Catholic Order of Foresters rating affirmed by KBRA, outlook stays negative

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Foresters rating & outlook

Highlights

KBRA affirmed the A- insurance financial strength rating for Catholic Order of Foresters, maintaining a negative outlook due to total adjusted capital falling 21.0% from year-end 2020 to 2025.
Despite expected earnings improvement in early 2026, surplus and total adjusted capital are projected to stay below year-end 2024 levels, keeping risk-adjusted capitalization only adequate.
Strengths include a stable recurring-premium life portfolio and improved bond quality, though challenges remain from declining membership, limited diversification, and inconsistent profitability.

Capital position remains the central concern

As reported by Kroll Bond Rating Agency, the A- insurance financial strength rating on Catholic Order of Foresters remains in place while the negative outlook is maintained. The ratings action reflects continued pressure on the insurer’s total capital position, with total adjusted capital falling 21.0% from year-end 2020 to year-end 2025.

KBRA says earnings improve in the first half of 2026, but surplus and total adjusted capital remain below year-end 2024 levels. The agency expects risk-adjusted capitalization to remain adequate, though a revision to a stable outlook would require sustained recurring earnings that can stabilize and rebuild surplus and capital after member refunds and new business strain.

Business profile supports rating despite profitability risks

Support for the rating comes from the Order’s established whole life insurance franchise, an increasingly life-oriented reserve mix and a predominantly investment-grade fixed-income portfolio. KBRA also points to growth in recurring-premium life business and a lower share of interest-sensitive liabilities, which help create a more stable earnings base and reduce exposure to interest rate spread and annuity surrender risks.

Additional strengths include improved bond credit quality, adequate liquidity, sound capital quality and minimal financial leverage, along with continued progress in governance and risk oversight. Offsetting those factors are inconsistent profitability, high-risk investment exposures relative to capital and limited access to external capital sources.

KBRA adds that Catholic Order of Foresters’ focus on the Catholic fraternal market supports member affinity but limits scale and diversification. Declining membership, concentrated distribution and exposure within the legacy annuity block to renewed rate competition remain ongoing challenges, even as annuity outflows moderate in the first half of 2026.

Geopolitical tensions and elevated fiscal spending are increasing sovereign borrowing risks as global funding costs stay high, our earlier coverage noted. The piece explained that persistent shocks can erode fiscal headroom and intensify refinancing strain, with emerging and frontier markets particularly exposed due to heavier interest-service burdens and narrower revenue bases.

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