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CUNA Mutual net income up 71
MADISON, Wis. (5/6/11)--CUNA Mutual Group’s operating revenues grew more than 3% and net income increased 71% in 2010, according to the company’s 2010 annual report. That performance led to an affirmation of CUNA Mutual’s financial strength and an outlook upgrade by a ratings agency. The company’s bottom line was bolstered by its diversification strategy, the company said. CUNA Mutual’s crop insurance business accounted for almost half of the operating revenue growth in 2010 to offset challenges credit union product lines faced due to poor economic conditions. Meanwhile, operating performance and lower investment impairments propelled net income to $87 million--up from $51 million in 2009. “Despite challenging economic conditions, we grew our financial strength by increasing our GAAP (Generally Accepted Accounting Principles) capital to nearly $1.9 billion, an increase of more than 50% compared to our capital position at the end of 2008,” said Jeff Post, president/CEO of CUNA Mutual. The company increased its support to the credit union system by $6 million. CUNA Mutual also disbursed more than $1.3 billion in benefits to U.S. credit unions and policyholders through claims paid and non-interest income. Though 2011 plans call for modest revenue growth, CUNA Mutual said it will continue to invest in its future with credit unions by increasing financial resources to its lending-related products and consumer businesses. CUNA Mutual said it also will be looking for growth opportunities through acquisitions, similar to the purchases of crop insurer ProAg and retirement plan provider CPI Qualified Plan Consultants in 2009. To access CUNA Mutual’s annual report, use the link. The solid 2010 performance contributed to financial ratings agency A.M. Best’s affirmation of CUNA Mutual Group’s financial strength rating at “A” (Excellent). The agency has returned the company’s outlook to stable. A.M. Best cited CUNA Mutual’s improvement in the overall quality of its balance sheet. The “A” rating applies to the principal companies of CUNA Mutual Group--CUNA Mutual Insurance Society, a life and health insurer, and CUMIS Insurance Society, Inc., a property and casualty subsidiary. The “A” rating is the third highest rating of 16 categories of ratings A.M. Best issues. “During these difficult economic times, CUNA Mutual has worked hard to keep premiums down, deliver greater value to credit unions and their members through our products and services, and still grow our company’s financial strength,” Post said. A.M. Best also affirmed the “A-” (Excellent) financial strength ratings of Producers Agriculture Insurance Company and Producers Lloyds Insurance Company (ProAg) with a stable outlook. A.M. Best also noted ProAg’s historical operating profitability and strong agency relations. The financial strength rating of MEMBERS Life, a dormant downstream life company that is not core to CUNA Mutual’s operations, was affirmed at B++ (Good) with a stable outlook.
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