(Bloomberg) — Sun Life Financial Inc., Canada’s third-largest insurer, is seeking a buyer for a U.S. annuities business that may fetch more than $1 billion, say people with knowledge of the matter.

Sun Life said in December that it would stop U.S. sales of variable annuities and individual life insurance. U.S. asset managers such as Guggenheim, Apollo Global Management LLC and Harbinger Capital Partners LLC have bought annuities operations from insurers in part to get access to a stable pool of funds for their investment-management operations.

Frank Switzer, a spokesman for Toronto-based Sun Life, declined to comment, as did Mary Claire Delaney of Morgan Stanley, Torie von Alt at Guggenheim and Alex Child-Villiers, a spokesman for Cowdery.

CEO Dean Connor told investors in March that the insurer aims to have $2.02 billion in annual operating income by 2015 as it focuses on businesses in Asia, the MFS mutual fund business and group and voluntary benefits in the United States. The company had operating income of $105 million in 2011, hindered by costs for variable-annuity and segregated-fund contracts.

Annuities contracts offer savers regular income payments, and are often used for retirement planning. Aviva Plc is also seeking a buyer for its U.S. annuities unit, people with knowledge of the matter said last month. Apollo, Harbinger and Guggenheim had all submitted offers for that unit, they said.

While most of the divisions bought recently by asset managers focus on fixed annuities, as does the Aviva business, Sun Life’s U.S. arm consists mostly of variable annuities, in which the ultimate payouts can vary based on the performance of the underlying investments.

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