AM Best


A.M. Best Affirms Credit Ratings of BMO Reinsurance Limited


CONTACTS:

Kevin Varvaro
Financial Analyst
+1 908 439 2200, ext. 5487
kevin.varvaro@ambest.com

William Pargeans
Director
+1 908 439 2200, ext. 5359
william.pargeans@ambest.com

Christopher Sharkey
Manager, Public Relations
(908) 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
(908) 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - APRIL 19, 2018 11:04 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of BMO Reinsurance Limited (BMO Re) (Barbados). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect BMO Re’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. BMO Re is an indirect wholly owned subsidiary of Bank of Montreal (BMO) and has four underwriting programs in place, including creditor and life reinsurance, property catastrophe and specialty property and casualty. The ratings of BMO Re reflect its stable net income trends, strong return on equity and strong liquidity. In addition, BMO Re continues to maintain very strong levels of risk-adjusted capitalization, as well as low levels of credit risk within its investment portfolio, which is primarily invested in highly rated sovereigns, supranationals and corporate bonds.

While recognizing the strength of the ownership relationship with BMO, A.M. Best notes that volatility in Canada’s economy, along with the banking industry’s move to more digital transactions, losing face-to-face sales opportunities, could impact the creditor life insurance market and BMO Re’s ability to grow premium. Moreover, BMO Re continues to have exposure to potential earnings volatility from its assumed property/casualty risk, which saw unfavorable results in the fourth quarter of 2017 due to an active hurricane season. A.M. Best notes that the company has risk limits in place to mitigate tail risk and remained highly profitable overall in 2017, reflecting solid results in the core creditor reinsurance business line.

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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AMB# Company Name
056229 BMO Reinsurance Limited
030194 Bank of Montreal