MADISON, Wis. - CUNA Mutual Group has reached agreement with Amarillo, Texas-based Producers Ag Insurance Group (ProAg) to become sole owner of the multi-peril crop insurer, serving farmers and agricultural producers nationwide. ProAg will operate as a standalone subsidiary of CUNA Mutual, the companies said.
"The acquisition supports CUNA Mutual's need to identify new growth opportunities and diversify the risks it insures," CUNA Mutual said in a statement. "The agreement with the insurer will also enhance CUNA Mutual's flexibility and financial strength while enabling ProAg to continue to expand its business."
"This acquisition builds on the initial investment we made in ProAg in 2007," said Jeff Post, president & CEO, CUNA Mutual, also in a released statement. "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.
CUNA Mutual's 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. Since its partnership was formed with CUNA Mutual in 2006, ProAg 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.
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.
