Kilter Finance, the insurance-focused specialty financing company launched by ex-Leadenhall Capital alumni Dan Knipe and backed by private equity giant KKR, is set to invest $89 million into Independent Insurance Group LLC , the parent of life insurer Independent Life.
Knipe, who was the Deputy Chief Investment Officer at specialist insurance-linked securities (ILS) manager Leadenhall Capital Partners LLP managing the life and mortality linked investment strategies for the firm, launched Kilter Finance in April 2020.
His new company launched with a binding agreement with KKR for an investment of up to $500 million of equity funding in Kilter Finance, which it intended to use to invest in insurance-linked opportunities, predominantly in the life, annuity and health insurance sectors.
This investment in Independent Insurance Group is the first we’ve seen from Kilter Finance since its launch.
Independent Life, the life underwriting subsidiary of the Group, is seen as one of the fastest growing US life insurance companies at this time.
Kilter Finance’s $89 million investment into the Group is being made alongside a further $25 million from Independent Group’s existing shareholders, its management team and LKCM Headwater Investments.
The investment proceeds are expected to be used by Independent Insurance Group to expand its structured settlements business, increase the statutory surplus of the insurance carrier in its group, and to enable Independent Life to execute upon other critical strategic initiatives.
Michael Upchurch, Chairman and CEO of Independent Group, commented, “The Kilter Finance team demonstrated their insurance expertise and speed of execution, moving fast to quickly build up a detailed understanding of our business, and tailoring their investment to meet our needs going forward.”
Jacob Smith, General Counsel and COO of LKCM Headwater added, “We are excited to have Kilter Finance become a key capital provider alongside us, and look forward to the additional value they bring in the form of their insurance and asset management expertise and their long-term partnership approach.”
Dan Knipe, Chief Investment Officer of Kilter Finance, said, “We have been impressed by the business that the Independent Group management team has built and are excited to join LKCM Headwater Investments and management as a key capital provider to the business for the next phase of its growth.”
Charles Lens, Managing Director of Kilter Finance, also stated, “We have carefully structured our investment to provide the company with the flexibility it needs to grow, while satisfying the requirements of all of its key stakeholders, in particular its regulator, the ratings agencies, its sponsor LKCM Headwater Investments and its management team led by Michael Upchurch.”
Independent Life focuses exclusively on the primary issuance of structured settlement annuities, a high-growth area of the life and health insurance marketplace.