February 16, 2011 / 10:20 PM / 7 years ago

UPDATE 2-Sun Life profit jumps 71 pct on markets

* Q4 EPS C$0.88 vs EST C$0.81

* Stronger financial markets drives profit

* Shares have risen more than 12 pct this year

(Adds details)

TORONTO, Feb 16 (Reuters) - Sun Life Financial (SLF.TO) said on Wednesday its fourth-quarter profit jumped 71 percent, topping analysts estimates, as rising stock markets and bond yields boosted Canada’s No. 3 insurer’s investments.

Net income rose to C$508 million ($518.4 million), or 88 Canadian cents a share, in the quarter ended Dec. 31. That compared with a profit of C$296 million, or 52 Canadian cents, in the year-before quarter.

Analysts polled by Thomson Reuters I/B/E/S had expected, on average, a profit of 81 Canadian cents a share.

The Toronto-based insurer has extensive operations in Canada, the United States and Asia. As a seller of both insurance and wealth management products, it competes with Manulife Financial (MFC.TO) and Great-West Lifeco (GWO.TO).

Rising equity prices added C$181 million to the bottom line, while rising interest rates added C$113 million. The improved financial markets help the company’s wealth management business, and also allow it to hold less reserves to back future obligations.

The strong markets more than offset C$58 million in losses stemming from changes to actuarial assumptions to reflect higher costs, unfavorable currency movements, and assumptions regarding clients’ lifespans.

Return on equity for the fourth quarter improved to 12.4 percent from 7.6 percent a year earlier.

Assets under management rose to C$464.2 billion at Dec. 31 from C$432.6 billion a year earlier.

The company’s shares, which have risen 12.6 percent so far this year, closed at C$33.91 on the Toronto Stock Exchange. The results were released after markets closed.

$1=$0.98 Canadian Reporting by Cameron French; Editing by Frank McGurty

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