MADISON, Wis. -
"What is really exciting about this is that our earnings grew by $47 million, or 36%, without collecting increased premiums from credit unions," CEO Jeff Post told the Credit Union Journal. "We had some rate increases and some rate decreases, so what it really came down to was a combination of efficiencies we gained through our transformation process, and some good luck."
On the luck side of things, CUNA Mutual Group had fewer disaster claims in 2006 over 2005, to the tune of a $12 million in savings after taxes. Another $11 million was saved through efforts to shrink the company's tax liability, and another $9 million saved through workforce reductions. Savings from workforce reductions will continue in 2007, as well, since costs were incurred in 2006 for severance packages and job placement services.
The biggest earnings boost came from greater investment income, up $42 million, in 2006 over 2005. "We beat some of the best out there," Post said.
CUNA Mutual expenditures partially offset that gain. "We spent $9 million on increased benefits to credit unions and their members, either on higher returns to credit unions or increased pension plans," he explained. "We also invested in a number of initiatives, such as the $18-million we spent on the call center in Fort Worth, Texas."
Post said the company is also proud to have paid $1.4 billion in benefits to credit unions, noting, "a strong CUNA Mutual Group is a wonderful thing for the credit union system."
Post suggested it's only the beginning. "This is year one of our three-year transformation," he observed. "We continue to invest in technology, products and services and other products we can bring to CUs. There's still a lot of work on our plate. Our employees haven't seen results this good in a long time, but that doesn't mean we're doing high-fives and the job's done."
Some things, he said, such as the tax liability work, are, in fact, done. But just about everything else continues. "A lot of what we did last year was getting at the low-hanging fruit, which means we're going to have to work harder from here on out. We're basically done with the distribution optimization, so all systems are go for our sales organization. We're also basically done with the investment optimization, as well. It's the product side that is really at the beginning."
