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MADISON, Wis. – In recent years a number of corporate credit unions have moved their bond insurance away from CUNA Mutual and into the hands of other insurance companies. It’s a fact that worries CUNA Mutual CEO Jeff Post. “I think that corporates are kind of voting with their feet. They’re not real happy that we’re in their space,” said Post. Post is referring to CUNA Mutual Notes which offers corporates an opportunity to invest in Fitch-AA rated debt obligations from CUNA Mutual. That particular product is more in U.S. Central’s area than corporates themselves, although CUNA Mutual says the idea behind Notes is that corporates can pass on the yield through its own investments to natural person CUs. “Our intent was never really to compete with them. Sixty percent of investment dollars are outside the credit union space,” said Post. U.S. Central last year moved its coverage to a group of carriers led by Chubb Insurance. U.S. Central cited deeper coverage and a cost savings of $155,000. Other corporates have also pointed to price. At around the same time as U.S. Central moved last year, Northwest Corporate also chose another carrier, with cost being a primary factor. Some have left over cost and service. “We moved it a long time ago, maybe six years ago. At the time we kind of felt neglected, I didn’t think CUNA Mutual cared that much. I remember discovering that one other corporate already left, and so we decided to put it out for bid, and we did, and we got a real good quote,” said Mid-Atlantic Corporate FCU CEO Ed Fox. Mid-Atlantic is insured through Zurich. Post said six-digit cost savings should cause corporates to look at other carriers, but he has a problem if it becomes too bottomline oriented. “What bothers me more than anything else is if everyone is going to start making decisions on lower costs, I don’t care if you’re a credit union vendor or not, we’re going to pretty quickly as a movement fall apart,” said Post. “If I had to cost justify to the board the $35 million we put into the movement every year, it’d be difficult. But my board understands it’s for the good of the movement,” said Post, who comes most recently from Fireman’s Fund Insurance Company. He thinks the credit union space needs to embrace its cohesiveness or risk falling prey to the pitfalls of other industries. “We’ve been so successful as a movement, because we’ve stayed together. The insurance industry is a mess. They can’t get tort reform done, can’t agree on anything. If we start being all about price, we’re moving more in that direction.” However Post is a keen businessman and said CUNA Mutual needs to be competitive with other carriers for corporates and give them the service they deserve. He did say however that CUNA Mutual’s insurance is much more comprehensive than what other carriers offer. Add-ons include electronic computer crime protection and onsite risk management services. Some corporate leaders pointed out however that it’s rare that corporates even file claims because they have such high deductibles. Claims would typically come from some disaster-like situation. However there are more high-tech threats than ever, where CUNA Mutual’s computer crime coverage could play a factor. [email protected]

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