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CU System
CUNA Mutual financials strong in a volatile economy
MADISON, Wis. (3/5/08)--The financial performance during 2007 for CUNA Mutual Group was strong with most major financials gaining, according to a report issued by the company. That is significant in today's volatile economy. Net income for the company during 2007 totaled $201 million, or 11.4% more than the $180.4 million in net income the year before. 2007 revenues rose 8.8% to $3.1 billion from 2006's $2.85 billion; and the company's operating gain totaled $221 million, up from $178.1 million in 2006, said CUNA Mutual. Assets declined slightly, to $15.1 billion from $15.3 billion in 2006, and the company's total surplus reached $1.79 billion, down from $1.87 billion the year before. That is largely due to a drop in the investments markets, Chief Financial Officer Jeff Holley told The Wisconsin State Journal" (March 3). The strong performance in 2007 was attributable to several factors, said Rick Uhlmann, senior manager, media relations at CUNA Mutual. "We had a potent performance across several business lines, including debt cancellation, credit insurance, international and crop insurance--as well as no significant catastrophe losses in 2007," Uhlmann said. The company is two-thirds of its way through its three-year restructuring transformation process. "CUNA Mutual is achieving the returns needed to continue our transformation so we can drive improvement in product development and ultimately bring more value to our policyholders," he added. "Also in 2007, CUNA Mutual paid a record $1.47 billion in benefits to credit unions (claims paid, dividends and interest credited) and individual member policyholders," said Uhlmann. "In addition, we paid $265 million in credit union reimbursements and experience refunds to credit unions in 2007." In comparison, benefits for 2006 totaled $1.41 billion. "Our return on equity was 12.6% in 2007 for a three-year average of 11%, which ranks among the top tier of mutual insurers nationwide," Uhlmann said. In 2006, the operating return on equity was 11.4%. In January, A.M. Best affirmed CUNA Mutual's financial strength by assigning an "A" (Excellent) rating and a "Stable" outlook. Fitch Ratings, in its most recent review in October, affirmed the company's financial strength at "AA-" (Very Strong), also with a "Stable" outlook.
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