MADISON, Wis. and AMARILLO, Texas (9/8/09)--CUNA Mutual Group announced today it has reached agreement with Producers Ag Insurance Group (ProAg) to become sole owner of the multi-peril crop insurer, serving farmers and agricultural producers nationwide. CUNA Mutual said the acquisition with the Amarillo, Texas-based insurer will:
* Support CUNA Mutual’s growth strategies and diversify the risk the company insures; * Enhance CUNA Mutual’s flexibility and financial strength while enabling ProAg to continue to expand its business; and * Support ProAg’s growth objectives. ProAg will operate as a stand alone subsidiary of CUNA Mutual.
“This acquisition builds on the initial investment we made in ProAg in 2007,” said Jeff Post, President /CEO, CUNA Mutual. “It in no way affects our commitment to credit unions. For us to continue to strengthen and diversify our financial position, we need to identify new avenues for growth. “In looking for new opportunities to build on our expertise and continue to strengthen our financial position, crop insurance and our recent acquisition of CPI Qualified Plan Consultants were natural fits,” added Post. “These acquisitions build off our core competencies, help diversify our business, and provide revenue streams that give us flexibility to invest and grow in the future.’’ CUNA Mutual noted its relationship with ProAg began in 2006 when it began serving as the lead reinsurer for ProAg as a direct writer of crop insurance. In 2007, CUNA Mutual acquired a minority ownership position in ProAg. During its partnership with CUNA Mutual, ProAg since 2006 has grown from a 70-employee company doing business in 25 states to a 400-employee company serving more than 40 states. ProAg is on pace to generate more than $530 million in premium in 2009, CUNA Mutual said. “ProAg has been the fastest-growing crop insurer this decade,” said ProAg Chairman/CEO Ben Latham. “CUNA Mutual’s support of our growth as a reinsurer and minority shareholder, as well as their commitment to our way of doing business, makes them the natural provider of the institutional support we need to reach our goals of becoming a market leader.” Crop insurance protects farmers from financial losses that result from natural causes such as drought, excessive moisture, hail, wind, frost, insects and disease. Multi-peril crop insurance is an $8 billion industry in the U.S.