2008-08-01 04:19:03 -

- Fitch Ratings has affirmed the insurer financial strength (IFS) ratings of Guardian Life Insurance Company of America and its wholly owned subsidiary, Guardian Insurance & Annuity Company, Inc. (collectively referred to as Guardian). The Rating Outlook is Stable.

Guardian's ratings reflect exceptional risk-adjusted capital strength based on Prism, Fitch's capital model, stable operating performance and a diversified business

profile. Guardian's Prism score benefits from the group's relatively low-risk liability profile, diversification of risk drivers and low operating leverage. The group's extremely strong balance sheet fundamentals also benefit from no financial leverage and relatively low exposure to liquidity and credit risk.

Guardian's consolidated risky assets, which include below-investment grade bonds, non-performing real estate, unaffiliated common stock, and Schedule BA assets--are below average for the industry and the mutual company peer group. Subprime exposure was nominal--0.09% of invested assets--at year-end 2007. There are no CDOs, CLOs, SIVs or asset-backed commercial paper on the balance sheet. A dynamic hedging program mitigates above-average exposure to unaffiliated common stock. The hedging program is designed to preserve a minimum capitalization ratio of 15%. The ratio was 16.3% at year-end 2007.

Guardian's overall operating performance remains stable and compares favorably with mutual company peers on a ratio basis. All core segments are contributing to results. Fitch anticipates that the individual disability loss ratio will increase somewhat but remain within pricing for the full year 2008. Mortality and persistency are also expected to remain within pricing.

Fitch's primary concern continues to be intense competition in the company's primary markets, which is pressuring sales and revenue growth. Guardian continues to invest in product and distribution initiatives, which should strengthen growth longer term.

Guardian is a mutual life insurance company based in New York City. As of March 31, 2008, the group had consolidated statutory total admitted assets and total adjusted capital of $41 billion and $4.5 billion, respectively.

Fitch affirms the following ratings with a Stable Outlook:

Guardian Life Insurance Company of America

--Insurer financial strength (IFS) 'AA+'.

Guardian Insurance and Annuity Company

--Insurer financial strength (IFS) 'AA+'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings
Cynthia J. Crosson, 212-908-0863, New York
Douglas L. Meyer, 312-368-2061, Chicago
or
Media Relations:
Sandro Scenga, 212-908-0278, New York