APRIL 21, 2020, MergerMarket.com
Kuvare, a private equity-backed insurance firm, continues to look for US-based life and annuity insurance targets amid strong customer demand for safe investment options, said Dhiren Jhaveri, CEO and founder.
The COVID-19 outbreak has boosted demand for multi-year guarantee annuities and fixed indexed annuities as customers seek more stable options, Jhaveri said. He declined to give specific financial figures. Chicago-based Kuvare generated about USD 800m in new premiums in 2019, and expects to see consistent premium growth in 2020, he said.
The goal for M&A is to continue expanding distribution channels and product capabilities in life insurance and annuities, Jhaveri said. The sweet spot for targets is USD 500m to USD 10bn in reserves, mirroring what he told this news service in July 2019.
M&A related talks haven’t diminished due to the pandemic, but both buyers and sellers are cautious in this environment, Jhaveri said. Buyers are focusing on evaluating risk and sellers want to make sure they get the appropriate value.
Through both M&A and organic growth, Kuvare wants to expand distribution through financial institutions such as banks, broker-dealers and registered financial advisors, as well as independent marketing organizations and personal producing general agencies, the CEO said.
In terms of product capabilities, Kuvare wants to expand in fixed annuities, fixed indexed annuities, whole life insurance, universal life insurance and indexed universal life insurance, he said.
Kuvare, through its affiliates Guaranty Income Life Insurance (GILICO), United Life Insurance and Kuvare Life Re, sells annuities and life insurance products to middle-income consumers, and partners with other insurers to provide reinsurance services.
Jhaveri said valuations will be impacted by the coronavirus pandemic, but it’s hard to speculate when this will happen or the potential magnitude. Kuvare typically pays cash for acquisitions and plans to continue that strategy, he said.
Kuvare “has a strong balance sheet and a strong liquidity profile” that will allow the business to grow for multiple decades, Jhaveri said.
Kuvare, founded in 2015, received investments from Altamont Capital Partners, Makena Capital Management and Access Holdings in March 2016, according to a press release. Jhaveri declined to comment on the company's ownership structure.
Kuvare sometimes directly approaches targets and sometimes works with their sell-side advisors. It has used J.P. Morgan Securities, RBC Capital Markets and Sandler O'Neill & Partners (now Piper Sandler) for financial advisory and has worked with Sidley Austin, Debevoise & Plimpton, and Jones Walker for legal counsel, Mergermarket data show.
by Xinyi Jiang in Charlottesville, Virginia