Best’s News & Research Service - October 25, 2018 10:58 AM (EDT)
A.M. Best Affirms Credit Ratings of BMO Life Assurance Company
- October 25, 2018 10:58 AM (EDT)
Oldwick //BestWire// - A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of BMO Life Assurance Company (BMOLAC) (Toronto, Canada). The outlook of these Credit Ratings (ratings) is stable. BMOLAC is ultimately owned by the Bank of Montreal (BMO).
The ratings reflect BMOLAC’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. BMOLAC underwrites a full suite of individual insurance products, including term life, whole life, universal life, critical illness, structured settlements and annuities. Moreover, the company has a growing book of pension risk transfer business, which offers additional risk diversification. The company distributes its products through a large network of sales agents across Canada, as well as through direct-to-consumer channels.
BMOLAC maintains a very strong risk-adjusted capitalization level, as measured by Best’s Capital Adequacy Ratio, and demonstrated by favorable Life Insurance Capital Adequacy Test ratio results. The company also has enjoyed strong operating performance over the previous five years, earning an average return on equity of more than 14% while maintaining a solid market position in certain niche product lines such as structured settlements and pension buyouts.
Offsetting rating factors include the challenges BMOLAC faces from larger players to increase its market share in Canada’s highly concentrated life insurance marketplace, as well as managing a book of business that has significantly increased its longevity risk exposure over recent years.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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