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.
SEP 08, 2011
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.”

Latest News

SEC to lose Hester Peirce, deepening a commissioner crisis
SEC to lose Hester Peirce, deepening a commissioner crisis

The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships
Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships

Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management