CUNA will add insurance on crops

In an effort to help its client credit unions add members, CUNA Mutual Group is adding crop insurance.

Madison-based CUNA Mutual announced Friday that it has reached an agreement in principle with Amarillo, Texas-based Producer's Ag Insurance Group (ProAg) to provide crop insurance nationwide.

Crop insurance is a $4 billion industry in the U.S. that protects farmers from financial losses that result from natural causes such as drought, floods, hail, wind, frost, insects and disease.

"Credit union CEOs have told me repeatedly that membership growth is their number-one issue," CUNA Mutual President and CEO Jeff Post said in a statement. "By expanding into crop insurance, we can grow our company and contribute to the growth of credit unions."

Post added that farmers "share many of the values of the credit union movement and the cooperative spirit."

CUNA Mutual will serve as the lead reinsurer for ProAg, meaning CUNA Mutual will cover the losses of ProAg customers that exceed certain amounts. CUNA Mutual also will underwrite policies in certain states, allowing ProAg to expand its business nationwide from the 30 states it currently is licensed in.

ProAg will sell and service the policies. The agreement with ProAg begins this fall for select winter crops.

"Our agreement with CUNA Mutual will allow us to deploy our very successful business model of providing superior service and industry-leading technology to agents and farmers in all 50 states," ProAg President and CEO Ben Latham said in a statement. "CUNA Mutual's financial strength, stability and a dedication to customers make them a perfect fit for ProAg."

Pro Ag, which has been in business for more than 80 years, is the ninth-largest writer of multi-peril crop insurance and the sixth-largest writer of crop hail coverage in the country.

"The agreement with ProAg is another step in building the new CUNA Mutual," Post said. "We will continue to explore strategic partnerships that can help CUNA Mutual, and credit unions grow in the future."

Adding crop insurance will result in a handful of positions being added at CUNA Mutual.

CUNA Mutual, which provides financial services to credit unions and their members worldwide, is in the midst of three-year effort to become a more efficient and competitive company. The company says its changes will produce $14 million in annual expense savings without hurting customer service, and produce $25 million in net investment income improvement over 2005 without changing the company's investment risk profile.

The restructuring has eliminated several hundred positions, mostly in the Madison area, where it now employs about 2,300.

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