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Best’s News & Research Service - March 31, 2023 10:17 AM (EDT)

AM Best Revises Outlooks to Negative for Members of GPM Life Group

  • March 31, 2023 10:17 AM (EDT)
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Oldwick //BestWire// - AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of GPM Health and Life Insurance Company and Government Personnel Mutual Life Insurance Company. These companies are headquartered in San Antonio, TX, and collectively are known as GPM Life Group.

The Credit Ratings (ratings) reflect GPM Life Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The negative outlooks reflect AM Best’s concern over a continued decline in operating performance resulting from new business strain as well as higher-than-expected mortality. Furthermore, there has been some pressure within GPM Life Group’s business profile due to a distribution channel concentration and execution risks regarding its recent strategic plan to expand into new markets.

Although capital and surplus has declined in recent periods due to the aforementioned operating losses, the group’s risk-adjusted capitalization remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The investment portfolio remains conservatively invested and produces adequate income. While GPM Life Group maintains a modest market position, premiums have increased considerably in recent years, primarily within its core ordinary life insurance product lines. AM Best also notes that most liabilities within GPM Life Group’s product portfolio are considered to be higher creditworthy products on AM Best’s risk continuum.

The group’s ERM program is appropriate for the size and scale of operations and includes an overall risk framework with policies and procedures. AM Best will continue to monitor GPM Life Group’s ability to improve its overall operating performance, while strengthening its business profile over the near term.

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.

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