A.M. Best upgrades outlook on Gulf Guaranty Life

JACKSON — A.M. Best Co. has revised the outlook to “positive” from “stable” and affirmed the financial strength rating of “B- (Fair)” and issuer credit rating of “bb-” of Gulf Guaranty Life Insurance Company.

A.M. Best wrote: “The ratings reflect the company’s more than adequate level of risk-adjusted capitalization, improved net income reported in 2011 and consistent capital growth. The positive outlook reflects Gulf Guaranty Life’s recent operating profitability and the opportunity for business expansion through its additional industrial life sales activities in the funeral home market.

“Offsetting these factors are the overall modest and erratic levels of net income caused by investment losses, and flat credit insurance sales in the recent periods due to the slow lending market environment.

“Factors that could lead to positive rating movement include a continuation of positive net income trends while maintaining satisfactory levels of risk-adjusted capital. Potential for a future negative rating action could be possible should Gulf Guaranty Life experience weakened operating results or capitalization deteriorates materially from current levels.”