Ratings upgrade a real benefit to Security Benefit, says insurer's boss

Kiley says A rating will boost distribution of annuities; carrier's premiums already on the rise
MAY 14, 2012
Now that Security Benefit Life Insurance Co.'s ratings have been bumped into the A range, chief executive Michael Kiley hopes to get more banks and broker-dealers selling the insurer's annuities. This month, Standard and Poor's raised the carrier's financial strength rating to A-, from BBB+, giving Security Benefit a “stable” outlook. Just last year, the insurer introduced its first fixed indexed annuity through an alliance with Advisors Excel, a field marketing organization, in an arrangement that made that annuity available only to agents working with Advisors Excel. The product was a development that emerged following Security Benefit's acquisition by Guggenheim Partners LLC in 2010. The insurer, which took its share of lumps in the 2008 recession, has been turning around under Guggenheim's ownership. Last year's new indexed annuity and the deal with the FMO helped boost Security Benefit's profile with Standard and Poor's because the carrier is “expanding outside of its historically strong position in the 403(b) market and has also helped diversify its revenue and profitability streams,” according to a May 2 report from S&P credit analyst Jeremy Rosenbaum. Mr. Rosenbaum also noted in the report that premiums at Security Benefit have jumped sharply, reaching $1.6 billion last year — stemming largely from $950 million in sales of the new indexed annuity. That's up from a low of $345 million in 2010. “The challenge has always been that you need an A rating to get distribution, but in order to have the A rating, you need distribution,” Mr. Kiley said in an interview Friday. He noted that now that Security Benefit is in the A range, it can begin expanding its reach to other distributors that look closely at ratings before doing business with life insurers. “We'll have more access to broker-dealers and bank distribution where the A-range rating is essential for getting onto the platform,” Mr. Kiley said. “It will add to a successful run in the fixed-indexed-annuity market.”

Latest News

Newsom wants nationwide billionaires tax as presidential bid may loom on the horizon
Newsom wants nationwide billionaires tax as presidential bid may loom on the horizon

“It’s time for an economic reset,” wrote the California governor, in a post on X.

Maryland regulators spank fledgling art-focused RIA Masterworks over registration snafus
Maryland regulators spank fledgling art-focused RIA Masterworks over registration snafus

Masterworks was launched in 2017 but its RIA, Masterworks Advisers, is just three years old.

Investors allege Miami operator took over $1.5 million in EB-5 scheme
Investors allege Miami operator took over $1.5 million in EB-5 scheme

One 2017 form, no broker license, and a $42 million gap they say surfaced on a webinar.

Gen X, millennials lag in retirement confidence amid knowledge gap
Gen X, millennials lag in retirement confidence amid knowledge gap

Fewer than half of Americans in their peak earning years feel on track for retirement, while many say limited financial knowledge and access to professional guidance are holding them back.

Advisor moves: Veteran-led UBS team overseeing $460 million migrates to Merrill
Advisor moves: Veteran-led UBS team overseeing $460 million migrates to Merrill

Meanwhile, Wells Fargo hauled advisors overseeing $825 million in the West Coast, while Wedbush has welcomed a seasoned professional from Stifel in California.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.