Case Study

Key Details

Status: Current Industry: Insurance

Theme: Shifting Demographic (Aging Baby Boomers)

Initial Investment: 2016

Add-On Acquisitions: 6

Headquarters: Chicago, IL

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Incoming Thesis Highlights
Based on Access Holdings’ macro driven investment strategy, Access identified several industries that would be positively impacted by the ageing Baby Boomer demographic. Through careful examination and analysis, Access saw opportunity in the insurance industry, specifically the life and annuity industry with products supporting retirees and family security.

The industry displayed multiple key investment characteristics:

  • Demographic-driven growth in life insurance and annuity products
  • Unique positioning within the insurance industry landscape
  • Numerous value drivers to generate growth
  • Fragmented industry (750+ U.S. life insurance operators)
  • Consolidation opportunities within the market to quickly scale the platform
  • High barriers to entry in a highly specialized product

Access identified Kuvare as an attractive investment opportunity and completed the acquisition of the company in 2016. Kuvare offered Access an opportunity to acquire a strong, scalable platform from which to execute its strategy for the insurance industry.

Value Creation
Over the investment period, Access has worked with Kuvare management to execute on the identified value creation initiatives at the company to drive growth and expand the product portfolio.
  • Improved Asset Management and Spreads: Through the Kuvare management team’s prior experience and relationships from Sammons and Guggenheim, Kuvare was able to improve the net investment yield at GILICO and increased the spread between the rate earned on its investment book and credited to the policy holders by 75 bps.
  • Improved Product Distribution: Kuvare was able to quickly ramp up production of new premiums at GILICO through enhanced products and distribution relationships, while the spread on those products increased.
  • Operational Improvements: Kuvare incorporated proven technologies into its operational capabilities to improve speed to market, ability to sell and service new and existing products, scale quickly, and optimize the company’s service model.
  • Execution of Acquisitions: Since investing in Kuvare in 2016, six acquisitions have been completed creating the 70th largest life insurance company in the country, not including the assets and capital of two of the company’s reinsurance vehicles.
  • Creation of an Offshore Reinsurance Vehicle: With Access’ support, Kuvare created an offshore reinsurance vehicle, Kuvare Life Re, during year one of operations. This vehicle gives Kuvare greater operational, acquisition, and structural dexterity as the company continues to grow and scale its business.
  • Creation of an Asset Advisory Business: As part of the initial structuring of the Kuvare platform investment, Access and its co-investors created a separate operating entity — Kuvare Insurance Services — that provides the Kuvare platform investment with strategic, acquisition, and advisory services.

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