FINANCIAL
INFORMATION

Highlights

(Highlights are on a consolidated basis)

PREMIUMS

2017

$9.4B

2016

$9.3B

OPERATING INCOME

2017

$1.6B

2016

$1.5B

(Operating Income before taxes and dividends to policyholders.)

CAPITAL

2017

$8.0B

2016

$7.4B

ASSETS UNDER MANAGEMENT

2017

$71.5B

2016

$66.5B

POLICYHOLDER DIVIDENDS DECLARED

2017

$913M

2016

$850M

BENEFITS PAID TO POLICYHOLDERS

2017

$6.1B

2016

$5.9B

LIFE INSURANCE IN FORCE

2017

$637B

2016

$600B

RATINGS

A.M. BEST COMPANY

A++

SUPERIOR – HIGHEST OF 15 RATINGS

FITCH

AA+

VERY STRONG – 2ND HIGHEST OF 21 RATINGS

MOODY’S INVESTORS SERVICE

Aa2

EXCELLENT – 3RD HIGHEST OF 21 RATINGS

STANDARD & POOR'S

AA+

VERY STRONG – 2ND HIGHEST OF 22 RATINGS

COMDEX

The ratings of The Guardian Life Insurance Company of America^® (Guardian) quoted in this report are as of December 31, 2017, and are subject to change. The ratings earned by Guardian do not apply to the investments issued by The Guardian Insurance & Annuity Company, Inc. (GIAC) or offered through Park Avenue Securities LLC (PAS). Rankings refer to Guardian’s standing within the range of possible ratings offered by each agency. Comdex is not a rating but a composite of all ratings that a company has received from the four major ratings agencies (A.M. Best, Fitch, Moody’s and Standard & Poor’s). Comdex represents a company’s percentile standing, on a scale of 1 to 100 (with 100 being the best), in relation to other companies that have been rated by the major agencies.

2017 FINANCIALS

As of December 31 (in millions)	2017	2016
Admitted Assets
Bonds	$38,125	$35,243
Unaffiliated common and preferred stocks	536	478
Investments in affiliates	995	1,044
Mortgage loans	4,001	3,472
Private and real estate equity	1,478	1,458
Policy loans	3,520	3,405
Receivable for securities, other invested assets, and derivatives	1,246	997
Cash and short-term investments	554	822
Total invested assets	50,455	46,919
Due and accrued investment income	430	384
Premiums deferred and uncollected	1,091	1,058
Net deferred tax asset	587	727
Reinsurance recoverable from affiliate	2,641	2,472
Other assets	365	324
Total admitted assets	$55,569	$51,884
Liabilities and surplus
Reserves for policy benefits	41,778	39,369
Policyholder dividends payable and other contract liabilities	3,550	3,107
Interest maintenance reserve	531	464
Asset valuation reserve	829	810
Amounts due to brokers and other liabilities	2,197	1,962
Total liabilities	48,885	45,712
Policyholders' surplus	5,487	5,327
Surplus note	1,197	845
Total liabilities and surplus	$55,569	$51,884

As of December 31 (in millions)	2017	2016
Revenues
Premiums, annuity considerations, and fund deposits	$8,112	$7,768
Net investment income	2,106	2,052
Other income	441	421
Total revenue	10,659	10,241
Benefits and expenses
Benefit payments to policyholders and beneficiaries	4,449	4,293
Net additions to policy benefit reserves	2,409	2,330
Commissions and operating expenses	2,383	2,262
Total benefits and expenses	9,241	8,885
Gain from operations before policyholder dividends and taxes	1,418	1,356
Policyholder dividends	(903)	(839)
Gain from operations before taxes and realized capital losses	515	517
Income tax expense	(65)	(141)
Income from operations before net realized capital losses	450	376
Net realized capital losses	(27)	(8)
Net income	$423	$368

ASSET CLASS ALLOCATION – DECEMBER 31, 2017

Statement Value	$ Millions	% of Invested Assets
Public Fixed Income (excl. surplus note debentures)	28,889	57.3%
Private Placement Debt	9,236	18.3%
Commercial Mortgages	4,001	7.9%
Policy Loans	3,520	7.0%
Affiliates & Subsidiaries¹	1,819	3.6%
Private & Real Estate Equity	1,478	2.9%
Cash, Short-Term & Other Invested Assets	1,050	2.1%
Public Equity²	462	0.9%
Total Invested Assets	$50,455	100.0%

Fixed Income and Convertible Bonds – DECEMBER 31, 2017

Statement Value	$ Millions	% of Bonds
NAIC 1 (Aaa-A/AAA-A)	21,653	56.8%
NAIC 2 (Baa/BBB)	14,685	38.5%
Investment Grade Subtotal	36,338	95.3%
NAIC 3 (Ba/BB)	753	2.0%
NAIC 4 (B)	869	2.3%
NAIC 5&6 (Caa/CCC & below)	165	0.4%
Below Investment Grade Subtotal	1,787	4.7%
Total Bonds³	38,125	100.0%

¹Affiliates and Subsidiaries includes $824 million in affiliates classified as LLCs on the annual statement that are not private equity.

²Public Equity excludes Bond & Cash Mutual Funds and includes commodity ETFs.

³Total Bonds includes public and private debt but excludes surplus note debentures classified as Schedule BA invested assets, commercial mortgages and preferred stock.