Fitch Affirms Boston Mutual Life Insurance Company At `A'

Business Wire, Jan 22, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 22, 2001

Fitch affirms Boston Mutual Life Insurance Company's (Boston Mutual) insurer financial strength rating at 'A'. The Rating Outlook is Stable.

The rating action reflects the company's strong presence in the worksite marketing segment, conservative management philosophy, improving profitability, and high quality, well-managed investment portfolio. Partially offsetting these positives are the challenges in generating premium growth and slow surplus development due to lower profitability.

Boston Mutual (BML) sells group and individual life and accident and health insurance products through worksite marketing, general and independent agents and brokers. BML targets the middle and lower income markets, considering them to be underserved and therefore less competitive. The company focuses on niche markets such as workplace marketing, military personnel, federal employees, the Hispanic market, municipalities and labor unions. The company is currently developing its senior citizens' product portfolio.

Fitch considers the quality and consistent performance of Boston Mutual's asset portfolio as a primary strength of the company. As of Sept. 30, 2000, 100% of the company's bond portfolio was investment grade and publicly traded. While the company's allocation to mortgage loans is well above the industry average, conservative underwriting guidelines and diligence has led to enhanced portfolio yield and quality with very low delinquency rates.

Boston Mutual's capital level is considered adequate for its liability profile. The company's NAIC risk based capital ratio was 223% of the company action level at year-end 1999, and the company's target is to improve this ratio going forward. Fitch anticipates modest growth in total adjusted surplus over the next few years.

Boston Mutual is licensed in 49 states, D.C., Puerto Rico and U.S. military bases in Europe. The company reported $544 million in total admitted assets and $59.6 million in adjusted surplus at Sept. 30, 2000.