Mennonite Weekly Review

GOSHEN, Ind. — Mennonite Mutual Aid’s 2008 financial results show a net loss of $3.2 million but also reveal long-term strength and stability, MMA leaders said.

“The loss in asset value negatively affects our investment management revenue going forward and is challenging us to make adjustments to our business model,” said Larry D. Miller, president and CEO, in MMA’s soon-to-be-released 2008 annual report and 2009 outlook.

“However, MMA is well-diversified with its significant annuity and health insurance lines of products, and not solely reliant on investment products, thus stabilizing our revenue stream.”

MMA had a net operating income gain of nearly $3 million before investment losses, which totaled $6.2 million in 2008.

“Our bond managers’ prudent risk-taking going into 2008 positioned MMA well in advance of this storm,” said Chad Horning, chief investment officer, in MMA’s annual report. “MMA plans for losses in its portfolios across business cycles, and we are grateful that losses to date have been contained and are within range of what we might expect during an economic downturn.”

At the end of 2008, MMA had more than $250 million in reserves designated for health, life and annuity obligations. The organization also had an additional $95 million in surplus.

“Fortunately, MMA’s financial situation is sound compared to many organizations today,” said Mel Claassen, senior vice president and chief financial officer, in the annual report. “MMA has reserves above the requirements established by insurance regulators and an additional significant surplus.

“Our reserves are there to provide strength for our members who depend on our financial stability to fund health insurance claims, life insurance claims and annuity payments.”

Miller acknowledged no one knows how long the recession will last or how bad it will be.

Yet, “MMA is not only weathering the turbulence, but is well positioned in this economic environment,” he said. “We remain financially stable and sound, and we are committed to remain financially strong and to be wise stewards of resources to assure our members we are willing and able to meet their future needs.”