A.M. Best Affirms Ratings of BMO Reinsurance Limited
OLDWICK, N.J. -- August 28, 2013
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and
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. Higher premium volumes have been recorded in recent periods,
driven by diversification in its business mix to include both life and
A.M. Best notes that the company faces potential challenges associated with
strengthening distribution channels and new product acceptance as it looks to
further expand its business profile. Additionally, volatility in economic
conditions in Europe could impact BMO Re’s ability to retrocede assumed risks
to its European counterparties. BMO Re is exposed to potential earnings
volatility from its assumed property/casualty risk; however, A.M. Best
anticipates a lesser degree of volatility compared to previous years.
BMO Re is considered well positioned at its current rating level. Positive
rating actions are unlikely in the near or intermediate term. Factors that may
cause negative rating actions include a significant decline in the company’s
capitalization and/or business outlook, a decline in its operating performance
and a change in the regulatory environment, which impacts its business model,
and/or any negative rating actions at BMO.
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
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.
Anthony McSwieney, 908-439-2200, ext. 5715
Senior Financial Analyst
Rosemarie Mirabella, CPA, 908-439-2200, ext.5892
Managing Senior Financial Analyst
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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