Best’s News & Research Service - May 26, 2017 02:06 PM (EDT)
Oldwick //BestWire// - A.M. Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” from “bbb+” for GBU Financial Life (GBU or the Society) (Pittsburgh, PA). The outlooks of these Credit Ratings (ratings) have been revised to stable from positive.
The rating actions reflect GBU’s increasing membership base and favorable operating performance, as the Society continues to manage interest rate spreads in the face of declining investment yields. While crediting rates remain relatively high compared with industry peers, A.M. Best notes that interest rate spreads remain healthy, with some cushion to reduce crediting rates if necessary. In addition, overall premium growth trends have been favorable in recent periods as GBU continues to attract new members through new fraternal benefit programs and mergers with other fraternal organizations. Furthermore, unassigned funds continue to increase, resulting in a solid level of risk-adjusted capitalization despite an increase in investment risk in recent periods.
Partially offsetting these positive rating factors is the Society’s limited business profile, as over 50% of direct premiums are derived from Pennsylvania and fixed annuities account for almost all of direct premiums and reserve liabilities. Partially mitigating this concern is the adequate surrender protection on its annuities and the fact that the assets and liability cash flows are well-matched. A.M. Best believes that GBU’s risk-management capabilities remain relatively weak for its risk profile. A.M. Best notes that the Society has strengthened certain aspects of its risk-management framework over the most recent period, including enhancements to its cyber risk management and the formalized documentation of operational procedures related to investments, accounting and disaster recovery. However, the establishment of a formal risk measuring and monitoring program to address key risks is still in the process of being developed. A.M. Best will continue to monitor GBU’s progress in strengthening its risk management capabilities.
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 Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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FAQs
A.M. Best recognizes GBU Life's fiscal responsibility and growth by assigning us one of the highest insurance company ratings. A.M. Best Company has rated GBU Financial Life A- since 2017.
What is the credit rating of GBU? ›
Oldwick //BestWire// - A.M. Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” from “bbb+” for GBU Financial Life (GBU or the Society) (Pittsburgh, PA).
What is the strongest credit quality? ›
Highest credit quality
'AAA' ratings denote the lowest expectation of default risk.
What is a strong investment grade credit rating? ›
Bonds with a rating of BBB- (on the Standard & Poor's and Fitch scale) or Baa3 (on Moody's) or better are considered "investment-grade." Bonds with lower ratings are considered "speculative" and often referred to as "high-yield" or "junk" bonds.
What is a good rating from AM Best? ›
What is the A.M. Best rating scale?
- Superior: Rating: A+, Notches: A++
- Excellent: Rating: A, Notches: A-
- Good: Rating: B+, Notches: B++
- Fair: Rating: B, Notches: B-
- Marginal: Rating: C+, Notches: C++
- Weak: Rating: C, Notches: C-
- Poor: Rating: D.
In general, the top providers will hold at least a B+ or B++, which represents a Good and Very Good rating. A rating of B or B- represents a Fair scoring, while a C+ or even C++ are considered Marginal, so these aren't typically seen with top providers.
What is considered a strong credit rating? ›
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
What is the best tier credit score? ›
A perfect credit score of 850 is hard to get, but an excellent credit score is more achievable. If you want to get the best credit cards, mortgages and competitive loan rates — which can save you money over time — excellent credit can help you qualify. “Excellent” is the highest tier of credit scores you can have.
What are the three big credit rating? ›
The Big Three credit rating agencies, Moody's, Standard and Poor's (S&P) and Fitch Ratings, control around 95% of the credit ratings in the financial markets.
Is a 900 credit score possible? ›
Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
What is the riskiest credit score? ›
What is a bad VantageScore credit score?
- Very Poor: 300-499.
- Poor: 500-600.
- Fair: 601-660.
- Good: 661-780.
- Excellent: 781-850.
The AA+ rating is issued by S&P and Fitch and is similar to the Aa1 rating issued by Moody's. This rating is still of high quality but it falls below the AAA ranking. It comes with very low credit risk even though long-term risks may affect these investments.
Is BBB a good credit rating? ›
'bbb' ratings denote good prospects for ongoing viability. The financial institution's fundamentals are adequate, such that there is a low risk that it would have to rely on extraordinary support to avoid default. However, adverse business or economic conditions are more likely to impair this capacity.
How often do BBB bonds default? ›
If you look at the BBB rated bonds (lowest rated investment grade bond), based on historical data, there is a 1.60% expected probability of default over a 5-year period, whereas the expected probability of default significantly increases to 9.27% for a B rated (Speculative) bond.
What is Main Street America Group AM Best rating? ›
Main Street America Insurance carries an "A" (Excellent) Financial Strength Rating, with a Stable Outlook, and "a+" Issuer Credit Rating from A.M. Best, the insurance industry's premier rating organization.
What is the GCU AM Best rating? ›
AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to GCU (Beaver, PA). The outlook assigned to these Credit Ratings (ratings) is stable.
What is the rating of Arch AM Best? ›
and Subsidiaries. AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of Arch Reinsurance Ltd. (Arch) (Bermuda) and its strategic affiliates.
