AM Best Affirms Credit Ratings of BMO Life Assurance Company

JANUARY 09, 2025 01:05 PM (EST)

AM Best Affirms Credit Ratings of BMO Life Assurance Company

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FOR IMMEDIATE RELEASE

OLDWICK - JANUARY 09, 2025 01:05 PM (EST)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" (Excellent) of BMO Life Assurance Company (BMOLAC) (Toronto, Canada). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect BMOLAC's balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

BMOLAC underwrites a full suite of insurance products, including term life, whole life, universal life, critical illness, structured settlements and annuities. The company continues to offer new products and most recently completed its first international pension risk transfer transaction, which provides additional revenue diversification. The company distributes its products through a large network of sales agents across Canada and direct-to-consumer channels. BMOLAC is ultimately owned by Bank of Montreal.

BMOLAC's risk-adjusted capitalization is maintained at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), which is further supported by its favorable Life Insurance Capital Adequacy Test (LICAT) ratio. BMOLAC's favorable risk-adjusted capitalization has been driven primarily by strong operating results over the long term. AM Best has observed continued earnings growth and steady premiums for BMOLAC along with solid market positions in diversified product lines such as segregated funds, structured settlements, pension buyouts and life insurance. AM Best notes the company has not paid significant dividends to its parent company over the past three years; however, BMOLAC does plan for dividends to its parent while maintaining target levels of risk-adjusted capital.

Partially offsetting these positive rating factors is the continued competition BMOLAC faces from larger insurance organizations to increase its market share in Canada's mature and concentrated marketplace, as well as managing a book of business with long duration and significantly increased longevity risk exposure. AM Best notes that the company has successfully managed these challenges by steadily increasing its market share across various products and extending asset duration through diverse strategies.

This press release relates to Credit Ratings that have been published on AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.