AM Best Affirms Credit Ratings of Standard Insurance Group Members and Pacific Guardian Life Insurance Company, Limited

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” (Excellent) of Standard Insurance Company (Portland, OR) and its affiliate, The Standard Life Insurance Company of New York (White Plains, NY), together referred to as Standard Insurance Group (The Standard). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) of StanCorp Financial Group, Inc. (StanCorp) (Portland, OR), the intermediate holding company of The Standard. In addition, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Pacific Guardian Life Insurance Company, Limited (Pacific Guardian) (Honolulu, HI). The outlook of these Credit Ratings (ratings) is stable.

The ratings of Standard Insurance Group reflect its balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). Additional considerations for the rating include its strategic role to the parent company, Meiji Yasuda Life Insurance Company (Meiji Yasuda).

The Standard’s strong balance sheet strength assessment level is supported by strong risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as positive liquidity and financial flexibility. In recent years, largely due to dividends to StanCorp and upstream to Meiji Yasuda, the company’s BCAR had been on the high end of an adequate assessment level before firmly being assessed as strong for year-end 2024. Consistent and diversified premium growth have helped The Standard support a strong operating performance assessment. The group maintains a conservative investment portfolio with a large allocation to mortgages and fixed income securities returning increased investment income annually. The Standard’s favorable business profile is supported by a top 10 market share in group long and short-term disability, group life and individual disability products. The recent acquisitions of the life and disability business of Elevance Health, Inc. and American Heritage Life Insurance Company have increased the group’s distribution, product offerings and geographic reach. The Standard’s ERM programs are comprehensive and well-developed as the organization maintains good governance structure and appropriate controls.

Pacific Guardian’s ratings reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The strategic importance of Pacific Guardian to its parent company, Meiji Yasuda, was also considered as part of the rating.

Pacific Guardian’s very strong balance sheet strength assessment is supported by very strong risk-adjusted capital, as measured by BCAR. These BCAR scores have declined in recent years from higher measures primarily from the increased asset and interest risk associated with new multi-year guaranteed annuity (MYGA) production. Liquidity measures have been consistently favorable based on the high allocation to a fixed-income portfolio and a new partnership with the Federal Home Loan Bank of Des Moines adds an additional liquidity source. The company’s investment portfolio has a high allocation to commercial mortgage loans in Hawaii and the Pacific Northwest, which are considered less liquid investments. However, Pacific Guardian reports very low delinquency rates and favorable performance annually. Since diversifying its product offerings to include MYGA, Pacific Guardian has reported positive premium growth and expanded geographic reach.

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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