Press Release - FEBRUARY 28, 2017

A.M. Best Affirms Credit Ratings of Subsidiaries of CUNA Mutual Holding Company


CONTACTS:
 Keith Behrmann
Financial Analyst—L/H
+1 908 439 2200, ext. 5733
keith.behrmann@ambest.com

Adrienne Tortoriello
Senior Financial Analyst—P/C
+1 908 439 2200, ext. 5088
adrienne.tortoriello@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - FEBRUARY 28, 2017
A.M. Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of CMFG Life Insurance Company (CMFG Life), the lead life and annuity insurance writer, and MEMBERS Life Insurance Company (Members Life), a life and annuity subsidiary, as well as CUMIS Insurance Society, Inc. (CUMIS), the lead property/casualty writer, and CUMIS Specialty Insurance Company, Inc. (CUMIS Specialty), a property/casualty subsidiary. Concurrently, A.M. Best has affirmed the Long-Term ICR of “bbb” of CUNA Mutual Financial Group, Inc., an intermediate holding company within the group. Additionally, A.M. Best has affirmed the Long-Term Issue Credit Rating of “bbb+” on the $85 million, 8.5% surplus notes issued by CMFG Life due 2030. The outlook of these Credit Ratings (ratings) is stable. The ultimate parent for all companies is CUNA Mutual Holding Company. All operating companies are domiciled in Iowa but are headquartered in Madison, WI.

The ratings of CMFG Life reflect the company’s position as the leading provider of insurance and financial services products to credit unions, their employees and members. Furthermore, CMFG Life has reported favorable growth in its new product offerings, particularly its annuities issued through Members Life, which provides sales and earnings diversification, and offsets premium losses from discontinued product lines. CMFG Life’s capital position has been consistently increasing in recent periods and is more than adequate to support its insurance, investment and business risks.

Partially offsetting these positive rating factors is the increasing concentration of the business profile, as the organization has divested of several operations that do not align with its business strategy. Consolidated operations have been fairly stable; however, the company has experienced volatility within its core lines of business. Furthermore, A.M. Best notes that CMFG Life maintains some exposure to legacy long-term care, and variable annuities with guaranteed benefits that are viewed as higher-risk products, which could impact earnings and reserves in the challenging macro-economic environment.

The ratings for CUMIS and CUMIS Specialty reflect their favorable level of risk-adjusted capitalization, overall operating profitability and well-established position in the credit union segment. The ratings also reflect the benefits CUMIS derives from the financial flexibility and diversified operations of its parent, CMFG Life. These rating factors are offset partially by the execution risk associated with growing its personal lines business, and pressure from general macroeconomic trends and varying market conditions in several of its product lines.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


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