The Co-operators Group is assuming full ownership of the insurance operations of The CUMIS Group Ltd., a provider of insurance products to the Canadian credit union system, from co-owner Central 1 Credit Union. The Co-operators returns to Central 1 the proceeds of its 27% interest in the insurance operations of CUMIS.
Since 2009, Guelph, Ont-based Co-operators and Vancouver-based Central 1 have been joint owners of the insurance firm. When the deal closes, CUMIS General Insurance Co. and CUMIS Life Insurance Co. will become fully owned subsidiaries of Co-operators.
In a news release, both Co-operators and Central 1 indicate that the deal was made to strengthen each firm’s respective core business.
“This change simplifies our structure and operations,” says Rob Wesseling, president and CEO of Co-operators. “We continue to enjoy a strong relationship with Central 1 through our shared interest in Aviso Wealth, and mutual commitment to credit unions.”
In December, Qtrade Financial Inc., Credential Financial Inc. and NEI Investments announced that they were merging to create Aviso Wealth, a wealth-management provider for the Canadian credit union (CU) system. Credential is owned by the Canadian credit union centrals, including Central 1, and by CUMIS.
Co-operators says that it will retain the CUMIS brand in the credit union marketplace after the deal closes, which is expected to occur by March 31, subject to approval from regulators.
“The Co-operators has recognized the strength and significance of the CUMIS brand for many years; it was part of the reason we sought to acquire CUMIS almost a decade ago,” Wesseling says, in a statement. “We remain deeply invested in the success of credit unions, and our products and services will continue to evolve to meet their needs.”
For Central 1, the divestiture of its ownership stake in CUMIS will allow it to better concentrate its efforts on the delivery of core products and services.
“This shift allows us to focus our attention and resources on banking and payments solutions that provide the greatest value to our clients and their customers,” says Mark Blucher, CEO of Central 1, who took over the reins of the credit union central in January.
Central 1 has recently articulated a strategic plan to become “the national partner of choice for financial, digital banking and payment solutions” for its credit union partners and their members.