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A.M. Best Revises Outlooks to Positive for SSQ Life Insurance Company, Inc.

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A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of a- of SSQ Life Insurance Company, Inc. (SSQ) (Quebec, Canada)

The ratings reflect SSQs balance sheet strength, which A.M. Best categorizes as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

SSQ is primarily involved in group insurance and holds significant market share within the Quebec province. The companys majority shareholder, Fonds de solidarit FTQ, the largest developmental capital network within Quebec, holds a 71% direct ownership stake and provided capital in 2012 to assist with SSQs acquisition of AXA Life of Canada. SSQ continues to prioritize expanding outside of Quebec with some success over the long-term.

The positive outlooks reflect SSQs improved risk-adjusted capitalization coupled with a trend of decreasing financial leverage due to significant capital growth and pay down of debt. The companys risk-adjusted capitalization, as measured by Bests Capital Adequacy Ratio (BCAR), has improved notably in the previous several years due to the growth in capital. In addition, the company reported a very favorable regulatory solvency ratio during 2018 under AMFs new capital regime CARLI (capital adequacy requirements for life insurers), which took effect in Quebec on Jan. 1, 2018.

SSQ also continues to produce strong operating performance year-over-year, often with low double-digit returns on equity. Despite some volatility in earnings by line, group insurance continues to generate favorable earnings on growing business volume. The companys investment and retirement division also has emerged as an earnings producer in the previous two years due to successful implementation of profitability enhancements.

A.M. Best believes that SSQ will continue to maintain or improve its overall balance sheet strength over time, but also will continue to have difficulty expanding outside its home province of Quebec due to intense competition from larger more established entities.

This press release relates to Credit Ratings that have been published on A.M. Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and A.M. Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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