MADISON, Wis. (4/7/10)--CUNA Mutual Group added new Credit Union Protection coverage options and increased claims payments to credit unions covered by its Bond program by more than 40% in 2009, a league webinar audience was told Wednesday.
About 60 executives and front-line staff from credit union leagues and league service corporations received product enhancement updates, reviewed risk trends and participated in a question and answer session with CU Protection product leaders. "It’s a very difficult economy, and we recognize that credit unions are faced with increased loss exposures," said Chad Nitschke, vice president of CU Protection. "In addition to paying more claims, we also made enhancements to our products to help credit unions control their losses from new and ever-growing risks." Paid claims were up in 2009. "In fact, Bond benefits paid to customers exceeded premiums by 27%," Nitschke said. Credit unions filed nearly 8,000 CU Protection claims last year. A breakdown::
* Bond--3,000; * Management & Professional Liability (MPL)--1,200; * Property & Business Liability/Workers’ Compensation--3,000; and * Business Auto--700.
Lender Liability was the fastest-growing loss area with a 19% increase, while Directors, Volunteers and Employee (DVE) claims increased by more than 100%. Nitschke said four of the most notable CU Protection product enhancements in 2009 included:
* Plastic Card Claims Automation with FIS and CO-OP Financial Services; * Introduction of Management Umbrella coverage within MPL; * Identity Theft coverage for credit union directors within MPL; and * Fraudulent Mortgage Loan Documentation coverage.
Nitschke reported more customers than ever are staying with CUNA Mutual, and more are moving to CUNA Mutual from competitors. CU Protection premium retention was 98.4%, the highest in recent history and well above industry averages, which run 75% to 85%. "In addition, more than four times as many customers returned to CUNA Mutual in 2009 after being with a competitor, compared to historical averages," Nitschke said. "We enjoyed very positive results for earning customers' business in 2009, and that momentum seemed to continue in the first two months of 2010.” Participants received updates from product heads and a summary of CUNA Mutual’s Risk Management Services and advocacy efforts. These activities include founding membership in the Credit Union Risk Council and lobbying activities to enact legislation for plastic card payment industry change. A.M. Best affirmed CUNA Mutual Group's “A” (Excellent) financial strength rating, which applies to CUNA Mutual's principal companies: CUNA Mutual Insurance Society, a life and health insurer, and CUMIS Insurance Society Inc., a property and casualty subsidiary, which provides the CU Protection products. The “A” rating is the third highest rating of 16 categories of ratings A.M. Best issues.