A.M. Best Affirms A+ Ratings of The Great-West Life Assurance Co., London Life Insurance Co.

OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 9, 1999--A.M. Best Co. today affirmed the A++ (Superior) ratings of The Great-West Life Assurance Co., (GWL) Winnipeg, Manitoba, and London Life Insurance Co., London, Ontario.

This rating action is based on the very strong consolidated operating performance of the group, its leadership position in the Canadian market, its earnings diversification, and large and diversified distribution sources.

A.M. Best believes GWL's acquisition of London Life remains a good strategic fit, creating an organization with increased distribution, earnings diversification and a market leadership position in individual life insurance, group business and retirement savings in Canada. The combined organization is Canada's largest insurance organization in terms of Canadian assets, premium income and retail advice and service distribution, with significant cost advantages and a demonstrated ability to grow profitably in a highly saturated and competitive market. GWL employs its capital effectively and generates favorable shareholder returns. Although the four large Canadian mutual life insurance companies are set to demutualize and with greater financial flexibility may become stronger competitors, A.M. Best believes GWL's competitive position will remain strong, based on its distribution advantages and strong operating history as a well-managed stock life insurance organization.

Through its major U. S. subsidiary, Great-West Life & Annuity Insurance Co., GWL is a significant player in the employee benefits market, with particular strength in the public and non-profit sector. Its U.S. health operations were expanded in 1998 with the acquisition of Anthem Health and Life Insurance Company which brings additional membership to the group and nearly $1 billion in premium equivalent income. Although Anthem continues to under-perform, A.M. Best expects its earnings profile to improve as additional cost savings emerge.

The rating also acknowledges the strength and support of the ultimate majority shareholder, Power Corporation of Canada, a diversified holding company with interests in life insurance, mutual funds, communications, broadcasting and a number of businesses in Europe. The Canadian financial services sector is Power Corp.'s major business line and greatest contributor to consolidated earnings. The capital position of GWL is considered strong, comprised primarily of common and preferred shares. Although the acquisition of London Life generated a substantial amount of goodwill, it did not result in a significant increase in financial leverage.

A.M. Best has affirmed the A++ (Superior) ratings Great-West Life & Annuity Insurance Co., Denver, and First Great-West Life & Annuity Insurance Co., Albany, N.Y. both wholly owned subsidiaries of GWL. These ratings reflect the companies' strategic position as the U. S. arms for the Canada-based companies, their favorable operating performance and solid capitalization.

In addition, A.M. Best affirmed the A+ (Superior) rating of London Life Reinsurance Co., Blue Bell, Pa. As a member of the London Reinsurance Group, London Life Reinsurance is strategically important, as it offers earnings growth and diversification and expanding positions in life, annuity and accident and health reinsurance to the group. As the only U.S. operation of the London Reinsurance Group, London Life Reinsurance is well positioned to achieve greater penetration into the life, annuity and health reinsurance markets. A.M. Best also affirmed the A (Excellent) ratings of London Life and Casualty Reinsurance Corp., St. Michael, Barbados, London Life and General Reinsurance Co. Ltd., Dublin, Ireland and Anthem Health and Life Insurance Company.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.