Press Release|Insurance

KBRA Affirms Ratings for Baltimore Financial Group, Inc. and Baltimore Life Insurance Company; Changes Outlook to Negative

22 Jul 2026   |   New York

Contacts

KBRA affirms the Issuer Rating for Baltimore Financial Group, Inc. at BBB- and the Insurance Financial Strength Rating for Baltimore Life Insurance Company at A-. The Outlook for both ratings is Negative.

The revision of the Outlook to Negative from Stable reflects renewed pressure on operating profitability, continued declines in capital and surplus, uncertainty regarding the company’s reinsurance profile over time, and generational turnover within the executive leadership team without direct replacements that is expected to reduce expenses but could also create resource constraints. The Negative Outlook acknowledges BLIC’s ability to maintain its CAL RBC ratio within a narrow range near 400%, its high-quality investment portfolio, relatively low-risk product profile, diversified distribution model utilizing both career and independent agents, and ERM program, which remains adequate for its risk profile. Management is pursuing restructuring initiatives to reduce compensation and benefits expense, as well as acquisition, maintenance and overhead costs. The effectiveness of these initiatives will depend on whether projected cost savings are realized without adversely affecting operations. Management is also pursuing additional reinsurance arrangements to alleviate new business strain, support growth, and improve profitability.

The ratings reflect Baltimore Life Insurance Company’s (BLIC) high-quality investment portfolio, lower risk product profile with a balanced reserve mix, high quality of capital, and a diversified distribution model utilizing both career and independent agents. Its ERM program continues to mature. Balancing these strengths are continuing declines in surplus, pending generational turnover in the leadership team, challenges to operating profitability, strong competition in key product lines, and exposure to interest-sensitive business, albeit on products not prone to mass surrenders. Management recently secured the amendment of one reinsurance treaty to support growth on one product line and is seeking other reinsurance to support its annuity front initiative. Management is pursuing restructuring initiatives, including layoffs of 10% of the workforce in April 2026, not replacing departing executives with direct replacements, and developing initiatives to reduce acquisition, maintenance, and overhead expenses.

Factors that could positively impact ratings include sustained, material increases in risk-adjusted capitalization; sustained, material improvement in operating earnings and profitability; increased operating scale; and material positive variance to financial projections provided to KBRA.

Factors that could negatively impact ratings include declining risk-adjusted capitalization, sustained deterioration in operating profitability, material deterioration in the company’s risk profile, failure to achieve financial projections provided to KBRA, material realized investment losses, a shift toward less creditworthy or higher-risk products, loss of key business or distribution partners, and inability to successfully execute the leadership transition.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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