KBRA Affirms Rating for Granular Insurance Company

KBRA affirms the A- Insurance Financial Strength Rating (IFSR) for Granular Insurance Company. The Outlook for the rating is Stable.

The rating reflects Granular’s good capitalization strategy, which includes access to additional capital, strong corporate governance, management team, and operational structure, focused and well-developed strategy, innovative product, Granular's parent's firm implicit and explicit commitment from Alphabet [NASDAQ: GOOGL], and well-established distribution relationships. The rating also reflects the substantial market opportunity for Granular’s product, as the Employer-Stop Loss (ESL) market is a large but static segment of the overall insurance sector. Balancing these strengths is the execution risk typically associated with a newer company, 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 Verily’s extensive industry relationships, its demonstrated ability to replace senior management internally, and Granular’s continued efforts to build out its senior management team. Factors that could positively impact the rating include: improved risk-adjusted capitalization, organic surplus growth, materially exceeding business plan objectives provided to KBRA, and establishment of meaningful market share. Factors that could negatively impact the rating include: poor execution of its business plan provided to KBRA, notable decline in capitalization, indications of a lower level of support from its owners, loss of key business partners or distribution sources, and departure of key members of the management team.

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