Freemasonry is a brotherhood with a fascinating heritage, symbolism, and secrets that bind us to each other. It is truly about the dedication of one brother to another. Fortunately, we didn't get into the insurance business, and our retirement homes have been finding new ways to reach out to the public for business, or they have sold off or closed. The rest of the fraternal world has not been so lucky.
A.M. Best, an insurance rating company, has released a report that focuses on the challenges being faced by the U.S. fraternal industry, a segment of not-for-profit organizations that offer life insurance and retirement products.
According to the Best’s Special Report titled, “U.S. Fraternal Industry Facing Challenging Demographics,” A.M. Best has identified several significant challenges over the past decade that are expected to place negative ratings pressure on these fraternal benefit societies (fraternals). These issues include changing demographics, which lead to declining membership; expanding distribution; a shift toward interest-sensitive product lines; pressure on operating margins; and heightened regulatory and technology costs.
Fraternals offer life insurance and retirement products to support members and fund community support through charitable donations, volunteerism and educational support. Fraternals face some challenges that are similar to the issues facing the general U.S. life industry, namely, the need to modernize distribution systems, achieve top-line revenue growth, increase market penetration (particularly in the middle income market), and maintain relevance and appeal to younger generations.
While the rating trend generally remains stable, negative rating actions may occur for those fraternals with declining membership, lower capitalization ratios, a shifting business mix toward heightened interest sensitivity and negative earnings trends.
For a full copy of this special report, please visit:http://www3.ambest.com/bestweek/purchase.asp?record_code=238812. Sorry, but you have to sign up and pay for it.
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