As Chief Financial Officer, part of my role is to help ensure GBU Life remains financially strong, provides good value to its members and is able to meet future benefit obligations. Our management team achieves those goals by maintaining a solid capital position and managing the risks inherent in a fraternal benefit society that has life insurance and annuity products at its core. I am happy to report that GBU Life made substantial progress in strengthening its already strong financial position in 2025, and that momentum has continued into 2026.

In addition to our management team, our financial strength is also reviewed by regulators and rating agencies such as AM Best. GBU Life’s AM Best rating remains “A-” (Excellent). The Pennsylvania Department of Insurance, our primary regulator, measures capital strength using the Risk-Based Capital (RBC) ratio, which is also one of our key financial measures. A higher RBC ratio means a stronger financial position relative to risks incurred.

Changes in the economy, including a sharp rise in interest rates, are risks that can affect our RBC ratio. In 2022, interest rates in the marketplace rose sharply over several months. This phenomenon introduced more risks on every insurance company’s balance sheet, including our own. Reinsurance is a common tool we can use to help manage that impact and support GBU Life’s financial strength, through the reduction of risk on our balance sheet.

In 2025, GBU Life completed an important reinsurance agreement that improved our capital position. As shown in the table below, our RBC ratio declined from 802% in 2021 to 635% in 2024. During the same period, GBU Life’s Total Adjusted Capital increased, however the regulatorily required Authorized Control Level Risk-Based Capital grew at a faster pace. While an RBC ratio of 635% was still strong, it was important to reverse the downward trend. The 2025 reinsurance agreement helped achieve that goal, increasing our RBC ratio to 775%, its highest level since 2021. Looking ahead, we expect to maintain a strong capital position.

Overall, the table shows that while our capital requirements have grown in recent years, we have taken the necessary steps to strengthen our capital position to protect our members.

In 2025, GBU Life reported a net loss on its statutory Statement of Operations of $47.4 million, primarily related to the conservative nature of statutory accounting treatment of the reinsurance agreement. Most importantly, the agreement strengthened our overall financial position, helping us for the future.

Here’s why:

• The agreement reduced the amount of risk we carry.
• This lowered our required capital by more than the decrease in our total capital.
• Over time, the agreement is expected to generate income that will offset the initial loss.

Simply put, we made a strategic decision in 2025 that improves GBU Life’s long-term financial strength. Importantly, while the 2025 reinsurance agreement transferred certain risks, it did not change anyone’s membership status. All GBU Life members will remain GBU Life members.

Other key financial metrics from 2025 include the following:

• GBU Life’s Total Assets grew to $ 5.2 billion as of December 31, 2025, compared to $4.7 billion as of December 31, 2024. GBU Life is the fifth largest fraternal benefit society in the country.
• Total sales reached $906.7 million in 2025, a 13% increase from $802.1 million in 2024. Sales growth continues in 2026, and membership grew to 74,618 as of December 31, 2025.

Our management team introduced a new general ledger system to improve how we manage financial information and support better decision-making. We also strengthened our finance team by adding a Vice President of Finance and a Chief Actuary role to supplement the utilization of our external consulting actuaries. These changes will continue to strengthen our ability to evaluate risk and continue to improve GBU Life’s capital management.

Looking ahead, GBU Life continues to capitalize on many opportunities to grow and serve members even better. Our management team continues improving our systems and processes to better serve current and future members. We have launched an initiative to strengthen key parts of GBU Life, including our technology infrastructure, products, distribution, and service. These improvements will help us grow efficiently and improve profitability over time. To support this work, we will make investments in 2026 and 2027 that may temporarily reduce net income, but we believe it will help position GBU Life for long-term success and keep our Risk-Based Capital level at an appropriately strong level.

Thank you for your continued membership and for the trust you place in us. As we celebrate GBU Life’s 134th year as a fraternal benefit society, we remain focused on protecting our members, supporting the communities we serve, and strengthening GBU Life for future generations.