A.M. Best Affirms Ratings of BMO Reinsurance Limited

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a+” of BMO Reinsurance Limited (BMO Re) (Barbados). The outlook for both ratings is stable.

BMO Re is an indirect wholly owned subsidiary of Bank of Montreal (BMO) (Toronto, Ontario) and is a reinsurer of life, property/casualty and disability risks. The ratings of BMO Re reflect its stable net income trends, favorable risk-adjusted capitalization and strong liquidity in its investment portfolio. BMO Re continues to maintain strong risk-adjusted capitalization levels, as well as low levels of credit risk within its investment portfolio, which is primarily invested in highly-rated sovereigns, supranationals and corporate bonds.

Volatility in economic conditions in Canada could impact BMO Re’s ability to grow premiums and ceding assumed risks to its European counterparties. BMO Re continues to have exposure to potential earnings volatility from its assumed property/casualty risk; however, A.M. Best notes that this risk has a lesser degree of volatility compared with previous years.

Positive rating actions are unlikely in the near or intermediate term. Factors that could cause negative rating actions include a significant decline in the company's capitalization or business outlook, decline in operating performance that impacts its business model or negative rating actions at Bank of Montreal. Furthermore, the pending federal budget to be introduced in the Canadian Parliament may reduce certain benefits on reinsurance and negatively impact BMO Re's business profile.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Evaluating Non-Insurance Ultimate Parents
• Understanding Universal BCAR
• Risk Management and the Rating Process for Insurance Companies
• Equity Credit for Hybrid Securities

This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Company
Anthony McSwieney, 908-439-2200, ext. 5715
Senior Financial Analyst
[email protected]
or
William Pargeans, 908-439-2200, ext. 5359
Assistant Vice President
[email protected]
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company

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