AM Best Affirms Credit Ratings of Meiji Yasuda Life Insurance Company’s U.S. Subsidiaries: Standard Insurance Group and Pacific Guardian Life Insurance Company, Limited

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) 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). Additionally, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) of StanCorp Financial Group, Inc. (StanCorp Financial) (Portland, OR), the intermediate holding company of The Standard. The outlook of these Credit Ratings (ratings) is stable.

Concurrently, 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 ratings is stable.

The ratings of The Standard 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).

AM Best assesses The Standard’s risk-adjusted capital as strong, as measured by Best’s Capital Adequacy Ratio (BCAR). The capital level has been on a growth trend through 2020; however, dipped in 2021, but is projected to improve for 2022. Annual dividends have been paid to support debt coverage at StanCorp Financial and to upstream to its ultimate parent, Meiji Yasuda Life Insurance Company (Meiji Yasuda), over four of the past five years. Approximately two-fifths of The Standard’s invested assets are held in commercial mortgage loans with a concentration of loans on the West Coast. The Standard is the direct underwriter of the mortgage loans and has historical strong underwriting capabilities based on its long history as a loan originator. The mortgage portfolio is currently performing well.

The Standard continues to report favorable operating results with recent double-digit premium growth and recorded a trend of profitability with some fluctuation. The Standard maintains good business diversification between mortality and morbidity products, in addition to asset management. AM Best notes that The Standard maintains top 10 market positions in group long-term disability, individual disability insurance, group short-term disability and group life products. The Standard has a comprehensive and well-developed ERM program. The organization maintains good governance structure, appropriate risk management and controls.

The ratings of Pacific Guardian reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate ERM.

Pacific Guardian continues to maintain a high level of risk-adjusted capital. Historically, dividends have been paid consistently to the parent and has been tied closely to net income from the prior year, although AM Best notes that no dividend was paid in 2021 nor in the first six months of 2022. Pacific Guardian also has a high allocation of nearly two-fifths of invested assets to commercial mortgage loans, which are underwritten mostly by its affiliate, The Standard. The company currently has no outstanding debt; however, has access to a line of credit for short term liquidity needs. After several years of fluctuating premiums, Pacific Guardian experienced sizeable growth in 2022 driven by sales of its multi-year guaranteed annuity (MYGA) product. Net losses were reported in 2020 and 2021 after years of profitable operations. The recent net loss was due to a federal tax expense driven by the add back of the policy administration system depreciation to taxable income. AM Best notes that the company is one of Hawaii's largest and highly regarded group life insurance and group disability carriers and maintains a market leading position in the temporary disability income (TDI) market. Pacific Guardian launched a MYGA product in 40 states at the end of 2021. The company also has expanded its licensing to 46 states and the District of Columbia.

The ratings of The Standard and Pacific Guardian take into consideration the financial strength of their parent company, Meiji Yasuda, and the strategic role The Standard and Pacific Guardian play in the Meiji Yasuda organization.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Jeffrey Lane

Senior Financial Analyst

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Christopher Sharkey
Manager, Public Relations

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Sally Rosen
Senior Director

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Al Slavin
Communications Specialist

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Source: AM Best