Market Overview

A.M. Best Affirms Credit Ratings of Members of Standard Insurance Group and Pacific Guardian Life Insurance Company, Ltd.


A.M. Best has affirmed the Financial Strength Rating (FSR) of A
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of
"a+" of Standard Insurance Company (Portland, OR) and its
affiliate, The Standard Life Insurance Company of New York (White
Plains, NY), together referred to as the Standard Insurance Group
(The Standard). Additionally, A.M. Best has affirmed the Long-Term ICR
of "bbb+" and the Long-Term Issue Credit Ratings (Long-Term IR) of
"bbb+" on the outstanding $250 million 5% senior unsecured notes, due
2022, of StanCorp Financial Group, Inc. (StanCorp Financial)
(Portland, OR), the intermediate holding company of The Standard.

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the
Long-Term ICR of "a" of Pacific Guardian Life Insurance Company, Ltd.
(Pacific Guardian) (Honolulu, HI). The outlook of these Credit Ratings
(ratings) is stable. The Standard and Pacific Guardian are the U.S.
insurance subsidiaries of Meiji Yasuda Life Insurance Company
(Meiji Yasuda).

The ratings of The Standard reflect its balance sheet strength, which
A.M. Best categorizes as strong, as well as its strong operating
performance, favorable business profile and appropriate enterprise risk
management (ERM).

The Standard maintains strong market positions in its core employee
benefit and individual disability markets, further benefiting from the
diversification into its asset management business segments. These
markets are viewed as highly competitive, but the organization has
maintained favorable premium growth trends and consistently favorable
earnings on Statutory and U.S. GAAP basis. Risk-adjusted capitalization,
as measured by Best's Capital Adequacy Ratio (BCAR), is assessed as
adequate; however, growth in total capital has been constrained by
dividends to StanCorp Financial. Additionally, A.M. Best views The
Standard's investment portfolio as higher risk due to the high
allocation to commercial mortgage loans, and concerns regarding the
geographic concentration and liquidity risk. However, A.M. Best notes
The Standard's expertise and long-term performance in this asset class.

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

Pacific Guardian maintains a leading market position in Hawaii's
temporary disability income market; however, the company has been
challenged to grow premiums in its other business lines and outside of
Hawaii. The company has reported consistent profitability, although
recent earnings have been impacted by increased investment in
technology. Total capital has reported modest declines due to dividends
to Meiji Yasuda; however, risk-adjusted capitalization, as measured by
BCAR, is assessed as strongest in support of its insurance and
investment risks.

This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases

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