AM Best Affirms Credit Ratings of Guardian Life Insurance Company of America and Its Subsidiaries
24 Julio 2024 - 4:35PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A++
(Superior) and the Long-Term Issuer Credit Ratings of “aa+”
(Superior) of Guardian Life Insurance Company of America (Guardian
Life) (New York, NY) and its core subsidiaries, Guardian Insurance
& Annuity Company, Inc. (GIAC) (Wilmington, DE) and Berkshire
Life Insurance Company of America (Pittsfield, MA) (together
referred to as Guardian). Concurrently, AM Best has affirmed the
Long-Term Issue Credit Ratings (Long-Term IRs) of “aa-” (Superior)
of Guardian Life’s surplus notes, and the Long-Term IRs of “aa+”
(Superior) of Guardian Life Global Funding’s medium-term notes that
are backed by funding agreements issued by Guardian Life. The
outlook of these Credit Ratings (ratings) is stable. (See below for
a detailed listing of the Long-Term IRs.)
The ratings reflect Guardian’s balance sheet strength, which AM
Best assesses as strongest, as well as its strong operating
performance, favorable business profile and very strong enterprise
risk management (ERM).
The rating affirmations reflect a continuation of Guardian’s
favorable overall balance sheet strength metrics, underpinned by
its risk-adjusted capitalization assessed at the strongest level,
as measured by Best’s Capital Adequacy Ratio (BCAR). Despite its
mutual company structure, Guardian Life has favorable financial
flexibility with a diverse source of additional capital and
liquidity, which includes Federal Home Loan Bank borrowings, and a
bank line of credit that has not been drawn but is available if
needed. The group does not utilize onshore captives and no entity
adopts any permitted accounting practice by their state regulators.
Guardian has generated favorable net cash flows for the past five
years, and it has modest financial and operating leverages, as well
as interest coverage that remains well within tolerance for its
rating levels. Earnings are diversified across Guardian’s multiple
product offerings, which are augmented by some fee-based
businesses, positive premium trends and new sources of
distribution. In particular, GIAC has significantly enhanced
individual annuity sales in recent years, supported by strategic
reinsurance relationships, which has the potential to drive further
increases to investment spread income, invested assets and
available capital.
Partially offsetting these positive rating factors is the
potential for higher interest rate exposure should the company’s
reserve profile continue to shift toward annuities. As ceded
volumes increase over time, reinsurer counterparty credit risk
analysis during Guardian’s financial planning, monitoring and
stress testing processes under the company’s ERM framework will
gain even more importance. AM Best will monitor Guardian’s periodic
credit reviews of their reinsurers, focusing on, among other
things, financial capacity, stability, trends and commitment to the
reinsurance business. Guardian maintains a strong market position
in individual life insurance as the industry's fourth-largest
writer of participating whole life, which in AM Best’s view
mitigates product risk. However, the group has expanded its product
footprint into other markets, and the organization faces ongoing
competition from mutual and stock companies in the highly
competitive U.S. life/annuity market.
The following Long-Term IRs have been affirmed with stable
outlooks:
Guardian Life Insurance Company of America— -- “aa-” (Superior)
on $400 million 7.375% surplus notes, due 2039 -- “aa-” (Superior)
on $450 million 4.875% surplus notes, due 2064 -- “aa-” (Superior)
on $300 million 3.700% surplus notes, due 2070 -- “aa-” (Superior)
on $350 million 4.850% surplus notes, due 2077
Guardian Life Global Funding – “aa+” (Superior) program rating
-- “aa+” (Superior) on all outstanding notes issued under the
program
This press release relates to Credit Ratings that have been
published on AM Best’s 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 AM Best’s
Recent Rating Activity web page. For additional
information regarding the use and limitations of Credit Rating
opinions, please view Guide to Best's Credit Ratings.
For information on the proper use of Best’s Credit Ratings, Best’s
Performance Assessments, Best’s Preliminary Credit Assessments and
AM Best press releases, please view Guide to Proper Use of
Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Stratos Laskarides Senior Financial Analyst +1
908 882 1995 stratos.laskarides@ambest.com
Michael Porcelli Senior Director +1 908 882
2250 michael.porcelli@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com