A.M. Best Co. has affirmed the financial strength ratings (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of the life insurance subsidiaries of Manulife Financial Corporation (MFC) (Toronto, Canada) (NYSE:MFC). Concurrently, A.M. Best has affirmed the ICR of “a-” as well as all existing debt ratings of MFC. The outlook for all ratings is stable. (See link below for a detailed listing of the companies and ratings.) The rating affirmations reflect Manulife’s favorable earnings in 2013 due to recent interest rate increases, adequate risk-adjusted capitalization relative to its current ratings level and strong market position in its core lines in North America and Asia. Recent de-risking initiatives have led to an increased focus on less capital intensive lines of business and should result in less volatility in reported earnings over time. This strategy favors growth in sales of mutual funds, wealth products and less interest sensitive protection products. MFC continues to maintain significant scale in its core business lines and has seen growing assets under management. Over the last few years, MFC’s various strategic actions have moderated the impact of the macro-economic challenges and equity market volatility on its consolidated risk profile and balance sheet. While the company is currently adequately hedged per its risk targets, recent changes in hedging strategies, product design and pricing look to improve profitability. Other strategic actions include curtailing or suspending the sales of capital intensive products, such as annuities in the United States (e.g., variable annuities and book value fixed deferred annuities). Offsetting rating factors include MFC’s significant in-force exposure to equity market and interest rate risk, particularly within its insurance segments. Despite the recent de-risking strategies, A.M. Best believes that MFC will continue to face challenges in managing its large book of in-force business given the continued historically low interest rate environment and global economic uncertainty.