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Loyalty bonus from CUNA Mutual


23 Feb 16

CUNA Mutual is once more paying a loyalty bonus to credit unions in the Guaranteed ABCUL Pool for Loan Protection and Life Savings insurance.

For the second year in a row, CUNA Mutual – the global credit union insurance provider – will pay a rebate equal to a full month’s premium for January 2016 to ABCUL member credit unions who offer Loan Protection and Life Savings insurance as part of the CUNA Mutual ABCUL Pool.

This second rebate means that credit unions in the ABCUL Pool will have shared a combined loyalty bonus worth almost £500,000 over the last 13 months. It will be paid to all participating ABCUL Pool Credit Unions at the beginning of March 2016.

The loyalty bonus is equivalent to an average rebate of 68% on credit unions’ ABCUL membership dues, and for a number of credit unions, the rebate is actually greater than the amount they pay for their annual ABCUL dues.

In other words, for many credit unions, the cost of ABCUL membership is almost covered by this exclusive member benefit alone – and in some cases, it’s more than covered.

Three years ago, ABCUL and CUNA Mutual worked on re-designing the Loan Protection and Life Savings programmes with three objectives in mind:

  • To guarantee that ABCUL-member credit unions, regardless of size or situation, would be able to obtain affordable Loan Protection and Life Savings protection.
  • Increase the simplicity of rates and benefits.
  • Provide credit unions greater peace of mind by increasing the stability of premiums, ensuring they remain affordable over the long term.

When the Pool was launched, every ABCUL member credit union at that time was given the option of joining the Pool. For those that chose not to, it made commercial sense to remain individually rated.

By creating the Guaranteed Pool, ABCUL enables credit unions to benefit from spreading the risk and avoiding peaks and troughs of claims performance at an individual level. This creates stability of rates, and means all participants benefit from this pooling of resources.

The new programme has exceeded expectations on these objectives and – because it is offered by a mutual provider – the Pool’s good performance has seen these substantial loyalty rebates being paid to ABCUL-member credit unions.

ABCUL Chief Executive Mark Lyonette said: “We’re proud to work with CUNA Mutual to help credit unions affordably offer Loan Protection and Life Savings Insurance, and to give the peace of mind they provide to hundreds of thousands of credit union members and their families. Our credit unions are differentiating themselves by helping thousands of families each year deal with the financial burden associated with bereavement.

“The success of the ABCUL Pool – including this very substantial loyalty rebate – is testament to the benefits of co-operation, and this unique programme delivers exceptional, real value to our member credit unions.”

CUNA Mutual Europe Chief Executive Paul Walsh (pictured) said: “I’d like to express our thanks to all at ABCUL; to Mark, his team and the Board for working with us in making this a stronger and more sustainable protection programme that’s open to ABCUL credit unions, regardless of size.

“By creating a strong and robust pool of credit unions for Life Savings and Loan Protection by leveraging the scale of the combined ABCUL credit union group, CUNA Mutual have been able to provide all our credit unions with a fair, inclusive and sustainable benefits programme. This is strength through co-operation in practice.”

Loan Protection Insurance covers credit unions when a member dies with a loan outstanding, which means the debt dies with the debtor and the estate is not pursued.

Life Savings Insurance means that credit unions that offer this benefit pay a single lump sum to a member’s nominated beneficiary upon death, which is based on the value of the member’s shares (or savings) in the credit union, and can assist family members with additional funds to support end of life expenses at the very time they need some comfort, support and assistance.

149 ABCUL member credit unions are in the Pool and have these policies with CUNA Mutual to provide significant benefit and comfort to their members, and all those credit unions are eligible to benefit from the loyalty bonus.

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