KBRA Affirms Rating for Trusted Fraternal Life
26 Nov 2025 | New York
KBRA affirms the A insurance financial strength rating for Trusted Fraternal Life ("TFL" or "the Society"). The Outlook is Stable.
Key Credit Considerations
The rating reflects TFL’s strong capital adequacy, stable profitability, and disciplined operating and financial management. The Society maintains a robust balance sheet, with its company action level risk-based capital (CAL RBC) ratio consistently above 500%, supported by solid earnings retention, conservative investment practices, and the absence of financial leverage. Capital formation has been driven by consistent operating profitability and merger-related scale efficiencies, while TFL continues to demonstrate strong liquidity and prudent asset-liability management. The investment portfolio remains high quality, with approximately 99% of bonds rated investment grade and limited exposure to higher-risk assets.
Profitability remains sound, underpinned by a balanced mix of life and annuity reserves and favorable spread management. Net gain from operations improved to $14.1 million in 2024, supported by higher investment yields, disciplined expense control, and merger synergies. Lapse rates remain low, reflecting strong persistency and effective member retention practices. TFL’s Enterprise Risk Management framework and governance processes are well developed, supporting risk identification, capital planning, and strategic decision-making across the organization.
Balancing these credit strengths are execution risks associated with ongoing system modernization and merger integration, exposure to disintermediation risk in the annuity block, and competitive pressures within the fraternal and broader life insurance markets. Organic membership growth remains limited, consistent with industry trends, though the Society’s Family of Brands strategy and expanded independent distribution channel have helped sustain overall growth and market relevance.
Rating Sensitivities
Factors that could positively impact the rating include sustained growth in earnings and surplus supported by stable spreads and disciplined expense control, continued strengthening of capitalization with an RBC ratio maintained well above target levels, effective execution of merger and modernization initiatives, and demonstrated operating efficiency and diversification.
Factors that could negatively impact the rating include a material weakening in asset quality or capitalization, a sustained decline in earnings from spread compression or higher expenses, operational or execution challenges tied to integration or system modernization, increased disintermediation activity affecting spreads and liquidity, or failure to maintain governance and risk management standards appropriate for the company’s expanded scale.
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