KBRA Affirms Rating for Heritage Life Insurance Company
30 Jun 2026 | New York
KBRA affirms the A- insurance financial strength rating (IFSR) of Heritage Life Insurance Company (HLIC). The Outlook for the IFSR is Stable. HLIC is a stock life insurance company domiciled in Arizona that reinsures life and annuity products as well as supplementary contracts.
Key Credit Considerations
The rating on HLIC reflects solid capitalization, a conservative liquidity position, and an experienced leadership team. HLIC’s year-end 2025 CAL RBC ratio of 444% has steadily improved in recent years, and was supported by recent capital infusions, including a $500 million equity contribution in 2024 and a $600 million equity contribution in 2025. Liquidity is strong, with HLIC maintaining nearly $2.4 billion in cash and equivalents as of 1Q26. The investment portfolio is well-diversified with roughly two-thirds of invested assets held in bonds, over 90% of which are investment-grade. Supplemental borrowing capacity through FHLB lines and bank facilities, together with a disciplined duration‐ mismatch limit, further supports HLIC’s capital position. Executive leadership is long-tenured and has executed more than 40 reinsurance transactions with over 30 cedants since 2012.
Balancing these strengths are HLIC’s concentration in spread-based annuity reinsurance. This exposes the company to spread compression in falling-rate environments and disintermediation risk when rates rise, though spreads have thus far stayed at or above management’s internal target. As of November 2025, HLIC is now part of the Amistad Financial Group, LLC (Amistad) organization, which provides the company access to a larger balance sheet and back-office and ERM capabilities. However, Amistad is more highly levered than prior ownership, which could limit HLIC’s ability to obtain capital for growth opportunities. Earnings remain heavily dependent on a small number of treaties, heightening counterparty and concentration risk despite the ability to pause forward-flow business. Statutory results since 2023 have been negatively impacted by first-year commissions and ceding allowances paid. Management expects this new business to meet long-term return targets, which will improve reported statutory results prospectively. Finally, HLIC operates in an increasingly competitive annuity reinsurance market dominated by larger, more established players; success in moving up-market will require disciplined underwriting and continued capital support.
Rating Sensitivities
Consistent operating and net income that results in internal generation of capital, material favorable variance to forecasts provided to KBRA and/or further diversification of HLIC’s liabilities could result in positive rating action. Material deterioration in risk-based capitalization below company targets, including unexpected material dividend requirements to service holding company debt, a material adverse change in risk profile and/or material unfavorable variance to forecasts provided to KBRA could result in negative rating action.
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