Citizens (CIA) risk factors, FY2025 10-K

Citizens's FY2025 10-K, filed Mar 12, 2026, lists 25 risk factors in 5 groups. Against the prior year's 25: 4 new, 4 dropped, 9 substantially reworded.

Open CIA in Gloom →
Citizens' chart, financials and news, free in your browser.Open CIA in Gloom →
Risk factors listed
255 groups
New this year
4vs 25 last year
Dropped
4since the prior 10-K
Substantially reworded
9of those kept
Section length
8k wordsItem 1A

What the changes say

  • International direct premiums decreased from approximately 67% to 64% of total direct premiums.
  • New risks highlight exposures to mature endowment surrenders, long-duration contract accounting changes, and macroeconomic volatility.

What changed since the prior 10-K

New

  • NewINTERNATIONAL BUSINESS RISKS

    Inadequate claims processes, training, technology, or fraud detection—or higher fraudulent activity—could increase costs, trigger litigation or fines, and harm our reputation

    Inadequate claims processes, training, technology, or fraud detection could increase expenses and trigger litigation or regulatory fines.

  • NewINTERNATIONAL BUSINESS RISKS

    surrenders of policies that no longer remain subject to surrender charges. These changes in surrender activity may result in remeasurement gains or losses which could increase volatility in our results of operations

    Unanticipated lump sum distributions on maturing endowment products could create liquidity risks forcing asset sales or third-party financing.

  • NewFINANCIAL RISKS

    Targeted improvements to accounting for long‑duration contracts (LDTI) may increase earnings volatility and reporting complexity

    Long-duration targeted improvements accounting rules require frequent assumption unlocking and discount-rate updates, increasing earnings and OCI volatility.

  • NewFINANCIAL RISKS

    ADVERSELY AFFECT OUR REVENUES, OUR RESULTS OF OPERATIONS AND OUR FINANCIAL CONDITION

    Inflation, recessions, or declining equity markets could reduce premium sales, increase surrenders, and cause investment portfolio credit losses.

Dropped

  • DroppedINTERNATIONAL BUSINESS RISKS

    Policyholder claims is one of our largest expenses. Mismanagement of claims handling or increased fraudulent claims could negatively impact our costs and financial condition

  • DroppedINTERNATIONAL BUSINESS RISKS

    Higher than expected policyholder claims related to unforeseen events may negatively impact our premium revenues and increase our benefits and expense costs, thus negatively affecting our financial condition

  • DroppedFINANCIAL RISKS

    INVESTMENT INCOME IS A MATERIAL PORTION OF OUR TOTAL REVENUES. CHANGING FINANCIAL CONDITIONS SUCH AS MARKET VOLATILITY, CHANGES IN INTEREST RATES, OR INFLATION MAY ADVERSELY AFFECT OUR REVENUES, OUR RESULTS OF OPERATIONS AND OUR FINANCIAL CONDITION

  • DroppedFINANCIAL RISKS

    increase in surrenders and lapses, which would cause a decline in our premium revenue or increase in benefit expenses paid out

Reworded

  • 82% rewrittenINTERNATIONAL BUSINESS RISKS

    Lower than expected policyholder retention can negatively affect our business operations and liquidity

    Changed heading and wording regarding policyholder surrender activity and liquidity risks.

  • 55% rewrittenINTERNATIONAL BUSINESS RISKS

    We face significant competition for customers and distributors in our international markets. If we are unable to compete effectively in these markets, our business, results of operations and profitability may be adversely affected

    Updated competitor descriptions to explicitly mention trust advantages for local carriers.

    Was: We face significant competition in our international markets. If we are unable to compete effectively for customers or distributors in these markets, our business, results of operations and profitability may be adversely affected

  • 49% rewrittenFINANCIAL RISKS

    A ratings downgrade or other negative action by a rating agency could materially affect our business, financial condition, and results of operations

    Changed the rated subsidiary entity from CICA Domestic to CLOA for A.M. Best financial strength reviews.

  • 44% rewrittenCYBERSECURITY AND TECHNOLOGY RISKS

    Our failure to maintain effective information systems could adversely affect our business

    Updated information systems risk to remove specific mention of issuing policies in the policyholder administration description.

  • 42% rewrittenINTERNATIONAL BUSINESS RISKS

    Our sales to residents of foreign countries expose us to unknown risks related to foreign regulation, foreign currency restrictions, and political instability. A significant loss of sales in these foreign markets would have a material adverse effect on our results of operations and financial condition

    Updated foreign direct insurance premium concentration from approximately 67% as of December 31, 2024 to 64% as of December 31, 2025.

  • 37% rewrittenINTERNATIONAL BUSINESS RISKS

    Pricing accuracy depends upon our ability to project future losses based on historical loss experience, adjusted for known trends

    Slightly reordered wording regarding cost of sales and payment of policy benefits within pricing adequacy conditions.

  • 29% rewrittenINTERNATIONAL BUSINESS RISKS

    We face a greater risk of money laundering activity associated with sales derived from residents of certain foreign countries

    Added a specific mention of Venezuela as one of the top international markets identified by the U.S. regarding money laundering.

  • 26% rewrittenINTERNATIONAL BUSINESS RISKS

    The Company’s success depends on its ability to accurately underwrite risks in order to charge adequate premiums to policyholders

    Retained core underwriting risks for health and simplified underwriting processes without substantive textual changes.

  • 23% rewrittenRISKS RELATED TO HOLDING OUR SECURITIES

    Applicable insurance laws in the jurisdictions where our insurance subsidiaries are domiciled may discourage takeovers and business combinations that our shareholders might consider to be in their best interests

All 25 risk factors

Headings as the filing states them, in filing order.

INTERNATIONAL BUSINESS RISKS

  1. 01A SUBSTANTIAL PORTION OF OUR REVENUE IS GENERATED FROM INSURANCE PRODUCTS SOLD OUTSIDE OF THE UNITED STATES, WHICH SUBJECTS US TO SEVERAL RISKS
  2. 02Our sales to residents of foreign countries expose us to unknown risks related to foreign regulation, foreign currency restrictions, and political instability. A significant loss of sales in these foreign markets would have a material adverse effect on our results of operations and financial condition42% rewritten
  3. 03We face significant competition for customers and distributors in our international markets. If we are unable to compete effectively in these markets, our business, results of operations and profitability may be adversely affected55% rewritten
  4. 04We face a greater risk of money laundering activity associated with sales derived from residents of certain foreign countries29% rewritten
  5. 05Pricing accuracy depends upon our ability to project future losses based on historical loss experience, adjusted for known trends37% rewritten
  6. 06The Company’s success depends on its ability to accurately underwrite risks in order to charge adequate premiums to policyholders26% rewritten
  7. 07Inadequate claims processes, training, technology, or fraud detection—or higher fraudulent activity—could increase costs, trigger litigation or fines, and harm our reputationNew
  8. 08Lower than expected policyholder retention can negatively affect our business operations and liquidity82% rewritten
  9. 09surrenders of policies that no longer remain subject to surrender charges. These changes in surrender activity may result in remeasurement gains or losses which could increase volatility in our results of operationsNew
  10. 10Reinsurance may not be available or affordable, or reinsurers may be unwilling or unable to meet their obligations under our reinsurance contracts, which may adversely affect our results of operations or financial condition
  11. 11Sales of our insurance products could decline if we are unable to establish and maintain relationships with independent marketing agencies, independent consultants and agents
  12. 12Because we sell our products through independent agents, we have less control over the manner in which they sell our products

REGULATORY RISKS

  1. 13Our insurance subsidiaries are subject to minimum capital and surplus requirements, and any failure to meet these requirements could subject us to regulatory action or other restrictions, including ceasing business
  2. 14In March of 2024, Citizens and the Colorado Division of Insurance entered into a capital maintenance agreement that specifies that Citizens will infuse capital as needed to ensure that CLOA's RBC remains above 350%. Any required capital contribution could negatively impact our capital resources and liquidity

FINANCIAL RISKS

  1. 15Changes in accounting standards may adversely affect our reported results of operations and financial condition
  2. 16Unexpected losses in future reporting periods may require us to record a valuation allowance against our deferred tax assets
  3. 17Targeted improvements to accounting for long‑duration contracts (LDTI) may increase earnings volatility and reporting complexityNew
  4. 18A ratings downgrade or other negative action by a rating agency could materially affect our business, financial condition, and results of operations49% rewritten
  5. 19ADVERSELY AFFECT OUR REVENUES, OUR RESULTS OF OPERATIONS AND OUR FINANCIAL CONDITIONNew

CYBERSECURITY AND TECHNOLOGY RISKS

  1. 20Our failure to maintain effective information systems could adversely affect our business44% rewritten
  2. 21A cyber attack or other security breach could result in the unauthorized disclosure or loss of confidential data, damage our reputation or relationships, and expose us to significant financial and legal liability, which may adversely affect our business, results of operations, or financial condition
  3. 22The failure of our business recovery and incident management processes to resume our business operations in the event of a catastrophe, an epidemic, a cyber attack, or other event could adversely affect our profitability, results of operations, or financial condition

RISKS RELATED TO HOLDING OUR SECURITIES

  1. 23The number and location of our shareholders may make it difficult to obtain approval of certain corporate actions
  2. 24Our Class A common stock is not registered in any foreign country
  3. 25Applicable insurance laws in the jurisdictions where our insurance subsidiaries are domiciled may discourage takeovers and business combinations that our shareholders might consider to be in their best interests23% rewritten

Other Citizens 10-Ks

  • FY2024 10-K risk factors
    25 risks

    International policyholders account for approximately 67% of direct insurance premiums as of December 31, 2024, driving primary foreign and regulatory risks. Dependence on a small number of independent consulting and marketing agencies creates major distribution vulnerabilities. A capital maintenance agreement with the Colorado Division of Insurance requires keeping CICA Domestic RBC above 350%.

    Filed Mar 13, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.