Ratings aside, new Security Benefit CEO aims for stronger retirement product presence

Insurance and investment veteran Michael Kiley, who will take the helm of Security Benefit Corp. on Sept. 30, is setting his expectations high.
The insurer, which is undergoing a turnaround under the ownership of Guggenheim Partners LLC, moved Mr. Kiley over from Guggenheim’s roster, where he is a senior managing director. A former chief executive of Van Kampen Investments Inc. and an alumnus of Guardian Life Insurance Co. of America, Mr. Kiley succeeds Howard Fricke, who has been the interim president and chief executive of the insurer since February 2010.
In his new role, Mr. Kiley will have oversight over all of Security Benefit’s business lines, including Rydex SGI.
Security Benefit has historically been a top player in the 403(b) retirement plan space but suffered some harsh downgrades from rating agencies during the 2008 downturn.
But things have changed since Guggenheim’s February 2010 acquisition of Security Benefit.
A.M. Best Co. Inc., for instance, upgraded the carrier’s financial strength rating to B++ from B+ on Aug. 1, citing “a large cash capital infusion by Guggenheim.”
“The backing for further increases is at hand,” Mr. Kiley said.
Security Benefit has kicked off a major push into the retail space through new annuities. Recent innovations include an exclusive indexed annuity available through Advisors Excel, an independent marketing organization, and a fee-based variable annuity that pays no commission but comes with 200 investment options.
Other goals include making further inroads into wirehouses, banks, broker-dealers and the small defined-contribution market.
“We have the ability to be a player with market share in multiple segments of the retirement product space, and that’s how I’d like to see Security Benefit going forward,” Mr. Kiley said.
However, industry experts said Security Benefit’s ratings are the biggest obstacle to overcome.
“People are more concerned about ratings than ever before, so how does that translate into success for any B-rated carrier?” asked Sheryl Moore, chief executive of Advantage Group Associates Inc.
Success is even more elusive in a low-interest-rate environment, which makes it harder for insurers to offer generous terms on indexed annuities, she added.
“In the most challenging rate environment, it’s going to take a strong leader to get them to an A rating and get them in the game,” Ms. Moore said.
Judith Alexander, director of sales and marketing at Beacon Research Publications Inc., agreed. “In the variable annuities space, you have to have at least an A to make much headway.”