A.M. Best Affirms Rating of Canada Life.Business & Insurance Editors OLDWICK, N.J.--(BUSINESS WIRE)--June 5, 2000 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the A+ (Superior) rating of the Canada Life Assurance Co., Toronto. Also affirmed are the A+ ratings of its strategic subsidiaries, Canada Life Insurance Company of America, Lansing, Mich. and Canada Life Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Ardsley, N.Y. The rating is based on the consolidated financial strength and operating performance of the company and its subsidiaries. It reflects the excellent market positions of the company's product segments and business units, its strong capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and geographically diverse product lines provided by it operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , United Kingdom and Ireland. Canada Life's market position has benefited from the 1999 acquisition of the majority of Crown Life Insurance Co.'s diversified diversified (di·verˑ·s businesses, which fit well with Canada Life's operations in Canada and the United States The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. . Also beneficial is Canada Life's recent demutualization Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Notes: This means mutual/life insurance companies convert from policyholder companies to stock companies. that provides increased financial flexibility thus enabling it to better achieve its growth objectives. Offsetting these strengths are Canada Life's need to improve the profitability of operations in the U.K., shift its U.S. focus to protection business and, in light of continued industry consolidation, sustain its market positions in Canada. It will be difficult for the company to improve its financial performance in the United Kingdom, where it must contend with larger competitors. Nevertheless, A.M. Best believes that the company's solid local U.K. management team and distribution relationships with Independent Financial Advisors will help it overcome these challenges. A.M. Best believes that Canada Life's U.S. operation will have a difficult time transitioning its focus to primarily protection business, as this segment needs greater scale. In addition, while the acquisition of Crown Life's businesses has improved Canada Life's U.S. presence, lacking adequate size and economies of scale present obstacles in achieving critical mass in this market. In Canada, the company faces difficulty increasing individual life sales due to the maturity of the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. individual life market. In response, Canada Life has recognized the independence of its distributors and adapted to a variable-cost distribution system. The company also emphasizes alternative distribution channels to enhance its distribution capacity in Canada through brokers, financial institutions and strategic alliances. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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