AM 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. Concurrently, AM Best has withdrawn these Credit Ratings (ratings) as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect BMO Re’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.
BMO Re is an indirect wholly owned subsidiary of Bank of Montreal (BMO) that assumes creditor and life reinsurance business. Prior to 2020, BMO Re underwrote property catastrophe and specialty property and casualty business but made the decision to exit the space due to several years of fluctuating results. The ratings of BMO Re reflect its stable net income trends, strong return on equity and strong liquidity. In addition, BMO Re has maintained the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as low levels of credit risk within its investment portfolio, which is invested primarily in highly rated sovereign, supranational and corporate bonds.
While recognizing the strength of the ownership relationship with BMO, AM Best notes that volatility in Canada’s economy following the COVID-19 pandemic and the banking industry’s move to digital transactions, thereby losing face-to-face sales opportunities, will likely continue to impact the creditor life insurance market and BMO Re’s ability to maintain current premium levels. AM Best also notes that the company has remained highly profitable over the long term despite previous volatile property/casualty results and the ongoing global pandemic reflecting solid underwriting in the core creditor reinsurance business line.
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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. For more information, visit www.ambest.com.
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