Clear Blue Financial Holdings, LLC Surveillance Report

Rating Summary

The ratings reflect Clear Blue’s experienced management team, sound operating company capitalization, high quality and liquid investment portfolio, an efficient corporate structure with service companies that generate significant unregulated cash flows that can provide capital to support growth and cover debt service, and a prominent market position. Clear Blue’s ERM program is adequate for its risk profile and continues to mature. As of YE2025, consolidated GAAP financial leverage was elevated at 43%, up from 33% at YE2024. Similarly, EBIT coverage and cash coverage of interest expense declined to low single digits in recent years as Vesttoo-related losses pressured earnings. Financial leverage and interest coverage are expected to improve in the near-term.

Balancing credit strengths is Clear Blue’s business model that relies heavily on reinsurance, which gives rise to counterparty credit risk and to the need to continuously renew appropriately structured treaties…