LAS VEGAS - During NACUSO’s annual meeting here, the Credit Union Journal asked attendees: Is your CUSO making money for the credit union?
Yes, it is having a positive effect on our bottom line. We have an insurance CUSO. We run GAP and mechanical breakdown insurance through the CUSO–those are products we sell on our auto loans. We set up the CUSO because of UBIT. We have created another CUSO, which we haven’t unveiled yet. It will be something the credit union industry has not seen.
We work with LCU Financial Services, a CUSO for Eli Lilly Federal Credit Union, the pharmaceutical company. The credit union approached us last year because many of its members were asking for pet insurance.
We currently have about 50 policyholders from the credit union. We are linked to their website, they have featured us in their newsletter, and we put collateral materials in their lobby. If a credit union has a PNC, or property and casualty, license, we pay a commission on what policies members sign up for.
Our CUSO has had a positive impact. We received many requests for pet insurance, so being able to offer this benefit helps us serve our sponsor–and we are a single-sponsor credit union. The fiscal impact has not been that large, but it has only been 12 months. It might not be going gangbusters on revenue, but from a PR perspective, it has been great.
We make money. We offer financial services and insurance products through third-party vendor relationships. We incorporated the CUSO in 1997. For some of our most popular insurance products, 30% of members use them. The percentage is much smaller for our other products. We are one of the best kept secrets of the organization.
Our CUSO is making money. We have two lines of business. The first is insurance, which includes credit life, CPI, AD&D and many others. We sell insurance to consumers and to small businesses.
We also operate RCU Auto Services, which has an auto lot where we sell repos from our credit union and other credit unions. We also use RCU Auto Services to broker new and used auto sales.
The CUSO formed in 2000. At first, we sold insurance and investments. We broke the investments operation back to the credit union. Then, in December 2004, we started RCU Auto Services. We have a growing bottom line.
It is not where we want it to be, but it is going in the right direction. Our first really strong bottom line was last year. We focused on getting the right products, and we partnered with Jack Henry for our property and casualty insurance.
Focus was the most important element.
