KBRA Affirms All Ratings for Kuvare

KBRA affirms the A- insurance financial strength ratings (IFSRs) of Guaranty Income Life Insurance Company (GILICO), Kuvare Life Re Ltd. (KLR) and United Life Insurance Company (ULIC), with Stable Outlooks. KBRA also affirms the BBB+ IFSR of Lincoln Benefit Life Company (LBL), with a Negative Outlook. In addition, KBRA affirms the BBB- issuer ratings of Kuvare UK Holdings Limited (KUK) and Kuvare US Holdings, Inc. (KUS), with Stable Outlooks. KBRA also affirms the BB debt rating on KUS’ $225 million Fixed Rate Reset Cumulative Preferred Stock due 2051, with a Stable Outlook. Collectively, the companies are referred to as Kuvare.

Key Credit Considerations

The ratings reflect strong capital management and financial flexibility, comprehensive evolving ERM, a strong liquidity profile, a well-articulated business strategy, and adequate capitalization. Kuvare has consistently demonstrated an active, disciplined approach to capital management across the platform, using a mix of organic earnings, reinsurance structuring, and holding company liquidity tools to support operating company needs and strategic initiatives. Kuvare’s access to external contingent liquidity and its history of deploying capital where needed underpin financial flexibility, helping to manage timing mismatches associated with growth, hedging/collateral dynamics, and transaction execution. Kuvare continues to formalize and deepen ERM across the organization, with clearer governance, committee oversight, and scenario-based monitoring that improves linkage across the company’s risk appetite, capital planning, and liquidity management. KBRA believes that liquidity is a key strength for Kuvare given the combination of operating company liquidity resources and holding-company backstops, supported by stress testing that explicitly considers policyholder behavior and market shocks. The platform’s liquidity management emphasis is particularly relevant for spread-based annuity insurers and an asset-intensive reinsurer, where adverse market moves can create both policyholder outflows and collateral/financing needs. Management’s monitoring and available contingent sources support KBRA’s confidence that near-term obligations can be met without forcing value-destructive asset sales under most plausible stress scenarios. Kuvare’s business strategy is risk-focused and consistently communicated – scale spread-based retail annuity manufacturing/distribution, expand asset-intensive reinsurance with disciplined deployment pacing, and actively manage legacy blocks through risk transfer and runoff optimization. Capital levels at the operating companies are managed to internal targets and are viewed by KBRA as adequate at the current rating levels.

Balancing these strengths are high operating leverage, legacy exposures constraining growth, elevated holding company financial leverage, heavy reliance on reinsurance and a competitive annuity (re)insurance market. Kuvare’s operating model remains structurally levered given the scale of liabilities supported by current surplus levels and reliance on spread earnings to generate capital over time. This leverage heightens sensitivity to credit losses, spread compression, reserve strengthening, or abrupt policyholder behavior shifts; accordingly, to maintain capital adequacy requires continued execution against earnings, asset quality, and risk transfer plans. Legacy exposures remain a central credit negative due to experience volatility and capital intensity, which has absorbed management attention and balance sheet capacity. Holding-company leverage and associated fixed charges increase sensitivity to periods of weaker earnings or transaction timing mismatch, particularly if capital needs simultaneously emerge at the operating companies. Even with liquidity tools available, KBRA believes that elevated leverage may become a binding constraint through covenants, refinancing risk, or reduced capacity to downstream capital without increasing debt reliance and remains an important medium-term credit consideration that KBRA will monitor closely. Reinsurance is a core feature of Kuvare’s business model across the platform, supporting capital efficiency, risk shaping, and growth, but it also creates structural dependencies on treaty performance, counterparty strength, collateral mechanics, recapture provisions, and ongoing market capacity/pricing. KBRA remains focused on overall program complexity and reinsurer concentration. Adverse treaty terms, counterparty stress, or reduced reinsurance availability could affect capital, earnings stability, and business momentum, particularly during periods of market strain when reinsurance becomes more expensive or less available. The retail annuity and asset-intensive reinsurance markets remain highly competitive, which KBRA believes can pressure new business pricing, crediting rates, and commissions, and can incentivize riskier asset allocation or looser product terms if not tightly governed. Competition also heightens disintermediation risk in rising-rate environments, underscoring the importance of disciplined product management, distribution economics, and ALM/liquidity controls to defend spreads and avoid adverse selection.

Rating Sensitivities

Executed management actions that durably reduce legacy exposure volatility and capital strain, sustained improved capitalization metrics above company targets driven by stable to improving earnings that generate capital internally, continued evidence that liquidity risk is well controlled and ERM is evolving appropriately as the platform continues to scale, and/or sustained reduction in financial leverage at KUS could result in positive rating action.

Continued adverse legacy experience, failure to execute management actions that durably reduce legacy exposure volatility, weakening capital or liquidity, governance/model risk issues that pressure capital adequacy at KLR and/or increased financial leverage or deterioration in holding company financial flexibility could result in negative rating action.

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Methodologies