Financial Highlights

One of the things that makes our insurance so popular is our well-deserved reputation for paying out high dividends. Last year, we paid more than $364 million to our insured members. Why do we pay out so much in dividends? Because Knights of Columbus insurance is a program designed by brother Knights for brother Knights.

At a time when many financial institutions have struggled, to put it mildly, our insurance program stands out stronger than ever because of its soundness and prudent, professional management of our assets.

For the 16th consecutive year, Standard & Poor’s has given us their highest rating of AAA. When A.M. Best reaffirmed our top ranking of A++ (Superior) for the 33rd consecutive year in June, they credited our “superior risk-adjusted capitalization” and “the Order’s consistently positive statutory operating results.”
Since our meeting in Nashville last year, the financial industry has been shaken by the terrible shock of the sub-prime mortgage disaster, pulling some companies under, and badly weakening others. But we have had none of those problems. Why? Because these kinds of investments simply do not meet our ethical standards. We put the welfare of our brother Knights and their families first. We intend to keep our commitment to protect the financial well-being of our brother Knights and their families now and for decades to come.

We invested more than $7 million every day in 2007, and did it with great skill and success. About 87 percent of our $14 billion in assets are invested in bonds. For the fourth year in a row, we have been able to increase the yields on newly purchased bonds, by an overall average of 1.4 percent higher than in 2003. The increase has not been at the expense of quality – our bond purchases in 2007 had an average rating of AA, up slightly from last year’s AA-. And once again, we have no issues in default.

A relatively small portion of our investments are in equities, around $330 million at the end of 2007. We have reduced our holdings in stocks slightly, and shifted what we do have toward preferred stocks, which are safer and pay higher dividends. They’re also less volatile, which is an important consideration at a time when equities markets have suffered significant volatility.

We continue to invest in carefully selected real estate. Our very diversified portfolio of properties produces a combined yield of more than 10%. Our ChurchLoan program, which has provided mortgages to churches since 1896, presently has about $120 million in outstanding loans, including eight new ChurchLoans made last year. We continue to welcome the opportunity to serve dioceses and parishes in this way.

Our investment income during 2007 reached $772 million, an increase of 4.7 percent over the previous year.

Although demand for high quality bonds has put downward pressure on rates, our total portfolio yield last year was 5.75 percent. Our earnings this year reached nearly $419 million, up 2.1 percent from last year. Our surplus climbed to $1.75 billion, up 4.1 percent from the year before.

Unlike so many other companies, the Knights of Columbus is financially stronger today than it was one year ago.