OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Credit Ratings (ratings) of Blue Cross Life Insurance Company of Canada (Blue Cross Life) (headquartered in Moncton, New Brunswick, Canada) remain unchanged following its announcement of an alliance with the Canassurance Hospital Service Association (Canassurance), which will become effective Jan. 2, 2020. This transaction is subject to customary regulatory approvals and AM Best expects the near-term impact on earnings and capital to be modest.
Canassurance, headquartered in Montreal, Quebec, markets individual health and travel insurance in the provinces of Quebec and Ontario. Canassurrance will contribute capital to Blue Cross Life with the net effect of increasing risk-adjusted capitalization. Once the transaction is complete, Canassurance will own approximately a 14% stake in Blue Cross Life, and will transition its existing block of life and disability lines of business within the next two years.
The transaction allows Blue Cross Life to expand its products for individual life and disability into the Ontario and Quebec markets, in addition to British Columbia from an alliance formed with Pacific Blue Cross earlier this year. While the alliance with Canassurance gives Blue Cross Life a truly national footprint, AM Best notes Blue Cross Life will continue to be a niche provider of life and disability benefits in Canada. The business model of Blue Cross Life remains unchanged as a manufacturer of life and accident and sickness insurance products, which are distributed by its owners.
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