Kuvare CEO: Company Will Make Guaranty Life Platform for Future Acquisitions
March 22, 2016 by Dennis Gorski, managing editor-online, BestWeek: Dennis.Gorski@ambest.com
CHICAGO – The founder of a U.S.-based company with plans to build a portfolio of midsize life insurers says its first acquisition will become the platform that leads to buying additional carriers.
Dhiren Jhaveri, president and chief executive officer of Kuvare Holdings, said he plans to close on Baton Rouge, Louisiana-based Guaranty Income Life Insurance Co., this spring. Kuvare announced the deal last October but terms were not disclosed (Best’s News Service, Oct. 28, 2015).
And, after just completing a successful round of financing from three private equity firms, Kuvare is ready to “build off the legacy and culture of Guaranty.” Kuvare announced it had secured long-term arrangements with Altamont Capital Partners, of Palo Alto, California; Makena Capital Management, based in Menlo Park, California; and Access Holdings, with offices in Baltimore and Toronto (Best’s News Service, March 10, 2016).
Jhaveri told Best’s News Service, Guaranty Income Life is an attractive first purchase because it fits his core strategy of offering fixed annuities as part of a total product solution to the underserved middle market.
Noting the middle market has as many as 70 million members, Jhaveri said, “It’s about delivering a superior product that meets the need of the middle-market customer — deliver it in a straightforward and simple manner, via the distribution channels that customers are used to interacting with.”
He sees Guaranty as Kuvare’s platform acquisition “that we can build off of and expand its capabilities and improve its delivery to the end customer over a period of time. And that will lead to the ability to acquire additional businesses and additional carriers to round out our portfolio.”
Jhaveri defines midsize companies as having book values of less than $500 million. “But we can selectively look at businesses with larger valuations if they fit the strategy of what we’re trying to build,” he noted.
He and his capital partners plan to acquire another four or five companies within the next few years. He added Kuvare might go into other insurance areas that would round out the portfolio but for now, it’s life, annuity and supplemental products in North America — “recognizing that there could be complementary businesses or additional businesses that could add capabilities to our overall platform.”
Jhaveri is “focused on the fixed-annuity side of the equation, recognizing that for the customer it makes sense to provide a total solution to them, not only with annuity products but also life insurance and supplemental products.”
Guaranty Income’s primary products are fixed annuities and combo annuities with long-term care riders, according to BestLink. The company continues to recruit marketing organizations that focus on financial planning for persons older than 50, typically in the middle- and upper-income segment, according to BestLink.
Individual annuities sales of $32.7 million comprised 88.3% of Guaranty Income’s net premium written in 2015, according to BestLink.
When the deal closes, Guaranty Life will be peeled away from Guaranty Corp., which will retain five radio stations, a real estate management firm, a senior living facility and various real estate assets.
Kuvare U.S. Holdings Inc., is a newly formed insurance holding company domiciled in Delaware, according to BestLink. In turn, Kuvare U.S. is part of a holding company based in the United Kingdom.
Guaranty Income Life has a current Best’s Financial Strength Rating of B+ (Good).
