2008-11-13 16:46:01 -

www.ambest.com - A.M. Best Co. has downgraded the financial strength rating to A- (Excellent) from A (Excellent) and issuer credit rating to ? a- ? from ? a ? of Gleaner Life Insurance Society (Gleaner Life) (Adrian, MI). The outlook for all ratings has been revised to stable from negative.
These rating

actions reflect Gleaner Life ? s weak statutory operating results over the past three years, significant exposure to interest sensitive fixed annuities in a low interest rate environment, declining trends in retention levels of its large book of fixed annuity policies and recent impairment losses and their negative impact on Gleaner Life ? s capital and surplus funds.
A.M. Best notes that historically, Gleaner Life ? s business profile has been highly concentrated in the interest sensitive fixed annuity business with limited geographical distribution. However, over the past three years, Gleaner Life has experienced a high amount of annuity surrender activity with moderation noticed in the recent period. As a result, Gleaner Life ? s invested asset base has been declining, while its statutory operating results have softened due to narrow spread interest margin and lower net investment income. While the impairment losses associated with two distressed fixed income security names have resulted in a decline in its unassigned funds, Gleaner Life ? s remaining exposure to certain financial institutions may result in additional write-downs based on current low valuations.
Partially offsetting these factors are Gleaner Life ? s more than adequate risk-adjusted capitalization and generally positive statutory operating results, its long history as a fraternal organization with focus on providing financial securities to large membership base and its evolving life insurance growth strategies to improve its business mix and less reliance on fixed annuities.
For Best ? s Ratings, an overview of the rating process and rating methodologies, please visit cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ...
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ...

A.M. Best Co.

Analysts:

Robert Stewart, 908-439-2200, ext. 5232

mailto:robert.stewart@ambest.com

or

Raj Shah, 908-439-2200, ext. 5409

mailto:raj.shah@ambest.com

or

Public Relations:

Jim Peavy, 908-439-2200, ext. 5644

mailto:james.peavy@ambest.com

or

Rachelle Morrow, 908-439-2200, ext. 5378

mailto:rachelle.morrow@ambest.com