A.M. Best Affirms Ratings of RBC Life Insurance Company

  A.M. Best Affirms Ratings of RBC Life Insurance Company

Business Wire

OLDWICK, N.J. -- February 13, 2013

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and
issuer credit rating of “a” of RBC Life Insurance Company (RBC Life)
(Mississauga, Ontario). The outlook for both ratings is stable.

RBC Life’s ratings reflect its adequate risk-adjusted capitalization, increase
in net gains from operations, as well as the strong brand recognition of the
Royal Bank of Canada (RBC) [TSX and NYSE: RY] name in the Canadian market. RBC
Life operates as the Canadian life insurance operation of its parent, RBC
under RBC Insurance, a division of RBC.

RBC Life maintains a significant market position in Canada in the individual
living benefits and group long-term disability insurance markets. RBC Life
also has maintained a focus on organically growing its individual life segment
through enhanced product features on its term life insurance products.
Earnings for RBC Life improved in 2012 as morbidity in the individual and
group accident and sickness lines of business were more favorable than
previous years. A.M. Best expects RBC to continue to support RBC Life’s growth
initiatives, if needed, as it has demonstrated in the past.

Partially offsetting these positive rating factors are the challenges RBC Life
faces while positioning itself to increase market share in the Canadian
individual life insurance marketplace, as well as the continuing intense
competition in the group and individual accident and sickness markets. RBC
Life also has generated inconsistent results in its individual life line over
the last several years, which has been impacted by the new business costs
related to new sales growth and the continued low interest rate environment.
A.M. Best also notes that RBC Life maintains a modest position in the wealth
management market through its general account annuities and segregated funds.

A.M. Best believes RBC Life’s ratings are well positioned at the current level
for the near to medium term. Key factors that could result in negative rating
actions include a significant and sustained decline in RBC Life’s
risk-adjusted capitalization, large investment losses or operating performance
on the individual and group accident and sickness lines that does not meet
A.M. Best’s expectations over a sustained period.

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

Founded in 1899, 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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
Edward Kohlberg
Senior Financial Analyst
908-439-2200, ext. 5664
Raj Shah
Assistant Vice President
908-439-2200, ext. 5409
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
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