NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the 'AA+' Insurer Financial Strength (IFS) ratings of Guardian Life Insurance Company of America and its wholly owned subsidiary, Guardian Insurance & Annuity Company, Inc. (collectively referred to as Guardian). The Rating Outlook is Stable.
Today's rating action follows Fitch's updated review of Guardian's capitalization, operating results, liquidity and financial flexibility. Guardian's very strong ratings continue to reflect the company's exceptionally strong balance sheet fundamentals, stable earnings performance, and favourable operating profile.
Guardian's exceptionally strong balance sheet fundamentals reflect the company's strong statutory capitalization, low risk liability profile and limited investment exposure to structured finance and below investment grade securities. Guardian's risk-based capital ratio was 480% as of Sept. 30, 2010, and it is expected to end the year at approximately the same level. The company's quality of capital is strong, with little dependence on reserve financing arrangements or debt. The company has $400 million of surplus notes outstanding, which accounts for 8% of total adjusted capital (TAC) at the end of the third quarter of 2010 and compares to a Fitch maximum guideline of 15%. Operating leverage is low relative to peers and the industry, and the company's pension obligation is fully funded.
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