NEW YORK (May 2, 2019) – Kroll Bond Rating Agency (KBRA) affirms the insurance financial strength rating (IFSR) of A- for Independent Life Insurance Company (Independent Life), a Texas-domiciled life insurance company that focuses exclusively on the structured settlement market.Independent Life Insurance Company is the underwriter within the Independent Insurance Group, which was formed in early 2018 via collaboration between management and LKCM Headwater Investments, the private investment arm of Luther King Capital Management, a Fort Worth, Texas-based investment firm. The KBRA rating outlook is Stable.
The rating reflects Independent Life Insurance Company’s sound initial capitalization and future commitment from LKCM, which KBRA believes is sufficient to support the company’s growth strategy over the medium term, as well as management’s extensive experience in the structured settlement annuity (SSA) industry. Independent Life Insurance Company has entered the market at an opportunistic time where several legacy structured settlement annuity providers have exited. These exits were driven by compressed margins on inforce policies priced assuming continued availability of higher-yielding assets as well as the desire of these firms to divest non-core (capital intensive) operations.
Independent Life Insurance Company benefits from a clean balance sheet, strong asset management capabilities, and financial flexibility in operating a spread-based business in a favorable pricing environment. KBRA views favorably Independent Life Insurance Company’s disciplined approach to the market, where the company will eschew business at insufficient margins and employ conservative underwriting on impaired risks. As such, KBRA understands that it will take some time to gain market acceptance and notable market share. Finally, KBRA recognizes the management team’s broad experience in pricing and managing structured settlement annuity liabilities as well as its broad relationships with a number of plaintiff-oriented structured settlement brokers, planners, and plaintiff attorneys.