KBRA Affirms Ratings for Aspida Holdings Ltd. and Certain Operating Subsidiaries
18 Jul 2025 | New York
KBRA affirms the A- insurer financial strength ratings (IFSRs) of Aspida Life Insurance Company and Aspida Life Re Ltd. as well as the BBB issuer rating of Aspida Holdings Ltd. Collectively the companies are referred to as Aspida. The Outlook for all ratings is Stable.
Key Credit Considerations
The ratings reflect Aspida’s solid risk-adjusted capitalization, seasoned management team, scalable tech-enabled retail platform, moderate holding company leverage with adequate debt service coverage, as well as strong strategic alignment with, and tangible support, from Ares Management Corporation (NYSE: ARES). As of December 31, 2024, Aspida Life’s CAL RBC ratio was 398% (2023: 480%) while Aspida Life Re’s BSCR coverage ratio was 206% (2023: 214%). Aspida’s management team is comprised of experienced (re)insurance executives with demonstrated track records in prior roles. Aspida Life’s proprietary technology platform has exhibited a competitive advantage through its focus on customer service to producers and annuitants, resulting in rapid market share growth for indexed annuities and multi-year guaranteed annuities. As of December 31, 2024, KBRA calculates holding company leverage as 23.6% (2023: 26.6%) and notes undrawn revolver capacity of $250 million. KBRA believes that cash balances at the holding company are more than sufficient to cover interest expense and preferred dividend payments over the medium term. In addition, significant dividend capacity at Aspida Life Re provides a robust backstop and supports Aspida’s overall financial flexibility. Ares has raised approximately $2.3 billion of equity capital, inclusive of its own investment, to fund Aspida’s launch and early-stage growth. Ares Insurance Solutions provides Aspida a competitive advantage in the asset-intensive (re)insurance markets via investment allocation and origination, asset-liability management, capital management optimization, and corporate development.
Balancing these strengths are limited internal generation of capital, exposure to spread compression and disintermediation risks inherent in Aspida’s liability mix, execution risk tied to ambitious organic and reinsurance-led growth, and an ongoing reliance on external capital until internal capital generation fully supports expansion. Aspida Life has reported a cumulative US Statutory net loss of $159 million for the period 2022-2024, with $4 million net income emerging in 1Q 2025 as new business began to earn through and the strain from new business growth was mitigated by reinsurance. Aspida Life Re has reported a US GAAP net loss of $20 million for the period 2021-2024, primarily attributable to adverse investment marks in 2022. KBRA expects start-up companies to report net accounting losses in the early years but notes a positive trend in underlying earnings as Aspida Life Re reported $296 million in non-GAAP adjusted operating income for the 2021-2024 period. KBRA expects the emerging positive profitability trends to continue as Aspida Holdings methodically executes its business plan in competitive markets and scales its operations. Aspida Life’s key products are fixed rate-annuity focused, subjecting it to spread compression during periods of falling interest rates and disintermediation risk during periods of rising interest rates although current financial projections and spread targets indicate appropriate management of crediting rates and earned yields. KBRA also believes that Aspida Life Re’s access to sophisticated investment sourcing, asset-liability management, and capital optimization strategies through Ares Insurance Solutions in conjunction with its structuring capabilities provides appropriate downside protection. Aspida has ambitious organic and reinsurance growth plans and, while KBRA acknowledges the significant progress made to date, the company’s build out of system and risk management enhancements to improve governance, modeling capabilities and regulatory reporting is ongoing and needs to keep pace with the expansion of the company’s franchise. The recent Ares capital raise provides significant dry powder to deploy in support of Aspida’s continued growth. Aspida also has material untapped debt capacity. However, internal capital generation needs to assume a material role over the medium term to enhance Aspida’s credit rating profile.
Rating Sensitivities
Material internal generation of capital that better supports growth ambitions, broader diversification of liabilities, sustained CAL RBC ratio at the current level and BSCR coverage ratio commensurate with a higher rating level and/or sustained positive statutory net income could result in positive rating action.
Significant deterioration in risk-adjusted capital ratios, elevated holding company leverage, sustained material negative statutory earnings, failure of ERM to evolve with growth in size and complexity of the companies’ operations, Ares materially reducing its ownership/support and/or Aspida Holdings’ breaching a covenant on its bank debt could result in a negative rating action.
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