Catholic Financial Life will be the flagship brand of Trusted Fraternal Life, a new entity that will aim to help the Milwaukee-based company make good on its vision to be the innovative leader in fraternal partnerships and consolidation.
“Creating Trusted Fraternal Life leverages our track record of merger success and financial strength with a unique approach to consolidation,” said
John Borgen, president and CEO of Catholic Financial Life. “It also provides an opportunity to invest in diverse brands for organic growth and greater charitable impact.”
Initially, Trusted Fraternal will have two brands, Catholic Financial Life and Degree of Honor. The latter was acquired by Catholic Financial Life in 2017. Borgen said the plan would be for additional acquisitions or partnerships to add to the family of brands.
“That will create economics of scale that in turn we can reinvest in organic growth and charitable impact, simultaneously helping more people to enjoy financially secure, purposeful lives,” Borgen said. “So yes, in time, that is the vision we seek to fulfill.”
He noted that the Catholic Financial Life’s board set a vision in 2017 for the company to be a leader in industry consolidation. Borgen said the U.S. has gone from around 2,200 life insurance companies in 1990 to around 700. The number of fraternal life insurance companies has dropped from around 100 to about 70 over the same period. The decision to establish Trusted Fraternal was the result of a two-year board process looking at the best ways to realize the 2017 vision.
“This is not about growth for growth’s sake,” Borgen said. “We say ‘no’ to organizations more than we say ‘yes.’ We are not in the business of using our members’ money to bail out failed organizations.”
He pointed out the company has set records for its own financial strength in recent years, putting it in a position to be an industry leader.
“We’ve been growing organically year-over-year, so we didn’t have to do this,” Borgen said. “We chose to do this because of the opportunity that we see in front of us to continue to be that leader in the fraternal sector.”
The decision to establish a family of brands approach instead of consolidating under a single name was partially aimed at allowing members of other fraternal organizations to keep their connection to a brand they likely have a strong affinity with.
“There’s a great deal of history, tradition and pride in honoring our past, and people don’t want to lose that. There’s a reason that persistency among fraternals is among the highest in the country,” Borgen said.
“(Trusted Fraternal) helps members of other organizations write the next chapter in their story,” Borgen said. “It helps them realize the necessary economies that you have to have in order to compete, but that doesn’t mean that it’s the last chapter in the book. It means that it’s a new chapter, introducing a new era.”
The economies of scale potentially created under the family of brands approach include an ability to invest in people, technology, financial strength and capacity to fulfill a charitable mission, Borgen said.
“These promises that we make today, we make good on 30, 40, 50, 70 years into the future,” he added. “In order to make good on those promises, in the case of fraternals, you have to do two things. You have to run a very smart business operation, insurance business, and you have to legitimately pursue and fulfill your charitable mission. You have to do both.”
As for when other brands will join the new entity through an acquisition or where the company is in its corporate development process, Borgen pointed out Catholic Financial Life has had a stated vision to be an innovative leader in consolidation since 2017.
“I’m always talking to people, but today we’re announcing the creation of Trusted Fraternal Life,” he said.
