S&P says K of C top rating based on “extremely strong capital and liquidity”
(NEW HAVEN, CT)—Standard & Poor’s has once again given the Knights of Columbus its top rating of “AAA,” based on “the Society’s extremely strong capital, very strong competitive position, historically strong profitability, and extremely strong liquidity.” This is the 19th consecutive year in which S&P has rated the
Knights of Columbus AAA. The action comes just a few weeks after another ratings agency, A.M. Best, gave the Knights of Columbus its highest rating (A++) for the 36th consecutive year. Knights of Columbus products include term and whole life insurance, annuities, long-term care insurance and disability insurance.
The S&P report, dated July 22, 2011, noted that the KofC “has a distinct competitive advantage within the Catholic community, characterized by an affinity relationship between the Society and its policyholders.” It added that the loyalty of the customer base “is reflected in its lapse ratio (3.6% in 2010), which is typically among the lowest in the industry.”
S&P reported that “KofC’s operating performance rebounded in 2010 with a 6% increase in investment income and about a 10% increase in revenues.” It said that the “extremely strong” Knights of Columbus liquidity ratio of 241% reflects “an asset portfolio that consists primarily of high-quality, investment-grade bonds.”
Standard & Poor’s described the Knights of Columbus financial strategy as “very conservative, as demonstrated by its capital structure, investment portfolio, and approach to business growth,” and it said that the KofC capital adequacy “is among the strongest in the industry.” The company’s “investment portfolio has very strong credit quality,” S&P declared.
S&P said that the Knights of Columbus “strong profitability is attributable, in our view, to high persistency rates, conservative underwriting practices, moderate expenses, and good investment returns.”
Supreme Knight Carl A. Anderson welcomed the news from Standard & Poor’s, saying that it “reflects our success in maintaining the highest standards in every area, in good times and bad. We have high-quality, low-cost insurance products; a dedicated, highly professional sales force; and an approach to investing that is both careful and consistently successful. For us, the well-being of our members and their families is our highest priority, just as our founder, Father Michael McGivney, intended.”
The Knights of Columbus is the world’s largest Catholic fraternal society, with more than 1.8 million members on three continents. Last year, Knights of Columbus donated more than $154 million and 70 million volunteer hours to charity.