New $400M Team to Invest in Insurance Company Debt

By Allison Bell

News March 02, 2023 at 11:21 AM

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An asset manager is teaming up with a big annuity issuer to lend money to borrowers in the insurance industry.

The asset manager, Hudson Structured Capital Management, will use $400 million from Security Benefit Life Insurance Company to start the effort, the HSCM Insurance Credit Strategy.

Rachel Bardon, the chief investment officer for the strategy, said insurance debt is a good investment because the default risk is relatively low and the returns are high due the complexity of the arrangements.

What It Means

Cash is still flowing into efforts to create and strengthen your clients' insurance policies and annuities.

The Companies

Hudson Structured Capital Management is a Stamford, Connecticut-based alternative asset manager with about $4 billion in capital commitments and assets under management.

It's managing the new insurance credit strategy through its HSCM Bermuda, which is based in Pembroke, Bermuda.

Security Benefit is a life and annuity issuer with $48 billion of assets under management.

The History

HCSM Bermuda joined with Security Benefit Life to provide a $150 million, 10-year term loan credit facility for White Mountains Insurance Group in March 2022.

The New Arrangement

The new insurance credit strategy will originate and invest debt issued by reinsurers, insurance distributors and insurance service companies as well as by insurers, according to Hudson Structured Capital Management.

The company said it's especially interested in working with small and mid-size insurers, which have been underserved by traditional sources of financing.

Security Benefit's headquarters in Topeka, Kansas. (Photo: Security Benefit)

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