Press Release|Insurance
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KBRA Affirms Rating for Modern Woodmen of America

28 Sep 2026   |   New York

Contacts

KBRA affirms the AA- insurance financial strength rating (IFSR) for Modern Woodmen of America (“Modern Woodmen", or “the Society”). The Outlook is Stable.

Key Credit Considerations

The rating reflects Modern Woodmen’s very strong risk-adjusted capitalization, high-quality capital, strong liquidity, and stable operating performance. Surplus increased to a record $3.10 billion at June 30, 2026, while the year-end 2025 company action level (CAL) risk-based capital (RBC) ratio was approximately 535%. The Society carries no surplus notes or capital market debt. Its core fixed income portfolio remains high quality, with approximately 96% of rated securities classified as investment grade. Operating earnings remain resilient, supported by higher portfolio yields and increased net investment income, while life insurance in force increased to approximately $46.4 billion amid stronger life production. Modern Woodmen’s established career agency distribution platform and mature risk management practices are additional strengths supporting the rating.

Balancing these strengths are the Society’s continued concentration in annuities, which represented approximately 65% of reserves at June 30, 2026, leaving earnings and capital sensitive to investment spreads, interest rates, and policyholder behavior. Membership continues to decline despite stronger life production, while execution risk remains around initiatives intended to expand distribution, develop products, and modernize technology. Exposure to equities, alternative investments, and agricultural lending also adds investment and earnings volatility, although these risks remain manageable in the context of Modern Woodmen’s capital and liquidity.

Rating Sensitivities

A positive rating action could result from sustained life premium growth and stabilization of membership trends, improved field force retention, continued execution of strategic initiatives without materially weakening operating performance, or a meaningful reduction in annuity concentration and interest-rate sensitivity while maintaining very strong capitalization, liquidity, and investment quality.

A negative rating action could result from material deterioration in capital adequacy, a substantial or sustained decline in operating earnings capacity, accelerated membership decline or weaker field force retention, or a material adverse shift in Modern Woodmen’s investment, liquidity, or ALM risk profile.

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.

Doc ID: 1017181