Best Affirms Bank of Montreal Insurance (Barbados) ‘A’ Ratings

April 21, 2006

A.M. Best Co. announced that it has affirmed the financial strength rating of “A” (Excellent) and the issuer credit rating of “a” of Bank of Montreal Insurance (Barbados) Limited with a stable outlook.

“These ratings reflect Bank of Montreal Insurance’s strong and consistent operating performance, excellent capitalization and favorable liquidity position,” said Best. “Its financial strength is driven by above average returns owing to disciplined underwriting and adherence to sound investment practices, resulting in earnings and surplus growth.”

Best also noted that the Bank “maintains a strong balance sheet with superior underwriting leverage and liquidity measures, complemented by a conservative investment portfolio. In addition, the company benefits from a global market presence and a broad product mix of credit, life, health and general insurance and reinsurance. Bank of Montreal Insurance also participates in various life and accident retrocession pools.”

However, Best indicated that the “challenging economic environment and competitive nature of its core life and disability reinsurance business,” should be considered as offsetting factors. In addition “the low interest rate environment and the highly competitive nature of the life reinsurance marketplace may pressure Bank of Montreal Insurance’s future earnings growth,” said the bulletin. It added, however, that “the company is well positioned to benefit from a stable market, and its strong operating performance will serve to further increase its financial strength.”

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