AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) of Guarantee Trust Life Insurance Company (Guarantee Trust Life) (Glenview, IL). In addition, AM Best has revised the outlook of these Credit Ratings (ratings) to stable from positive.

The ratings reflect Guarantee Trust Life’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

The rating upgrades reflect Guarantee Trust Life’s maintenance of balance sheet strength metrics, including its financial flexibility, capital expansion and the company’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The level of risk-adjusted capitalization has improved as earnings have been accretive to capital, and growth in capital has also outpaced the growth in net premiums written.

Guarantee Trust Life has witnessed a long-term trend of favorable operating performance driven by substantial pre-tax net operating gains, generally driven by improving levels of net investment income and underwriting profitability in its hospital indemnity and home health care and short-term nursing and home care segments. Additionally, the company has reported strong return metrics with an average five-year return on equity of approximately 14% and an approximate five-year return on revenue of over 7%. Premium levels have generally increased in the single-digit percentage levels year over year in recent periods.

Partially offsetting factors include Guarantee Trust Life’s premium concentration in hospital indemnity products, as more than one-third of net premium is derived from these products, as well as the highly competitive supplemental accident and health and life insurance markets where the company operates.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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