OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Guarantee Trust Life Insurance Company (Guarantee Trust Life) (Glenview, IL).
The Credit Ratings (ratings) reflect Guarantee Trust Life’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The positive outlooks reflect Guarantee Trust Life’s enhanced financial flexibility and the company’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The level of risk-adjusted capitalization has improved as earnings have been accretive to capital, and growth in capital and surplus has outpaced the growth in net premiums written.
Guarantee Trust Life has experienced a long-term trend of favorable operating performance, which resulted from generally increasing pre-tax net operating gains driven by underwriting profitability in its core hospital indemnity and cancer segments, as well as growing sizable net investment income. Additionally, the company has reported strong return metrics with a five-year return on equity of 15.9% and a five-year return on revenue of 7.5%.
Partially offsetting factors include Guarantee Trust Life’s premium concentration in hospital indemnity products as more than one-third of net premium is derived from these products, as well as the highly competitive supplemental accident and health, and life insurance markets where it operates.
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