes.
Darko Mihelic, analyst at Cormark Securities in Toronto, said the UK was absent from Sun Life’s list of “core” areas. A sale would aid Asian expansion.
Sun Life and Morgan Stanley declined to comment.