MADISON, Wis. – With Corporate America's nose bloodied by playing with numbers, this is no time to make things seem better than they are, said Jeff Holley, CFO for CUNA Mutual Group. Holley said CUNA Mutual had a solid 2001, but its bottomline was definitely hurt by poor performing investments. Company revenue increased 5.7% from $8.8 billion in 2000 to $9.3 billion in 2001. Its profits however were flat. A big reason for that was about a $20 million drop in investment income. CUNA Mutual has an $8.6 billion investment portfolio. "Last year was pretty challenging for a lot of companies, including CUNA Mutual," said Holley. "We were looking for about 15% growth in profitability. We didn't achieve that because of 9/11 and the economy." Claims resulting from 9/11 will tally about $6 million when all is said and done, said Holley. The drop in investment income was clearly a bigger factor in the bottomline. Though very diverse and it bills it self as a financial services provider, insurance is still the company's biggest area of business. It paid out $2.065 billion in claims last year (about $8 million a day), down slightly from approximately $2.144 billion in 2000. Holley said the company is concerned about increased claims resulting from fraud, such as fraudulent deposits. "We've had some pretty negative experience in fraudulent deposits. We have to make some decisions as to whether or not we raise prices or increase deductibles," he said. It had 257,538 claims for either credit life/disability, loan protection and life savings insurance to a price tag of approximately $455 million. Life insurance in force increased from $109 billion to $111 billion. Holley said CUNA Mutual had a successful year on many fronts that won't show up in the balance sheet. It expanded into new areas with subsidiaries such as MEMBERS Development Company, which made a major entre into account aggregation last year through a partnership with Yodlee. MEMBERS Development is actually owned jointly by CUNA Mutual and 49 CUs/CUSOs "We invested $50 million in new initiatives last year," said Holley, and the company expects that investment to pay off financially over the years. CUNA Mutual also entered the corporate credit union investment arena last year through its CUNA Mutual Group Notes program. At year-end corporates had invested about $240 million in the program. Despite a tough year on the securities front, CUNA Mutual's MEMBERS Capital Advisors had a number of its mutual funds recognized as leaders by Mutual Funds magazine and Lipper. Assets in the funds increased 46% to $689 million. One very bright spot last year was CUNA Mutual Mortgage Corporation, which saw loan volume go from $530 million in 2000, to $1.95 trillion in 2001. While profits were flat last year, hiring was anything but. The company added 578 full-time equivalent employees nationwide in 2001. Of that figure, 163 of them were MEMBERS Financial Services reps, a major initiative CUNA Mutual launched to replace and expand on its old Plan America program. The company now has over 5,000 employees, with about 2,700 located in Madison. Despite adding all those new employees, operating expenses were kept in check at about $715 million, up from about $714 million last year. On the charity front, CUNA Mutual Group Foundation contributed $750,000 to 224 non-profits, and made a five-year $500,000 commitment to the Worldwide Foundation of Credit Unions. [email protected]