Fitch Ratings Places Business Men's Assurance On Rtg Watch Evol

Business Wire, April 30, 2002

Business Editors

CHICAGO--(BUSINESS WIRE)--April 30, 2002

Fitch Ratings has placed the 'AA-' insurer financial strength rating of Business Men's Assurance Company of America (BMA) on Rating Watch Evolving.

The rating action reflects this morning's announcement that BMA will be acquired by Greenville, SC-based Liberty Life Insurance Company (Liberty Life) in a deal valued at approximately $220 million. Liberty Life is the lead US insurance operation of Royal Bank of Canada. Fitch currently rates Royal Bank of Canada's long-term senior obligations 'AA'. BMA is the US life insurance operation of Italian insurance and financial services giant, Assicurazioni Generali S.p.A. (Generali). The transaction is expected to close by the end of August 2002 following the transfer of BMA's existing life reinsurance business to a stand-alone reinsurance company being formed by Generali.

The Rating Watch status primarily reflects uncertainty regarding BMA's risk-adjusted capital position immediately following the close of the transaction. The transfer of the reinsurance business out of BMA will have a significant effect on both the capital profile and the business risk profile of the organization. Fitch will meet with management in the near term to review financial projections for the combined companies, integration plans and BMA's position in the overall strategic plans of Royal Bank of Canada.

Kansas City, MO-based BMA is a mid-sized stock life insurance company with total assets of $2.7 billion and capital and surplus of $278 million at Dec. 31, 2001. Liberty Life sells life and health insurance primarily in the southeast region of the US. The company reported total assets of $1.3 billion and capital and surplus of $115 million at Dec. 31, 2001. Royal Bank of Canada reported total assets of $225.5 billion and shareholders' equity of $11.5 billion at Jan. 31, 2002.

Entity/Issue Type/Rating/Rating Watch

Business Men's Assurance Company of America

--Insurer financial strength 'AA-'/Evolving.