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Duff & Phelps Reaffirms 'AA' Rating of Business Men's Assurance Company of America

Strategic Insights

— 1 min read

Duff & Phelps Credit Rating Co. (DCR) has reaffirmed the 'AA' (Double-A) claims paying ability rating of Business Men's Assurance Company of America (BMA), citing the company's strong capitalization and liquidity, excellent asset quality, improving profitability, and stable market position in its life reinsurance business. The rating also takes into account the support of BMA's ultimate parent, Italian insurer Assicurazioni Generali, S.p.A. (Generali). BMA's modest returns and lack of significant market presence in its direct insurance markets were also considered in the rating.

Key Takeaways:

  • DCR has reaffirmed the 'AA' claims paying ability rating of Business Men's Assurance Company of America (BMA) due to its strong capitalization and liquidity.
  • BMA's excellent asset quality, improving profitability, and stable market position in its life reinsurance business also contributed to the rating.
  • The company's ultimate parent, Assicurazioni Generali, S.p.A. (Generali), provides significant support to BMA.
  • BMA's modest returns and lack of significant market presence in its direct insurance markets were assessed as limiting factors in the rating.
  • Generali has provided reinsurance on BMA's annuity business, which has grown rapidly since 1995.
  • BMA operates in four categories: individual insurance, workplace, financial services, and reinsurance.
  • Management's focus is on growing the company's workplace and reinsurance operations.
  • BMA's operating earnings improved in the first half of 1998 compared to the same period in 1997, driven by better mortality experience and expense control.

Statistics:

  • Total assets of Business Men's Assurance Company of America (BMA): $2.5 billion at June 30, 1998.
  • Adjusted surplus of BMA at June 30, 1998: $259 million.
  • Capital enhancement program provided by Generali: $40 million, expected to be contributed by the fourth quarter of 1999.
  • Rank of Generali in terms of premiums written: among the top 25 in the world.

Sources:

  • Duff & Phelps Credit Rating Co.

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