AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Gulf Guaranty Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Gulf Guaranty Life Insurance Company (Gulf Guaranty Life) (Flowood, MS). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Gulf Guaranty Life’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The affirmation of the ratings and their removal from under review with developing implications reflect the sale of Gulf Guaranty Life’s former core group limited benefit medical business in the third quarter of 2023, with an effective date of Jan. 1, 2023. This sale significantly reduced net premium and overall risks, with the company’s level of capital now more than sufficient to support its remaining credit and final expense segments. Rapid premium growth combined with reduced profitability in the group limited benefit medical business had been a major factor pressuring Gulf Guaranty Life’s risk-adjusted capital in 2021 and 2022. After sharply dropping in 2021, both absolute and risk-adjusted capital levels improved substantially at year-end 2022 due to stronger earnings and various implemented capital enhancement initiatives. AM Best expects the company’s level of risk-adjusted capitalization to improve further in the third quarter and through year-end 2023 following the sale of the business segment.

Gulf Guaranty Life will focus on growing its credit insurance business, which has seen contraction in recent years.

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