Transaction Overview

AM Best Upgrades Credit Ratings of Investors Life Insurance Company of North America

November 22, 2024-AM Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb+” (Good) from “bbb-” (Good) of Investors Life Insurance Company of North America (ILICNA) (Dallas, TX). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect ILICNA’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings also reflect implicit support from ILICNA’s new parent companies. On July 1, 2024, ILICNA became a wholly owned subsidiary of Arcus Holdings Inc. (Arcus) (Delaware), which in turn, is majority owned by BDT & MSD Holdings, L.P. (BDT & MSD) (Delaware). BDT & MSD and Arcus acquired ILICNA to support an innovative, consumer-centric growth strategy in the annuity and life insurance markets.

ILICNA has been in run-off since 2008, but the company is now expected to profitably grow its business through a novel, technology-enabled distribution strategy focused on partnering with insurers and reinsurers. The goals of the strategy are consumer-centric and focus on the full lifecycle needs of its partner network and policyholders. Arcus’ experienced leadership team has a history of relevant (re)insurance industry and investment experience, with a proven track record at other groups. AM Best factors this as an improvement in ILICNA’s business profile.

The risk-based capitalization of ILICNA is currently assessed at the strongest level as measured by Best's Capital Adequacy Ratio (BCAR); however, partially offsetting these positive factors is the company’s relatively modest statutory capital and surplus of approximately $40.2 million at the end of third-quarter 2024, which exposes ILICNA to a higher level of event risk. Currently, ILICNA has nominal market share with closed blocks of legacy individual life insurance and annuities in highly competitive markets, as well as execution risk related to achieving current business plans. AM Best will monitor ILCINA’s future capitalization against planned growth initiatives..

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