Canadian insurer Sun Life Financial on Wednesday reported a bigger-than-expected drop in underlying profit for the second quarter.

Underlying net income, which excludes the impact of interest rates and equity market movements, fell about 10 per cent to $554 million, or 90 Canadian cents per share, in the quarter ended June 30.

Analysts on average were expecting earnings of 92 cents per share, according to Thomson Reuters I/B/E/S.

Sun Life said its reported net income fell 34 per cent to $480 million, or 78  cents per share. That reflected a decline in interest rates during the second quarter, which the company said was due to macroeconomic factors including Britain's decision to leave the European Union.

"Rounding out a poor quarter for the lifecos, Sun Life's earnings are not likely to receive a warm reception in trading tomorrow," said Barclays' analyst John Aiken.

Manulife Financial Corp, Canada's biggest life insurer, last week reported a lower-than-expected quarterly profit, blaming low interest rates and Brexit-driven market volatility.

Sun Life's underlying net income in Canada fell 20 per cent to $200 million, while underlying net income from its U.S. business rose 8.6 per cent to $114 million.