CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - DECEMBER 03, 2003 12:00 AM (EST)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of Guardian Life of the Caribbean Limited (Guardian Life) (Trinidad) with a stable rating outlook.
The rating reflects Guardian Life's role as a core operation within the Guardian Holdings Limited (GHL) group, its consistent profitability and conservative reserving practices. The rating also reflects Guardian Life's strong brand name in local markets and its growth opportunities within the group insurance segment. Offsetting these strengths is the competitive nature of the Trinidad insurance market, continued integration challenges associated with acquisitions and the high level, albeit reduced, of financial leverage at GHL.
Guardian Life's core business segments have generated consistent earnings due to favorable mortality, persistency and investment performance, and this has enabled the company to remain well capitalized. With over 150 years of history in a number of Caribbean markets, Guardian Life has established a strong brand name in the markets in which it operates. Furthermore, A.M. Best believes that Guardian Life is well positioned to increase its market share within the group insurance segment given its ability to cross sell group life and group pension plans to its block of group health business, which it inherited from its property/casualty affiliates.
In A.M. Best's opinion, Guardian Life faces some challenges to grow its individual life business due to the mature and competitive market environment; however, these challenges are somewhat mitigated by the company's very productive career agency sales force. Although capital restructuring has reduced the level of financial leverage at GHL and interest coverage ratios have improved, concerns still remain regarding the potential imposition of debt servicing requirements on Guardian Life, particularly if future growth is achieved through mergers and acquisitions.
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source.