Bank of Montreal has entered the life insurance market with the launch of BMO Life Insurance Company, a wholly owned subsidiary.

A federally regulated insurance company, BMO Life is now ready to commence marketing across Canada.

“BMO Life will conduct business using a totally new model for developing and distributing insurance products to the market,” said Gordon Henderson, president and CEO, BMO Life.

“BMO Life will design, distribute and underwrite its life products, but has engaged top tier industry partners to manage the required back office processes,” said Mr. Henderson. “This strategy not only dramatically reduces start-up costs but also gives BMO Life the capability to respond quickly to the market.”

“The entrance of Bank of Montreal into the life insurance business supports the bank’s objective to attract and retain customers who want us to look after more of their financial services needs,” said Mr. Henderson. “By offering insurance products that complement our current array of financial products and services, we can broaden and deepen the relationship Bank of Montreal has with its customers.”

Mr. Henderson said that customers have indicated they are willing to purchase life insurance from the bank and are looking for products that not only meet their personal needs but also overcome concerns about insurance products being overly complex.

“Our focus is to develop products that are easier to understand and easier to purchase. We will offer innovative products in both design and delivery from a financial institution that our customers know and trust,” said Mr. Henderson.

BMO Life’s inaugural product offerings are BMO Life DirectTerm, a simpler term life insurance product that features a plain language contract and an automated underwriting process enabling the majority of customers to get quotes and approval for coverage in minutes. Customers will be able to conveniently access DirectTerm through the Internet or call centre. DirectTerm is currently in pilot phase and will be launched nationally this spring.

The BMO Life Strategem Universal Life, which has been designed with the assistance of BMO Nesbitt Burns Financial Services and features clear policy language and competitive investment options — all tailored specifically for the high net worth market. Customers will receive sales and service advice exclusively through their BMO Nesbitt Burns licensed insurance advisor. Strategem will be launched nationally later this month.

Bank of Montreal is not new to the insurance business. It has a significant presence in the creditor insurance business offering a variety of third party insurance products to more than 900,000 customers.

In addition, BMO Nesbitt Burns offers life insurance from a number of leading insurance companies.

“Insurance is a profitable line of business for the bank,” said Mr. Henderson. “By offering new insurance products to customers, BMO Life will expand the bank’s opportunities to generate new profitable revenue.”

BMO Life’s partner suppliers are National Life Assurance Company of Canada, which will provide all administrative and information processing services. Sodema, a member of the Transcontinental Group, will provide telemarketing and call centre support. RGA Reinsurance, will assist BMO Life with the development of its underwriting platform.