CUNA Mutual Group will be one of the country's biggest players in the financial services industry by the year 2015, according to its retiring president Richard M. Heins.

CUNA Mutual currently is the dominant insurance product provider for credit unionS, but its share of credit union members amounts to "peanuts," Mr. Heins said.

The sky's the limit if it can deepen that penetration.

"There are 66 million credit union members," he said in an interview. "If we sold 10% of the insurance needs of that market, we'd be bigger than Prudential.

"My vision of the company is, if we continue to do our job, and do our job well, we will probably be within the top 25 [nonbank] financial institutions in 20 years."

Mr. Heins, 67, can claim some credit if CUNA Mutual someday dwarfs the Rock.

He started working as a consultant for the Madison, Wis.based mutual insurance company in 1956, when he was a professor at the University of Wisconsin. In 1986 he left academia to be its chief operating officer, and in 1988 he became president.

Since Mr. Heins took the reins, CUNA Mutual's assets have, swollen 220%, to $4.8 billion. He built it into a multiproduct financial services corporation from a company that offered just credit insurance and a bonding program.

In keeping with its expanded mission, on Oct. 1 the company changed its name from CUNA Mutual Insurance Group.

"We sell annuities, we sell securities, we sell mutual funds, we sell mortgage insurance and technology," he said. "What we're trying to do is help credit unions provide the services their competitors are offering and make sure that .the member feels he can obtain services at the credit union."

The chief delivery system for these services is Plan America, a program that grew out of the 1986 merger with Century Companies of America, a mutual insurance company.

The program offers a wide range. of investment products through representatives in about 600 credit unions. Last year it sold $1 billion in mutual funds.

Mr. Heins said CUNA Mutual is striving to increase its direct marketing to reach more credit union members. It's also developing new products.

For example, last year it entered into a joint venture with the Credit Union National Association and fund manager T. Rowe Price to create a line of noload mutual funds. So far the funds haven't sold well, Mr. Heins said, largely because they are being sold by mail or by telephone.

"Credit union people are buying mutual funds, but they don't like buying mutual funds by mail or over the phone," Mr. Heins said.

The funds should start selling better when Plan America's employees offer them next year.

CUNA Mutual also is expanding its traditional role of providing services to credit unions. Now it's focusing on trying to help credit unions boost lending.

Recently it launched CMG Mortgage Insurance Co., a private mortgage insurance company that covers mortgages' with loan-to-value ratios of 80%. This way a qualified home buyer who can't make a 20% minimum down payment can secure mortgage insurance, and a credit union that otherwise wouldn't make the loan for fear of foreclosure can sell it on the secondary market, Mr. Heins said. The company is a joint venture with San Francisco-based PMI Mortgage Insurance Co.

Next year CUNA Mutual said it plans to unveil a statistical system that can identify credit union members who, although considered a credit risk, would repay loans if possible.

"CUNA Mutual has a responsibility in helping credit unions make creditworthy loans to people who need them and who maybe as a group have a higher default rate," he said.

Just as it plans to offer credit unions new services, it's working to be more responsive as well.

For example, after complaints from credit unions that CUNA Mutual is too bureaucratic, it has reduced middle-management positions. Also, after Mr. Heins leaves, the company will reorganize staff along three main business lines: lending products, such as credit insurance; member services, such as mutual funds; and administrative services, such as employee benefits.

Last year USF&G Corp. challenged CUNA Mutual's virtual monopoly of the credit union surety bond business. So far it has snatched away only 30 credit unions, but the competition prompted CUNA Mutual to talk with credit unions across the country about improving the bond.

Based on those meetings, CUNA Mutual plans to change the bond in'two ways, Mr. Heins said: Offering a wider array of deductibles and changing its merit rating structure.

The reason for CUNA Mutual's dominant presence in the industry is largely due to its close links with the Credit Union National Association, the industry's largest trade group. The two entities are independent, but, as Mr. Heins said, "CUNA needs CUNA Mutual and CUNA Mutual needs CUNA."

Every year CUNA Mutual contributes about $600,000 to CUNA; the money goes toward research and other activities, such as its publications. CUNA Mutual also holds the lease to the trade group's Madison headquarters, where some association employees refer to the insurer as "Mother Mutual."

A search committee currently is narrowing down the candidates to succeed Mr. Heins, and a decision should be reached by November, he said. He said he plans to keep busy during retirement by writing a book, serving on the boards of some corporations, and -- if asked -- advising at CUNA Mutual.

Although he said he's ready to retire, it's plain Mr. Heins has enjoyed his 38-year ride.

"It's been a real thrill for me to see how the company has grown," he said.

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