AM Best Revises Outlooks to Stable for GBU Financial Life

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of GBU Financial Life (GBU) (Pittsburgh, PA).

These Credit Ratings (ratings) reflect GBU’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

AM Best notes GBU’s expansion in its operating jurisdictions, the lines of business it writes and its overall position in the fraternal market. The company also utilizes conservative reserving practices and has taken actions to improve its risk-based capitalization, which has decreased in recent periods. This includes GBU’s successful execution of a third-party annuity reinsurance treaty for in-force policies. This arrangement is expected to stabilize GBU’s strong overall balance sheet assessment and position the company for growth. Additional reinsurance on new sales is expected to further support profitable premium growth. The company’s reported net premiums written of approximately $183 million in the first quarter of 2025, and its balance sheet strength is expected to remain supportive of similar strategic growth plans going forward. Partially offsetting some of the positive rating factors are GBU’s increased reinsurance dependence and some expected operating performance volatility.

GBU utilizes a number of external investment managers to provide further expertise. This is done through management of a more diversified invested asset portfolio, which has supported strong investment income and driven favorable annuity crediting spreads and overall operating earnings over the last five years, despite the new business strain. The company has steadily increased its allocation to real estate investments, including private commercial and public structured security exposures that present some concentration risk.

AM Best will continue to monitor the impacts of the reinsurance treaty on the company's capitalization and operating performance, as GBU continues to execute its business profile expansion plans, along with the nature of GBU’s retained and ceded assets.

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