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 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 Worthbased investment firm. The rating outlook is Stable.
The rating reflects Independent Life’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 has entered the market at an opportunistic time where several legacy SSA 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 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’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 SSA liabilities as well as its broad relationships with a number of plaintiff-oriented structured settlement brokers and planners.