QBE gets foot on credit union insurance

QBE Insurance Group announced yesterday that it had agreed to acquire the Australian operations of insurer CUNA Mutual Group.

CUNA Mutual Australia, which has operated in Australia since 1969, provides white label insurance services to building societies and credit unions - a market which QBE is targeting for growth.

QBE said its existing financial institutions business, combined with that of CUNA, would generate A$80 million worth of gross written premiums this year.

Data from the Australian Prudential Regulation Authority shows a slightly higher level of gross premium revenue, of $89 million, in the year to June 2010.

CUNA Mutual Australia incurred a loss of $1.7 million over that period. CUNA made an underwriting profit in 2010, based on APRA data. The insurer made a profit of $9.4 million the year before.

APRA put CUNA's shareholder's equity at $39.4 million at June 2010.

In 2006, CUNA got involved in a $100 million preference share and subordinated debt-raising that was shared by 21 credit unions. CUNA acted as the manager of the special purpose trust established to do the deal.