OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating (FSR) of A++ (Superior) and the issuer credit ratings (ICR) of “aa+” of The Guardian Life Insurance Company of America (Guardian Life) (headquartered in New York, NY) and its core subsidiaries, The Guardian Insurance & Annuity Company, Inc. (Wilmington, DE) and Berkshire Life Insurance Company of America (Pittsfield, MA) (together referred to as Guardian). Concurrently, A.M. Best has affirmed the issue rating of “aa-” on Guardian Life’s existing surplus notes.
Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the ICRs of “a” of Family Service Life Insurance Company, Sentinel American Life Insurance Company (both domiciled in Dallas, TX) and Park Avenue Life Insurance Company (Wilmington, DE). A.M. Best also has affirmed the FSR of A (Excellent) and the ICRs of “a+” of Premier Access Insurance Company (PAIC), Access Dental Plan (ADP) (both domiciled in Sacramento, CA) and First Commonwealth Insurance Company (Chicago, IL), the key dental subsidiaries of Guardian Life. The outlook for all ratings is stable.
The ratings of Guardian reflect its solid level of risk-adjusted capital and its leading market positions in its core ordinary life, individual disability and group insurance product lines. Guardian also maintains a sizable and mature participating ordinary life insurance business, which provides an added measure of financial flexibility through the management of its policyholder dividend scale. As a result, Guardian continues to generate steady operating earnings and cash flows in its ordinary life segment despite the low interest rate environment and also has experienced favorable operating results in its group insurance business due to good underwriting results and effective cost management. Additionally, the group continues to invest in product innovation, technology and distribution, which has led to steady premium growth in recent periods. The ratings also acknowledge Guardian’s strong risk management framework.
A.M. Best has noted a decline in Guardian’s participating whole life sales in recent periods as the individual life insurance market remains highly competitive. However, sales have increased in Guardian’s individual disability and group benefits segments after declining in 2014. A.M. Best notes that overall premium growth continues to increase steadily in Guardian’s core business lines due to favorable persistency and selective implementation of rate increases. While Guardian has experienced operating losses in its 401(k) business in recent periods, the company is focused on achieving critical mass in this line of business, which will be needed in order for this segment to contribute meaningfully to its consolidated results.
A.M. Best has concurrently withdrawn the ratings of Family Service Life Insurance Company, Sentinel American Life Insurance Company and Park Avenue Life Insurance Company at Guardian’s request.
The following issue ratings have been affirmed:
The Guardian Life Insurance Company of America—
-- “aa-” on $400 million 7.375% surplus notes due 2039
-- “aa-” on $450 million 4.875% surplus notes due 2064
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.
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