2022 Financial Update

In 2022, GBU Life (GBU) was able to enhance its finance capabilities with an eye toward both the present and the future in an increasingly complex economic environment. We continue to build on our core strategies that have enabled GBU to maintain its strong financial position and provide the security that our members deserve.

GBU exceeded $500 million in premiums for the first time in 2022. This is a great accomplishment; however, it comes with the obligation to comply with two additional regulations.

The first of these regulations is called Own Risk and Solvency Assessment (ORSA). An ORSA is an internal process undertaken by an insurer to assess the adequacy of its risk management in addition to its current and prospective solvency positions under normal and severe stress scenarios. An ORSA will require us to analyze all reasonably foreseeable and relevant material risks (i.e., underwriting, credit, market, operational, liquidity risks, etc.) that could have an impact on our ability to meet our member obligations. This requirement must be done annually beginning in 2023.

The second regulation, Section 16 of the Model Audit Rule, requires management to file a report on our internal controls over financial reporting. This regulation is similar in nature to the Sarbanes-Oxley regulations required of publicly owned corporations. The required report will need to be filed annually with the first filing due in conjunction with the filing of 2024 audited financial statements.

GBU is well positioned to comply with these regulations. We added a director of enterprise risk management to our finance team in 2022 in anticipation of the need to comply with these regulations. The work required to comply with these regulations is well underway and will further enhance our ability to foresee, understand and mitigate the risks that are inherent in the insurance industry. The end result of GBU’s compliance with these new regulations is to take the overall strength of our society to a higher level.

Omitted for Rounding)

Mark Cloutier Chief Financial Officer

GBU’s 2022 statutory financial results continue to reflect our strong operating performance and the ability to build on our strong financial position. Assets increased 11.2% to $4.2 billion, while our liabilities increased similarly 11.4% to $3.9 billion. Reserves for annuity contracts made up $3.6 billion of the liabilities supported by investment in bonds of $4.0 billion. Our surplus remained very strong at $288.8 million, an increase of 8.5%. GBU’s current solvency ratio is 107.4%. This means for every $100 of liabilities, there is $107.40 of assets.

Net income from operations for 2022 was $32.5 million, which was $6.1 million higher than for 2021. Total revenues for the year were $768.1 million, an increase of $120.4 million over the 2021 figure; this increase was driven by strong annuity sales. GBU continues to have an exceptional cash flow from operations. For 2022, cash flow from operations was $426.1 million, an increase over the 2021 total, which was $349.9 million.

As we move into the future, GBU management will continue to prudently grow our society and expand the programs available to our members for their community development efforts while strengthening our already solid foundation. We are proud to deliver sound, consistent value as a conservative steward of our members’ wealth during these turbulent economic times. We thank you for your trust.

DEVELOP YOUR FINANCIAL PLAN

DEVELOP YOUR FINANCIAL PLAN