Life Insurance Company Gulf Guaranty’s AM Best Places Credit Ratings Under Review With Negative Implications

AM Best placed under review with negative implications the financial strength rating of B++ (good) and the long-term issuer credit rating of “bbb+” (good) of Gulf Guaranty Life Insurance Company (Gulf Guaranty Life) (Flowood , MS).

This credit rating (rating) action reflects a significant deterioration in Gulf Guaranty Life’s capital and surplus and risk-adjusted capitalization at the end of 2021, driven by an operating loss. The decline in the company’s financial performance resulted from higher claims expenses in the fourth quarter of 2021 and a significant increase in reserves primarily for claims in Gulf Guaranty Life’s core limited benefit medical businesses. Ratings will remain under review pending developments in reserves towards mid-2022 and potential actions that management is implementing to curb premium growth. Given the small size of the company’s absolute capital and surplus, even modest fluctuations in capital, surplus and premium can have a significant impact on risk-adjusted capitalization.

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