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CFO REPORT

Tim Demetres
Chief Financial Officer

2025 Financial Results

arket interest rates significantly affect consumer behavior and investing strategy.
When markets are highly volatile investors tend to lean toward more conservative
investments such as fixed annuities; preserve principal with fixed returns. Follow-
ing a period of high inflation, ongoing tariff negotiations, and it being a presidential
M election year, market rates fell within a more predictable range. Further, the Fed an-
nounced three rate cuts beginning in September 2025. As a result, our members opted to stay the
course. GCU also attracted and grew its membership base. As seen in the expense comparisons,
we are investing in our people and new technologies. These investments will enhance our mem-
ber service experience, modernize internal systems, and enable new product offerings in 2026
and beyond. Our technological initiatives will improve the way our members interact with GCU
and provide an easier way of doing business between us. We have undertaken these initiatives
and maintained our financial strength as evidenced by the solvency ratio at 109+%. In addition,
AM Best and KBRA have affirmed our A- financial strength ratings.

GCU’s total assets increased $12.2 million to $2.8 $99 million compared to $496.8 million in 2024. Life and
billion and surplus decreased $10.8 million from the net annuity sales, including conversions, decreased $100.8
loss for the year and the increase in the asset valuation million year over year. Net investment income increased
reserve. Total adjusted capital decreased by $5.5 million. $2.3 million from higher alternative asset distributions.
Since 1892, we remain focused on serving the communi- Operating expenses, before the increase in reserves,
ty and meeting the financial needs of our members. totaled $387.1 million in 2025 versus $422.9 million in
Highlights of 2025 2024. In 2024, GCU disbursed $6.0 million more in an-
nuity benefits due to death claims, and surrender activity.
Income (loss) before net realized capital gains (losses) Annuity exchanges decreased $40.8 million from more
totaled ($9.4) million in 2025 compared to ($8.3) million members opting to stay with their current contracts. Gen-
reported in 2024. The gain from operations was lower in eral insurance expenses were $2.1 million higher in 2025
2025 primarily due to increasing crediting rates on mem- when compared to 2024 primarily from investing in new
ber annuity contracts and strengthening annuity reserves. hires and staff salaries, technology and cloud services,
Net income (loss) after realized capital gains (losses) was and other. Pension expenses decreased $699 thousand
($6.5) million in 2025 compared to ($4.9) million in 2024. due to lower retirements in 2025.
We had $3.1 million in net realized capital gains from ex- The increase in reserves totaled $20.2 million in 2025
pired in-the-money call options and recovery of a previous- compared to $82.2 million in 2024. Reserves generally
ly impaired mortgage loan. increase from premiums received and interest accumu-
Total Assets increased $12.2 million mostly due to rec- lation offset by decreases from death claims and annuity
ognizing $11.9 million negative IMR as an admitted asset benefit payments. We strengthened annuity reserves by
in 2025. In 2025, we successfully rebalanced over $300 $2 million based on actuarial testing results.
million of long dated corporate credit securities to govern- Surplus decreased $10.8 million to $196.1 million in
ment agency residential mortgage-backed securities. 2025 compared to $207.0 million at year-end 2024. The
Liabilities grew $23 million to $2.598 billion in 2025 decrease in surplus primarily reflects the $6.5 million net
compared to $2.575 billion at year-end 2024. Life and loss for the year and the $5.3 million increase in the AVR.
annuity reserves increased $19.8 million along with a GCU Holding Company and Subsidiaries had a $0.3 mil-
$5.4 million increase in the asset valuation reserve (AVR lion increase in net equity.
- a reserve for future credit losses). The interest mainte- Total Adjusted Capital (TAC) was $239.4 million at De-
nance reserve (IMR – an interest related reserve for de- cember 31, 2025. TAC starts with surplus of $196.1 mil-
ferring realized investment gains and losses) decreased lion and adds back the asset valuation reserve of $43.2
$13 million to $0.
Total Income in 2025 was $398.0 million, a decrease of CONTINUED ON PAGE 9

6 GCU MAGAZINE MAY 2026