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A.M. Best Affirms Ratings of Guardian Life Insurance Company of America and its SubsidiariesOLDWICK, N.J. --(Business Wire)-- A.M. Best has affirmed the financial strength rating (FSR) of A++ (Superior) and 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 debt ratings of "aa-" on Guardian Life's existing surplus notes. Additionally, A.M. Best has affirmed the FSR of A (Excellent) and ICRs of "a" of Family Service Life Insurance Company, Sentinel American Life Insurance Company (both domiciled in Texas) and Park Avenue Life Insurance Company (Wilmington, DE). A.M. Best has also affirmed the FSR of A (Excellent) and ICRs of "a+" of Premier Access Insurance Company (PAIC), Access Dental Plan (ADP) (both domiciled in Sacramento, CA (News - Alert)) and First Commonwealth Insurance Company (Chicago, IL). The outlook for all ratings is stable. (See below for a detailed listing of the debt ratings.) The ratings of Guardian reflect its established market positions in its core product lines, its sizable and mature participating ordinary life insurance business and favorable operating performance. Guardian's core business segments - individual life, individual disability and group benefits - continue to generate steady operating earnings and cash flows despite the low interest rate environment. Along with its superior risk-adjusted capital position, strong balance sheet and relatively conservative investment portfolio, A.M. Best notes that, as a mutual company, Guardian has an added measure of financial lexibility through the management of its policyholder dividend scale. The organization continues to invest in branding, product innovation, technology and distribution. Additionally, Guardian has made strategic acquisitions in recent years, including the August 2014 purchase of PAIC and ADP that has expanded its established presence in the dental market by adding employer groups and broadening its provider network. A.M. Best has observed a decline in Guardian's participating whole life sales year-to-date 2014 as the individual life insurance arena remains highly saturated with many companies competing for the same affluent market customers. To a lesser extent, sales have also declined in its individual disability and group benefits segments. However, the dip in sales is offset by increasing premiums due to favorable persistency and selective implementation of rate increases. Guardian experienced a considerable increase in sales in the majority of its core business lines during 2013. Moreover, A.M. Best believes Guardian will need to grow its 401(k) business to achieve critical mass and contribute meaningfully to its consolidated results. A.M. Best believes a positive rating action for Guardian is unlikely to occur in the near to medium term. A negative rating action could occur if Guardian were to materially shift its mix of business away from its core profitable ordinary life insurance niche or if operating results were to deteriorate below A.M. Best expectations. The following debt 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 The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Key insurance criteria reports utilized:
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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