Standard & Poor’s said on Wedneday that Canada Life Assurance Co.’s expected $45 million reduction in earnings in the third-quarter will not affect its rating or outlook for the firm.

Canada Life firm blamed the shortfall on the devaluation of global equity markets. Declining global equity markets generally lead to reduced fee income, losses from equity investments supported by surplus, and increased reserving requirements to support segregated fund guarantees and the unwinding of negative reserves. These factors are market based, rather than company specific, said S&P analyst Donald Chu.

Chu noted that Canada Life’s premium and deposit business for the first nine months of 2001 remain strong; however, earnings are expected to be below expectation for fiscal 2001.

Standard & Poor’s also said it believes that future consolidation expected in the insurance and wealth management industry will place increased pressure on Canada Life’s asset growth and margins. In addition, the company’s weaker performance in the U.K. market, and the lack of scale in the U.S. market, could put pressure on Canada Life’s outlook in the near term.