BMO Life Assurance has maintained the Financial Strength Rating of A (Excellent) issued by rating firm A.M. Best, coupled with a stable outlook. The A.M. Best analysts explain that their decision reflects the insurer’s balance sheet strength, which they categorize as very strong.
They were also impressed with BMO’s strong operating performance, neutral business profile and appropriate enterprise risk management. The company achieved a five-year average return on equity of more than 13%.
BMO Life serves numerous markets: term life, whole life, universal life, living benefits, structured settlements and annuities, among others. A.M. Best analysts mention BMO’s substantial growth in pension risk transfer business, which offers additional risk diversification. Its large distribution networks are another asset.
Challenges
What obstacles does insurance BMO Life face? Continued competition in the Canadian life and health insurance market was the key factor the A.M. Best analysts identified, mainly from larger organizations. Increasing market share is also more complicated in this mature and concentrated market. Asset liability matching on long-duration business in a low interest rate environment is another challenge, A.M. Best analysts conclude.
