KBRA Affirms Rating for Granular Insurance Company
12 Dec 2024 | New York
KBRA affirms the A- Insurance Financial Strength Rating (IFSR) for Granular Insurance Company ("Granular" or "GIC"). The Outlook for the rating is Stable.
The rating reflects Granular's strong risk-adjusted capital, which includes access to additional capital, strong corporate governance, management team, and operational structure, focused and well-developed strategy leveraging an innovative product, and well-established distribution relationships. The rating also reflects the substantial market opportunity that the Employer-Stop Loss (ESL) market presents for Granular to share risk in improving outcomes and better predicting and managing costs for its customers.
Balancing these credit strengths are the competitive ESL marketplace, which has many well-established companies already operating in it, and the company’s exposure to key executive risk. These risks are partially offset by Granular's extensive industry relationships, its demonstrated ability to replace senior management internally, and Granular’s continued efforts and success in building out its senior management team.
Granular is an accident and health insurer focused on an innovative precision risk-based approach to the ESL market, a segment of commercial insurance that protects self-funded employers from unexpected and large employee health benefit claims by reimbursing employers for claims above a defined amount. GIC is a wholly owned subsidiary of Verily Life Sciences LLC (Verily), which is ultimately owned by Alphabet Inc. [NASDAQ: GOOGL]
Factors that could positively impact the rating include a consistent trend in organic surplus growth, performance that materially exceeds forecasts provided to KBRA, and establishment of meaningful market position.
Factors that could negatively impact the rating include a material decline in capitalization, indications of a lower level of support from its owners, material underperformance relative to forecasts provided to KBRA, loss of key business partners or distribution sources, and departure of key members of the management team without a suitable replacement.
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