A.M. Best Affirms Ratings of Trustmark Group, Inc.; Assigns Ratings to Trustmark Life Insurance Company of New York

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings of “a-” of Trustmark Insurance Company and Trustmark Life Insurance Company (Trustmark Life) (both of Lake Forest, IL). Concurrently, A.M. Best has affirmed the ICR of “bbb-” of the holding company, Trustmark Group, Inc. (Trustmark) and the debt rating of “bb” of the trust preferred securities issued by Trustmark Finance Trust I. Additionally, A.M. Best has assigned an FSR of A- (Excellent) and ICR of “a-” to Trustmark’s new subsidiary, Trustmark Life Insurance Company of New York (Albany, NY). The outlook for all ratings is stable.

The rating affirmations reflect the organization’s favorable operating results, low leverage and overall diversity of insurance offerings. Additionally, Trustmark has shown good premium growth and profitability in its core voluntary benefits segment, particularly in a challenging economic environment. While the organization incurred some realized capital losses during 2009, its investment portfolio continues to perform relatively well. After years of reporting lower revenue as an organization, A.M. Best believes Trustmark is better positioned to have its core businesses’ revenue growth outpace revenue running off from non-core or divested businesses.

While Trustmark as a whole is much less reliant on group major medical business for revenue and operating earnings than in the past, A.M. Best is concerned that the proposed federal health care reform would likely have a negative impact on Trustmark Life’s future operating performance. The group major medical market has always been volatile and has become increasingly challenging on a state and national regulatory basis. In recent years, Trustmark has made a conscious effort to grow its non-insurance risk segments, such as third party administrative services through its CoreSource division and consumer health advice services. These are becoming a more important part of the organization and bring added diversity.

In early 2009, Trustmark licensed Trustmark Life Insurance Company of New York, which will begin marketing a portfolio of worksite products in early 2010. The company’s marketing and investment strategies will be similar to those of its sister company, Trustmark Insurance Company. Trustmark Life Insurance Company of New York has more than adequate risk-adjusted capital to support its projected sales in the near to medium term.

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