changed in an instant. Thankfully, Helen protected her ... account or auto loan â they turned to CUNA Mutual Group to
20 14 YE AR IN REVIEW
80 YEARS STRONG
Our Purpose To become the trusted insurance and investment partner, empowering middle-Americans to achieve financial security. 2 4
l et te r to p o l i c y h o l d e r s we h ave p u r p o s e s to r i e s
10
co r p o rate re sp o n si b i l i t y
16
f i n a n cia l h i g h l i g ht s
20
about us
1 2014 YEAR IN REVIEW
To Our Policyholders, At CUNA Mutual Group, we have a clear purpose. We are dedicated to helping millions of people and their families build a better financial future.
We build trusting relationships with credit unions and others to empower these families with insurance and investment products. Our purpose drives what we do, how we do it and the way we measure our results. Throughout this annual report, you will see stories from the people who matter most: our customers. You will see that in 2014, we served these customers in their times of need and made a real difference in their lives. This year marked my first as president and chief executive officer. I’m proud of what our team accomplished this year. Not only did we have a great impact on our customers, we also achieved strong financial performance. Our revenue and earnings are growing, and our capital level is higher than ever. At the same time, we’re making long-term plans and investments that will serve our customers for generations to come.
2 2014 YEAR IN REVIEW
The future of our company rests with our knowledge of consumers and the credit union movement. Going forward, we will continue making investments in products, technology and data capabilities to help us deliver the products and services that our customers need. Thank you for the trust you place in CUNA Mutual Group. I look forward to the years ahead.
Robert N. Trunzo President & Chief Executive Officer CUNA Mutual Group
3 2014 YEAR IN REVIEW
HELPING PEOPLE ACHIEVE FINANCIAL SECURITY
4 22001144 Y YE A R I N R REEV VIIEEW W
L E N D I N G & PAY M E N T S EC U R I T Y
Safety Net “There really wasn’t a safety net in our lives; the debt protection was that safety net.“ HELEN AGNEW
120,637 CL AI M S PAI D
CU Community Credit Union — Springfield, MO
I N 20 1 4
Helen never imagined that she would have to relearn how to talk or walk, but after suffering a stroke, this became her reality. It affected every aspect of her life including her family, her ability to work and her personal independence. Helen was responsible, had a great job and financial security, but all of that changed in an instant.
$
Thankfully, Helen protected her auto loans through her credit union and CUNA Mutual Group. She was able to rely on debt protection coverage to make her car payments so she could focus on the things that matter most: healing, paying medical bills and ultimately finding a new job after the stroke. V I S I T W W W.YO U T U B E /C U N A M U T UA LG R O U P 1 FO R H E L E N ’ S V I D EO
5 2014 YEAR IN REVIEW
Protecting what matters most1
B U S I N E S S P R OT EC T I O N
Reassurance $1.157 billion TOTAL B EN EFITS PAI D I N 20 1 4 2
$ Delivering on the promises made to credit unions and
“They knew it was devastating, and being given that reassurance is something priceless.“ PHYLLIS COCHRAN
Augusta VAH Federal Credit Union — Martinez, GA After Augusta VAH Federal Credit Union’s branch was destroyed by a massive fire, CEO Phyllis Cochran knew that her staff needed to act quickly for their members. With a strong, up-to-date disaster preparedness plan in place, everyone knew what they needed to do to get back to business-as-usual. Although the branch was a complete loss, they were back up and running within hours of the fire because of CUNA Mutual Group. “We were so thankful that the folks from CUNA Mutual make it so easy,” said Phyllis. “To me, there are no other competitors .… When you have a catastrophic loss, I can attest, they are the best.”
their members V I S I T W W W.YO U T U B E /C U N A M U T UA LG R O U P 1 FO R P H Y L L I S ’ S V I D EO
6 2014 YEAR IN REVIEW
RETIREMENT
Benefit “Employees understood what this plan was, how it was going to benefit them, and what they could expect from it.“ NATHAN GROSSENBACH
Shoreline Credit Union — Manitowoc, WI
96.9 %
Retirement made simple and easy to understand. That’s what Shoreline Credit Union delivered to its employees through CUNA Mutual Group’s retirement solution. “CUNA Mutual Group came in and did almost all of the dirty work for us. It was just tremendous,” said Nathan, accounting manager. The hands-on service was “the most important thing to help the transition go smoothly.” With in-person consultation plus an easy-to-use Benefits for You online portal, employees of the credit union can confidently choose the right investment option to help them achieve financial security. V I S I T W W W.YO U T U B E /C U N A M U T UA LG R O U P 1 FO R N AT H A N ’ S V I D EO
7 2014 YEAR IN REVIEW
of credit unions in the United States have one or more products with CUNA Mutual Group3
T R U S TAG E
Protect TR US TAG E P R OTEC TS M O R E THAN
15 million
“He would have died for us, to protect us, and we would have done the same for him.“ BELINDA LOCKRIDGE
Honda Credit Union — Piedmont, AL
CR ED IT U N I O N M EM B ER S 4
When you’re grieving the death of a loved one, your insurance company may not be top of mind. “You can’t think like you would normally be able to think at a time like this,” explained Belinda. To her surprise, she was able to settle her claim, “in a matter of minutes.” Within two days, Belinda received her husband’s life insurance policy benefits in her account. “That was one thing I could kind of mark off my list and say, ‘Okay, I don’t need to go back to it.’ Now I can just go handle the next thing.” At CUNA Mutual Group, we protect what matters most and deliver on the promises made to credit union members. V I S I T W W W.YO U T U B E /C U N A M U T UA LG R O U P 1 FO R B E L I N DA’ S V I D EO
8 2014 YEAR IN REVIEW
W E A LT H M A N AG E M E N T
Collaborating “It’s working with companies that have that same vision that helps us survive and partnering with individuals who can help you get there.“
A S A CO M M IT TED I N D US TRY LE AD ER , CU NA M U T UAL G R O U P CO NTR I B U TED
DAVID YOUNG
Commonwealth Credit Union — Frankfort, KY When Commonwealth Credit Union realized it needed to provide more sophisticated financial solutions to their members — beyond a simple checking
M O R E THAN
$1 million TO D I R EC T ADVO C ACY I N 20 1 4 5
account or auto loan — they turned to CUNA Mutual Group to help them deliver a suite of products and services that would help their members build financial security. “Our biggest goal is to make sure our members are protected and they can meet their financial needs, both now and in the future,” explained Executive Vice President David Young. For nearly 30 years, CUNA Mutual Group has collaborated with credit unions to provide investment, insurance and retirement planning services to members. Commonwealth Credit Union is building deeper member relationships through CUNA Brokerage Services, Inc., CUNA Mutual Group’s broker-dealer, and strengthening their members’ financial future through their working and retirement years. V I S I T W W W.YO U T U B E /C U N A M U T UA LG R O U P 1 FO R DAV I D ’ S V I D EO
9 2014 YEAR IN REVIEW
$
CORPORATE RESPONSIBILITY At CUNA Mutual Group, corporate responsibility is ingrained in the way we do business. We are committed to doing the right things for our customers, our staff, our communities and our natural environment.
10 2014 YEAR IN REVIEW
Our employees share this sense of responsibility. In 2014, they volunteered to help people in need and improve the communities where they work and live. By offering their skills, their time and their dollars, they exhibit our corporate values in a very personal and meaningful way.
11 2014 YEAR IN REVIEW
BY THE NUMBERS H I G H LI G HTS F R O M 20 1 4 6 ,7
Dollars for Doers If a staff member makes a financial contribution and volunteers significant hours to a single nonprofit
$2M
75
D O NATED TO SU P P O RT O U R CO M M U N ITI E S
“DOLLARS FOR DOERS” GRANTS
$500K+
MAD E O N B EHALF O F EM P LOYEE S NATI O NWI D E
R AISED BY S TAFF FO R N O N P R O FITS
organization, the CUNA Mutual Group Foundation will make a
$250 or $125 grant in that employee’s name
7,102
to the nonprofit.
7
ADOPTED SCHOOL RELATIONSHIPS
419
HOLIDAY GIFTS D O NATED TO R E SI D ENTS O F M ENTAL H E ALTH CENTER S
12 2014 YEAR IN REVIEW
PAID VOLUNTEER HOURS
5,872 lbs
“Best Company” in Madison
OF CLOTHING D O NATED TO G O O DWI LL AN D S T. VI N CENT D E PAU L
For the third year in a row, Madison’s In Business magazine named CUNA Mutual Group one of the area’s “Best Companies to Work For” based on quality of benefits. Of the 27 companies named, CUNA Mutual Group
7,870
had one of the two highest scores in the ranking.8
MEALS
D O NATED TO SECO N D HARVE S T FO O D BAN K
4,320
46
COMMUNITY EVENTS HOSTED H ELP ED SAVE U P TO
MEALS
1,528
D ELIVER ED BY S TAF F VIA M E AL S O N W H EEL S
TH R O U G H S TAF F B LO O D D O NATI O N S
LIVES
13 2014 YEAR IN REVIEW
601
STAFF VOLUNTEERS FO R U N ITED WAY O F DAN E CO U NT Y ’ S “ DAYS O F CAR I N G”
CUNA Mutual Group Foundation The giving priorities of the CUNA Mutual Group Foundation and CUNA Mutual Group are driven by our employees. They help shape our strategy; oversee grants through the Foundation Board; plan activities through the Employee Philanthropy Team; and gladly donate their time, resources and skills to help their communities.
SUSTAINABILITY 9 In addition to serving our communities through
Reducing greenhouse gas emissions
philanthropy, our Green Team focuses on reducing
5.2 million pounds of greenhouse gas emissions
waste and pollution and increasing efficiency around
were prevented from entering the atmosphere
our campuses. In 2014, CUNA Mutual Group continued
and polluting the environment during our Green
its commitment to sustainability by:
Transit Month initiative.
Adding green space Madison grounds, which produced 802 pounds
Encouraging employees to go green
of fresh fruits, vegetables and herbs to help
CUNA Mutual Group’s office
feed hungry families in our community.
in Madison is designated
40 garden plots were built on the company’s
as a “Bicycle-Friendly
Reducing our carbon footprint
Business” by the League
Replacing 90% of Styrofoam in employee
of American Cyclists; one
cafeterias with compostable packaging.
of only 43 businesses in the state of Wisconsin.
14 2014 YEAR IN REVIEW
CAPACITY-BUILDING GRANTS In 2014, the CUNA Mutual Group Foundation awarded the following unrestricted grants to nonprofits in the Madison community. Unrestricted grants are special; the nonprofits can use the money not just for specific programs but for building their capacity as organizations.10 We recognize that only giving program-specific grants can unintentionally hamper growth. All of the nonprofits that were awarded capacity-building grants have a solid track record of strong management and leadership and a very disciplined business model. The grants are intended to make a statement that it’s important to support not just programs, but infrastructure and overhead for nonprofits so they can serve more people, families and children.
$1,200,000
$100,000
$100,000
$100,000
$100,000
$100,000
to the Madison
to Domestic Abuse
to Urban League
to YWCA-Madison
to Boys & Girls Club
to Centro Hispano
Metropolitan
Intervention Services
of Greater Madison
of Dane County
School District
“We think this will have an impact on a large number of people in need and will put money to very smart use — not just good use, but smart, as well,” says Steve Goldberg, executive director of the CUNA Mutual Foundation. “These nonprofits understand the process of combining a strong service model with a strong business model, which is similar to how CUNA Mutual Group runs its business.”
15 2014 YEAR IN REVIEW
Financial Highlights
11
In 2014, CUNA Mutual Group continued to show financial strength. Annual total returns on our company investments were very strong. (in millions) 2014 2013 Total Revenue*
$ 3,070
$ 2,966
GAAP Net Income
$
206
$
162
Statutory Total Adjusted Capital
$ 1,964
$
1,795
*Prior period information has been restated to conform to current period presentation for discontinued operations. Total revenue excludes net realized investment gains and losses.
A.M. BEST COMPANY HAS AFFIRMED THE FINANCIAL STRENGTH OF ...
A
(EXCELLENT) RATING
CMFG Life Insurance Company (CMFG Life) and MEMBERS Life Insurance Company12
A
CUMIS Insurance Society, Inc. and subsidiaries13
(EXCELLENT) RATING
For the latest rating information, access www.ambest.com
16 2014 YEAR IN REVIEW
FIVE-YEAR PERFORMANCE Unaudited
Total Revenue (in billions)
CMFG Life Insurance Company Risk-Based Capital Ratio
2010 2011 2012 2013 2014
2010 2011 2012 2013 2014
$2.6 $2.6 $2.8 $3.0 $3.1
373% 418% 457% 494% 571%
Net Income (in millions) 2010 2011 2012 2013 2014
Customers can have confidence that CUNA
$90
Mutual Group is financially strong,
$83 $150
backed by a robust investment portfolio, and
$162
positioned to serve future generations. $206
Net Investment Income (in millions)
Assets (in billions) 2010 2011 2012 2013 2014
2010 2011 2012 2013 2014
$15.3 $16.4 $17.3 $17.5 $17.7
Total Surplus (in millions) 2010 2011 2012 2013 2014
$472 $516 $523 $552 $562
Our investment results beat leading industry peer groups including the Morningstar Intermediate Term Bond Index, PIMCO and BlackRock. Investment results also exceeded Morningstar top 10% of all manager returns. Additionally, we took steps to diversify our portfolio and manage risk by offering a highly successful sale of securitized mature private equity and mezzanine investments. The sale was over-subscribed by three times.
$1,810 $2,097 $2,457 $2,370 $2,720
17 2014 YEAR IN REVIEW
REVENUE BY STRATEGIC BUSINESS UNIT 11.6% Wealth Management (e.g., Brokerage services, annuities, etc.)
43.2% Commercial
Consolidated Statement of Operations* For the years ended December 31, 2014, 2013 and 2012. Amounts in millions/unaudited.
Revenues 30.3% TruStage
Life and health premiums
(e.g., Life, accidental death and dismemberment, auto, home, etc.)
2014 2013 2012 $ 1,363 $ 1,339 $ 1,292
Property and casualty premiums
713
661
578
Net investment income
562
552
523
Other income
432
414
390
3,070
2,966
2,783
894
871
868
Property and casualty insurance loss and loss adjustment expenses
451
419
380
Interest credited to policyholder account balances
129
161
160
25
29
31
1,232
1,213
1,101
102
81
56
2,833
2,774
2,596
—
2
(12)
237
194
175
Total revenues
14.9% Other
Benefits and expenses
(e.g., Fidelity bond, retirement plans, lending and payment security products, etc.)
Life and health insurance claims and benefits
DISTRIBUTION OF INVESTED ASSETS
Policyholder dividends 75.9% Debt Securities at Fair Value
12.1% Mortgage Loans
Operating and other expenses
6.2% Limited Partnerships
Income tax expense
2.3% Cash and Shortterm Investments 1.2%
Other Invested Assets
1.0%
Equity Securities at Fair Value
Total benefits and expenses Equity in unconsolidated affiliates Net gain from continuing operations Realized capital gains (losses), net of tax
0.9% Policy Loans 0.4% Real Estate
Discontinued operations, net of tax Net income
7
4
(8)
(38)
(36)
(17)
$ 206 $ 162 $
*Prior period information has been restated to conform to current period presentation for discontinued operations.
18 2014 YEAR IN REVIEW
150
Consolidated Balance Sheet* As of December 31, 2014 and 2013. Amounts in millions/unaudited.
.
Assets 2014 2013 Liabilities and Policyholders’ Surplus Debt securities at fair value $ Equity securities at fair value Mortgage loans Real estate, at cost less accumulated depreciation Policy loans Limited partnerships Other invested assets Cash and cash equivalents
9,118 $ 8,333 117 135 1,455 1,378 53 104 751 146 276
$ 17,686
2013
Liabilities Insurance and annuity reserves $ 8,937 $ 8,631 Unearned premiums 437 413 Notes and interest payable 390 243 Dividends payable to policyholders 14 14 Reinsurance payable 74 68 Other liabilities 807 684 Separate account liabilities 3,872 4,632 Liabilities of discontinued operations 435 457
53 103 644 138 318
Total cash and investments 12,020 11,102 Premiums receivable, net 269 251 Reinsurance recoverables 129 123 Deferred policy acquisition costs 417 414 Other assets 475 449 Separate account assets 3,873 4,632 Assets of discontinued operations 503 541 Total assets
2014
Total liabilities
$ 14,966
$ 15,142
Policyholders’ surplus
$ 2,720
$ 2,370
Total liabilities and policyholders’ surplus
$ 17,686
$ 17,512
Financial Footnote
$ 17,512
These results are for CUNA Mutual Holding Company and its subsidiaries, and are derived from consolidated financial statements, which are prepared in accordance with Generally Accepted Accounting Principles.
*Prior period information has been restated to conform to current period presentation for discontinued operations.
To receive a detailed report of the financial statements, including the auditor’s report, write to: CUNA Mutual Group External Reporting-Finance P.O. Box 391 Madison, WI 53701-0391
19 2014 YEAR IN REVIEW
Or visit www.cunamutual.com to view the audited financial statements on the “About Us” page.
About Us CUNA Mutual Group is committed to doing business the right way — with a clear commitment to our
company values.
These values are simple: Act with Courage
Work with Passion
Maintain Focus
Generate Innovation
We challenge the status
We care deeply about the
We prioritize initiatives and
Our creativity and “can-do”
quo and strive for continuous
work we do; are self-motivated,
align resources for maximum
spirit ensure the continuous
improvement, take intelligent
energized, and dedicated
efficiency; consistently achieve
search for innovative and
risks and carry out the
to exceeding our customers’
sustainable, measurable
best-in-class solutions; and
hard decisions.
expectations.
results; provide high-quality
we transform knowledge into
service; and operate profitably.
new or improved products and services.
Uphold Integrity
Foster Collaboration
Promote Inclusion
We do what’s right, align our
We readily share resources and
We respect all individuals,
actions with intent, deliver
ideas; we invest time and effort
appreciate that each
what is promised, and act
in coaching and mentoring
of us is unique, and
ethically in all of our actions
others; use the knowledge of
foster a workforce that
and interactions.
others to get the job done
connects with our diverse
efficiently and effectively; and
customer base.
succeed through teamwork.
20 2014 YEAR IN REVIEW
World’s Most Ethical Companies® CUNA Mutual Group was named one of the World’s Most Ethical Companies in 2013 and 2014 by Ethisphere, a respected think tank.14, 15 According to Ethisphere, this designation goes to
Getting strong results matters. But it is even
companies that “not only promote ethical business
more important to get results the right way —
standards and practices internally, they exceed legal
with a clear commitment to ethics and values.
compliance minimums and shape future industry
This recognition from Ethisphere is just one
standards by introducing best practices today.”
indication of how we live up to those standards.
CIO 100 Award Winner for the Zone App TM
CUNA Mutual Group was recognized by International Data Group’s CIO magazine as a 2014 CIO 100 Awards recipient.16 The ZONETM is a tablet application that helps people build for retirement security by creating a zone of risk and reward aligned with the their investment goals.
21 2014 YEAR IN REVIEW
Leadership BOARD OF DIRECTORS The board of directors of CUNA Mutual Holding Company is elected by the company members, who are the qualifying policyholders of CMFG Life Insurance Company. The board has responsibility for setting strategic direction and providing oversight for CUNA Mutual Group.
Eldon R. Arnold
Robert N. Trunzo
Board Chairman, Governance Committee Chairman, Retired President/CEO, CEFCU Peoria, Illinois
President & CEO, CUNA Mutual Group Madison, Wisconsin
Robert J. Marzec
Joseph J. Gasper
Thomas C. Godlasky
Caren C. Gabriel
Bert J. Hash Jr.
Audit Committee Chairman, Retired Audit Partner, PricewaterhouseCoopers Minneapolis, Minnesota
Investment and Capital Committee Chairman, Retired President & COO, Nationwide Insurance Dublin, Ohio
Board Vice Chairman, Compensation Committee Chairman Retired CEO, Aviva North America West Des Moines, Iowa
President & CEO, Ascend Federal Credit Union Tullahoma, Tennessee
Retired President & CEO, MECU of Baltimore, Inc. Baltimore, Maryland
Angela K. Owens
Randy M. Smith
Janet V. Whitehouse
James W. Zilinski
President & CEO, American Airlines Federal Credit Union Fort Worth, Texas
Retired President & CEO, Randolph-Brooks Federal Credit Union Live Oak, Texas
President, Wentworth Advisory Group Rye, New Hampshire
Retired President, CEO & Chairman, Berkshire Life Insurance Company Pittsfield, Massachusetts
22 2014 YEAR IN REVIEW
EXECUTIVE
SENIOR
David Marks
Mike Anderson
Michael Defnet
Jason Pisarik
Executive Vice President, Chief Investment Officer
Senior Vice President, Chief Legal Officer
Senior Vice President, Sales & Marketing
Senior Vice President, Chief Accounting Officer
Winning “W” Company
Faye Patzner
Kevin Belgrade
Cedric Ellis
Christopher Roe
CUNA Mutual Group
Vice Presidents
Vice Presidents
Executive Vice President, Senior Vice President, Senior Vice President, Chief Senior Vice President, Chief Administrative Officer Corporate Communications Human Resources Officer Corporate & Legislative Affairs
Jim Power
Jeff Bosco
Tim Graham
Executive Vice President, Commercial
Senior Vice President, Wealth Management
Senior Vice President, Business Finance
Alastair Shore
Michael Briggs
Daniel Kaiser
Executive Vice President, Chief Financial Officer
Senior Vice President, Marketing and Sales Operations
Senior Vice President, Lending & Payment Security
Paul Chong
Thomas Martorana
Senior Vice President, Retirement Plan Services
Senior Vice President, Customer Operations
David Sweitzer
Chris Copeland
Tom Merfeld
Laurie Winger
Senior Vice President, Chief Actuary
Senior Vice President, Chief Market Risk Officer
Senior Vice President, Planning and Business Services
Tim Peterson
was recognized as a 2020 Women on Boards Winning “W” Company
Susan Sachatello
in 2014. Winning
Senior Vice President, TruStage
Companies recognize
Steve Suleski
diversity and have
Senior Vice President, Chief Governance & Compliance Officer
20 percent or more
Senior Vice President, Sales
Senior Vice President, Chief Information Officer
23 2014 YEAR IN REVIEW
the importance of board
women on their boards of directors.17
Contact Information CUNA MUTUAL GROUP
For the latest news about our company, people
5910 Mineral Point Road
and industry, find us on:
Madison, WI 53705
Twitter: www.twitter.com/cunamutualgroup LinkedIn: www.linkedin.com/company/cuna-mutual-group
800.356.2644
Facebook: www.facebook.com/CUNA.Mutual.Foundation
CUNA Mutual Group was founded in 1935 by credit union
Google+: www.plus.google.com/+cunamutual/posts
pioneers, and our commitment to their vision continues today.
YouTube: www.youtube.com/CUNAMutualGroup1
For more than 80 years, CUNA Mutual Group has worked tirelessly
Socially Speaking Blog: www.cunamutualgroup.blogspot.com
to deliver product and service solutions that meet the unique challenges and needs of our customers. Additional information about CUNA Mutual Group can be found at www.cunamutual.com.
Because a printed report was not produced, significant savings were realized and resources conserved. Anyone viewing the report online can make the choice whether to download and print a copy of this report for personal use.
CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. TruStage™ Insurance products and programs are made available through TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company and other leading insurance companies.
Footnotes 1, 2, 3, 4, 5, 6, 9, 11 CUNA Mutual Group Internal Report, 2014 7, 10 CUNA Mutual Group Foundation Internal Report, 2014 8 In Business Magazine, December 2014 12, 13 A.M. Best Company, January 2015
14 15 16 17
Ethisphere, January 2013 Ethisphere, January 2014 CIO Magazine, August 2014 2020 Women on Boards, 2014
24 2014 YEAR IN REVIEW
P.O. Box 391 5910 Mineral Point Road Madison, WI 53705-0391 800.356.2644 www.cunamutual.com
© CUNA Mutual Group, 2015 All Rights Reserved; CORP-1159091.1-0315-0417