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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 21, 2012 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a” of Gerber Life Insurance Company (Gerber Life) (White Plains, NY). The outlook for both ratings is stable.
The rating affirmations reflect Gerber Life’s dominant share of the juvenile life insurance market, increasing net premium revenue and generally favorable operating results. Additionally, the company’s ratings receive enhancement from the financial strength and implicit support of its parent company, Nestlé Holdings, Inc., which is a U.S. subsidiary of the international food and beverage conglomerate, Nestlé, S.A. (Nestlé) (Switzerland) [Swiss: NESN].
These positive rating factors are somewhat offset by Gerber Life’s recent decline in individual life operating results. The results were influenced by one-time higher death claims due to mandated regulatory requirements as well as higher acquisition expenses prompted by the sluggish economy. Moreover, A.M. Best notes that Gerber Life’s overall business mix and source of its operating gains are shifting somewhat with greater dependence on medical stop-loss business, which is cyclical in nature.
Gerber Life is a widely-recognized leader in the juvenile life insurance market and sells its products nationally under the Gerber brand through diverse direct-to-consumer media channels. The company markets juvenile life insurance and other financial products to individuals as well as medical stop-loss products to self-insured employer groups.
A.M. Best believes Gerber Life is well-positioned at its current rating level. Negative rating actions may occur if the company’s operating results or risk-adjusted capital deteriorates, or if the Gerber brand name incurs reputational damage.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.