A.M. Best Affirms Ratings of Guardian Life of the Caribbean Limited and Guardian General Insurance Limited

OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of Guardian Life of the Caribbean Limited (GLOC). A.M. Best also has affirmed the FSR of A- (Excellent) and ICR of “a-” of Guardian General Insurance Limited (GGIL). The outlook for all ratings is negative. Both Guardian Life and Guardian General are insurance operating subsidiaries of the publicly traded holding company, Guardian Holdings Limited (GHL), which is listed on the Trinidad and Tobago and Jamaica exchanges. All companies are domiciled in Port of Spain, Trinidad.

The ratings reflect GHL’s improved consolidated balance sheet strength, which is due to a modest decrease in total debt and lower intangibles following the write-off of goodwill related to its European property/casualty operations. Nevertheless, A.M. Best’s continuation of its negative outlook reflects concern over the remaining level of leverage and other intangibles relative to GHL’s total equity. In addition, GHL’s exposure to Jamaica through its life insurance subsidiary, although representing only 10% of assets, remains an ongoing concern. These issues continue to impact the ratings of GLOC and GGIL, which represent the core insurance entities within GHL, despite their consistent profitability and contribution to GHL.

Additionally, GHL’s property/casualty business, which operates in several Caribbean territories, has been impacted by soft pricing, creating a challenge for its top line growth. Further impacting GHL’s balance sheet is the negative impact of currency risk as evidenced by the steep depreciation of the U.K. pound sterling and Jamaican dollar.

The ratings of GLOC continue to acknowledge its strategic position within the GHL group, its strong competitive advantage in the Caribbean markets, consistently positive gains from operations and its more than adequate level of risk-adjusted capitalization. Partially offsetting these factors are the impact of GHL’s leveraged balance sheet exposure, its evolving business profile and limited new business growth opportunities in the Trinidad and Tobago markets.

The ratings of GGIL recognize its leading regional market presence, historically profitable operating performance, adequate capitalization and the support and commitment of GHL. GGIL is the largest property/casualty writer in the Caribbean with a major presence in Trinidad and several other markets in the region. Partially offsetting these strengths is the increased frequency of catastrophic events in the region, the company’s reliance on reinsurance to protect its earnings and surplus and the increasingly competitive regional markets in which GGIL operates.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co. Analysts Ricardo Longchallon—P/C, 908-439-2200,        ext. 5676 [email protected] or Eva        Sverdlova—L/H, 908-439-2200, ext. 5733 [email protected] or Public        Relations Rachelle Morrow, 908-439-2200, ext. 5378 [email protected] or Jim        Peavy, 908-439-2200, ext. 5644 [email protected]