KBRA Upgrades Ratings for The Fortegra Group, Inc. and Removes Watch Developing Status
5 Aug 2026 | New York
KBRA upgrades all ratings for The Fortegra Group, Inc. (TFG or Fortegra) and removes them from Watch Developing, where they were placed on September 29, 2025 following the announcement that DB Insurance Co., Ltd. (DB Insurance) (KOSPI: 005830) would be acquiring TFG. The transaction closed on May 29, 2026. KBRA upgrades the insurance financial strength ratings to A from A- for the following Fortegra's insurance subsidiaries: Fortegra Specialty Insurance Company, Lyndon Southern Insurance Company, Insurance Company of the South, Response Indemnity Company of California, Life of the South Insurance Company, Bankers Life of Louisiana, and Southern Financial Life Insurance Company. Additionally, KBRA upgrades the issuer rating for TFG to BBB+ from BBB, the long-term credit rating to BBB from BBB- for the $150 million 9.25% fixed rate resetting junior subordinated notes due 2064 and, the long-term credit rating to BBB from BBB- for the $125 million 8.50% fixed rate resetting junior subordinated notes due 2057 issued by Fortegra Financial Corporation and guaranteed by TFG . The Outlook for all ratings is Stable.
The upgrades reflect Fortegra's sustained strengthening of its credit profile over multiple years, supported by consistently strong operating performance, disciplined underwriting execution, improved quantitative credit metrics, and continued enhancement of its business franchise. Fortegra has consistently generated profitable growth while maintaining statutory combined ratios in the high-80% to low-90% range, materially outperforming industry benchmarks. Continued internal capital generation, supplemented by parent capital support, has strengthened statutory surplus, improved underwriting leverage, and reinforced the group's overall financial profile.
The upgrade also reflects the strategic benefits associated with Fortegra's acquisition by DB Insurance, one of South Korea's leading property and casualty insurers. While Fortegra is expected to continue operating independently under its existing management team, ownership by a well-capitalized global insurance organization potentially enhances the group's financial flexibility and access to capital, supporting its long-term growth strategy.
The ratings reflect Fortegra’s favorable underwriting results, balanced mix of revenue and earnings, new ownership, adequate capitalization, favorable market position and solid interest coverage. Historically, Fortegra has exhibited solid underwriting results that have been supplemented by significant fee income. Investment results have generally enhanced the firm’s net earnings while maintaining a high quality and liquid investment portfolio. The company’s product portfolio is well diversified, and geographic diversification has improved in recent years as the company has expanded its business in Europe. The company also has a strong market position. TFG’s EBIT/Interest paid coverage is solid, which includes significant fee income from its unregulated businesses.
Balancing these strengths are the insurance operating companies’ extensive use of reinsurance and high reinsurance recoverables, moderate financial leverage and execution risk associated with its European expansion. Although reinsurance recoverable balances continue to increase with new business growth, recoverables to lower rated and non-rated reinsurers are well collateralized. In addition, KBRA believes that Fortegra has a somewhat aggressive growth strategy, particularly as the company expands its European business which exposes the company to execution risk.
Factors that could positively impact the rating include sustained, controlled growth in earnings across both regulated and non-regulated subsidiaries, material organic growth in insurance operating company capital, sustained improvement in risk adjusted capitalization at U.S. insurance companies, a reduction in underwriting leverage and material sustained increases in scale and enhanced market position as a subsidiary of DB Insurance.
Factors that could negatively impact the rating include an unfavorable change in risk profile, a material decline in underwriting profitability, adverse modification or discontinuation of the pooling agreement for the U.S. property and casualty operating subsidiaries, and sustained elevated financial leverage – including the addition of securities to TFG’s capital structure that are senior to the junior subordinated notes – or a significant decrease in interest coverage.
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