Fitch Ratings Upgrades Guardian's IFS Ratings to 'AA+'; Outlook Stable

Business Wire, Oct 29, 2007

NEW YORK -- Fitch Ratings has upgraded 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) to 'AA ' from 'AA'. The Rating Outlook is Stable.

Fitch's rating action reflects Guardian's sustained improved operating performance and higher than expected capital adequacy as measured by Prism, Fitch's new economic capital model. Guardian's Prism score for 2006 indicates that the company's available capital is 313% of required capital at the 'AAA' level. Guardian's Prism results benefit from the group's relatively low risk liability profile, which includes its traditional whole life business, diversification of risk drivers, and low operating leverage. The company's extremely strong balance sheet fundamentals also benefit from relatively low liquidity risk and no financial leverage.

Guardian's NAIC risk-based capital (RBC) at year-end 2006 met expectations at 429%-down slightly from 2005 as expected due to the company's acquisition of a majority interest in San Francisco-based asset management company, RS Investments.

Guardian continues to generate stable operating results and compares favorably with mutual company peers on a ratio basis. In 2006, the company had above-average post-dividend returns on surplus and total assets. The company also posted an above average four-year compound annual growth rate of total adjusted capital.

Fitch's primary concern continues to be intense competition, which is pressuring sales and revenue growth in Guardian's core individual and group business segments. Recent investment in product and distribution initiatives, however, is expected to strengthen growth going forward.

Guardian is a mutual life insurance company based in New York City. As of June 30, 2007, the group had consolidated admitted assets and total adjusted capital of $41 billion and $4.6 billion, respectively.

Fitch upgrades 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 '.

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