MADISON, Wis. (3/21/13)--Despite a slugging economy and weather-related losses, CUNA Mutual Group posted its fourth consecutive year of earnings growth during 2012.
CUNA Mutual attributed the growth to strong operating results in three core credit union businesses. Consolidated generally accepted accounting principles(GAAP) operating revenue, net income and capital levels all increased over 2011.
CUNA Mutual recorded $150 million of net income (GAAP), compared with $83 million in 2011. Strong operating results, particularly in lending, direct-to-consumer and asset accumulation products, helped offset drought-related losses in the company's crop insurance business and weather-related losses in its auto and home businesses. Solid investment performance also contributed heavily to higher net income in 2012, said the company.
GAAP operating revenue grew by 3%. An improved lending environment, the company's focus on investing in and growing its consumer product lines, and strong immediate annuity sales were key factors driving the year's revenue growth, CUNA Mutual said.
"Strong operating results in our core credit union businesses, prudent expense management and a $40 million reinvestment in a number of those businesses all contributed to very favorable results," said Alastair Shore, executive vice president and chief financial officer.
CUNA Mutual Group's total cash and investments grew to $11.1 billion in 2012, an increase of $1.2 billion over 2011. The company's investment portfolio is well-diversified with an average credit quality of "A."
The company continued to build its financial strength. Statutory total adjusted capital of CMFG Life Insurance Co., CUNA Mutual's lead life insurance company, grew to $1.6 billion in 2012, up $133 million from 2011. The company's consolidated GAAP surplus ended the year at $2.5 billion, a 17% increase. A.M. Best recently affirmed its key insurance companies' ratings at "A" (Excellent), the third highest of 16 financial strength categories, with a stable outlook.
The company also continued its strong advocacy for credit unions in 2012, contributing $39 million to support credit union leagues and industry efforts, compared with $35 million in 2011. It also reinvested more than $40 million in a number of businesses, including consumer, asset management, crop insurance and technology. Benefits paid to credit unions in 2012 totaled $964 million, up slightly from 2011.