The Insurer Financial Strength rating of CUNA Mutual Insurance Society and its wholly owned property casualty subsidiary CUMIS Insurance Society, Inc. has been downgraded from AA- to A by Fitch Ratings.
The rating outlook was also downgraded from stable to negative.
The downgrades were a result of Fitch's concern over CUNA Mutual's above-average exposure to residential mortgage backed securities and asset backed securities. Both areas have experienced significant credit deterioration in 2008 and year-to-date 2009.
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CUNA Mutual reported a $148.9 million net loss in 2008 compared to $183.6 million of net income in 2007, which reflects deterioration in its invest portfolio along with lower earnings in its asset accumulation and commercial products. Fitch announced that is expects investment market conditions to continue to adversely impact CUNA Mutual's earnings during 2009.
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