KKR & Co. Inc. to Acquire Global Atlantic Financial Group, Ltd.
Due to high client demand, ALIRT Research has put together the following bullet-points on the recently announced acquisition of Global Atlantic by KKR & Co. Inc. Currently there is little additional information available on this transaction, but we will make sure to update our client base as we learn more.
Jackson National Life Insurance Company Update: De-Merger from Prudential Plc About to Occur
In August 2021, Prudential Plc (PRUplc), parent company of Jackson Financial Inc. (JXN) and primary life insurance company subsidiaries Jackson National Life Insurance Company (JNLIC) and Jackson National Life Insurance Company of New York (JNLNY), announced its plan and timing for its planned “de-merger” of JXN.
China Oceanwide acquisition of Genworth Update
Last week, Genworth Financial Inc. (GNW) and China Oceanwide Holdings Group Co. Ltd. (CO) agreed to extend (again) the deadline for their proposed merger, to no later than September 30, 2020. This is now the 15th extension of the original agreement from October 2016. There are some new conditions that are part of this latest extension, which include that CO must demonstrate to GNW that it has $1.0 billion of funds available from its sources in Mainland China to fund the acquisition.
Another Florida Domestic Insurer Placed Under Regulatory Supervision
Today’s announcement that Gulfstream Property & Casualty Insurance Company (Gulfstream) was being placed under administrative supervision by the Florida Office of Insurance Regulation marks just another instance of the ongoing challenges facing the Florida property market. As ALIRT outlined in a substantial release last June, the Florida domestic homeowners’ market – which is largely comprised of small, thinly capitalized insurers – remains under significant pressure given exposure to large windstorm losses, issues surrounding assignment of benefit abuses, and spiking reinsurance rates over the past several years.
P&C Market Exposure to State Actions on Workers Compensation
Over the past several months, ALIRT Insurance Research has been tracking the Coronavirus pandemic’s impact on both the asset and liability sides of the U.S. property & casualty (P&C) insurance industry’s balance sheet.
U.S. Life Insurer Exposure to Less Liquid Bonds
Life insurers have long held a mix of assets with various liquidity profiles, from the very liquid to the nearly illiquid. Investments with the highest liquidity include investment grade bonds (especially government bonds), securities with a short remaining duration, and cash and cash equivalents . Less liquid securities include mortgage loans, below investment grade bonds, and alternative investments.
U.S. Life Insurer Exposure to Alternative (Schedule BA) Investments
Life insurance companies’ investment portfolios are heavily oriented to fixed income assets such as bonds (both “traditional” bonds and structured securities) and mortgage loans. These assets, together with policy loans and cash, comprised almost 90% of total life insurance industry investments in each of the last five years.
U.S. Life Insurance Industry NAIC Class 2 Bond Exposure
Life Insurers significantly increased their holdings of NAIC Class 2 bonds (bonds with BBB/Baa level public rating agency ratings) in the years since the financial crisis of 2008-2009
U.S. Life Insurance Industry Structured Security Exposure
In earlier client releases this spring, ALIRT detailed life insurance industry exposure to NAIC Class 2 (BBB rated) bonds, Below Investment Grade (BIG) bonds, and Mortgage Loans. In this release, we explore the life insurance industry’s exposure to mortgage-backed and asset-backed securities, which include the following:
U.S. Life Insurance Industry Below Investment Grade Bond Exposure
Below Investment Grade (BIG) bonds consist of all bonds rated BB+/Ba1 or lower. In the statutory financial statement, there are four different “Classes” of BIG bonds (and their S&P ratings):