know about this AM Best withdraws credit ratings from Blue Cross Life Insurance Company of Canada
in complete details.
OLDWICK, New Jersey–(COMMERCIAL WIRE)–I am better has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Blue Cross Life Insurance Company of Canada (Blue Cross Life). Blue Cross Life is domiciled in Moncton, Canada. The outlook on these Credit Ratings (ratings) is negative. At the same time, AM Best withdrew these ratings as the company requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect the strength of Blue Cross Life’s balance sheet, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and adequate management of business risk.
The rating claims reflect Blue Cross Life’s role as a niche provider of life and accident and illness products to the Canadian insurance market, which has been augmented by the addition of two new distributors in 2021. In addition, there is a differentiated organizational structure, where Blue Cross Life is the manufacturer of life and accident and illness products, while its shareholders are responsible for distribution. Its unique model of responsibility incentivizes its distributors to write quality business, which has led to good profitability.
Partial mitigating factors include weak risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), compared to peers. AM Best notes that Blue Cross Life’s risk-adjusted capitalization is qualitatively enhanced by its model of responsibility and financial flexibility. Private loan assets that were managed by Bridging Finance, which have been in receivership, did not result in further amortizations in 2022 and achieved a significant recovery on investments.
The negative outlook reflects continued pressure on balance sheet strength as Blue Cross Life’s BCAR and the company await resolution of a portion of its private loan holdings that are in default.
This news release relates to credit ratings that have been posted on AM Best’s website. For full rating information related to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity Web page. For additional information on the use and limitations of credit rating opinions, see Best Credit Score Guide. For information on the proper use of Best’s Credit Ratings, Best’s Performance Reviews, Best’s Preliminary Credit Reviews, and AM Best’s press releases, see Guide to the proper use of Best ratings and evaluations.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.
Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.