Fitch Inc.'s Chicago ratings office affirmed the "AA" insurer financial strength ratings Thursday for Guardian Life Insurance Co. of America and its wholly owned subsidiary, Guardian Insurance and Annuity Co. Inc., with a stable outlook.
The affirmation reflects Guardian's strong balance sheet fundamentals, solid competitive positioning in the individual life market, and moderate earnings profile, Fitch said. The ratings agency noted that Guardian had reduced investment risk and increased income by trimming and hedging its equity exposure and investing in commercial mortgages and private placements.
Guardian's individual life business is supported by a high-quality, productive career agency distribution channel that offers value-added products. However, sales fell last year due in part to management's decision not to compete in the universal life secondary guarantee market. Though this decision was prudent, Fitch said, it expects Guardian's individual life insurance sales to be under pressure from market competition.
