(January 22 – 16:50 ET) – A.M. Best Co. has affirmed the A- (Excellent) rating of Assumption Mutual Life Insurance Co., of Moncton, N.B.

Best says the rating is based on the company’s significant sales growth, its strong market niche in the Francophone population of New Brunswick and Eastern Canada and its improved capitalization.

The ratings agency says substantial sales growth of individual life, credit life, group insurance and financial services has been achieved as a result of the company’s diversified distribution network, which effectively responds to the needs of its customers. The company’s capitalization is more than adequate to support its current insurance and investment risk.

According to Best, risk-adjusted capitalization has been enhanced by the company’s quality bond portfolio, improved results from its real estate subsidiaries and a well-performing mortgage portfolio. However, as a result of the company’s mutual life insurance status and low level of surplus in absolute terms, its financial flexibility remains limited.

Best says Assumption’s high-cost infrastructure remains a challenge, but the company is committed to reducing unit costs. This is evident in its use of diversified distribution channels, reduced levels of investment in its real estate subsidiaries, focus on financial management and improvements in cash flow and lapse management.

Assumption has recently committed to making a significant investment to upgrade and improve its technology. This investment may modestly decrease profitability over the next several years, but it is expected to significantly improve customer service and communications, accelerate sales growth and enhance the company’s e-commerce strategy.
-IE Staff