MADISON, Wis.-While the rough economy may lead to higher insurance premiums for credit unions in the coming years, the hardships could also boost demand among members for insurance products.
"Regardless of where the economy is, there is a great opportunity for credit unions to work with their members more, and offer more products," said CUNA Mutual Group Senior Vice President Jack Goodwin.
He encouraged credit unions to ensure they look at the needs of their members based on geography or SEG, but one area that may be appealing for credit unions everywhere with members in all walks of life is GAP insurance.
Not Worth The Paper It Is Written On
"MSRP isn't worth the paper it is written on; it's more like whatever you can get for the car," said John Pearson, executive vice president at State National Companies. He stressed the importance of GAP in an economy where vehicles are depreciating rapidly to ensure both member and credit union are made whole in the event of theft or a major accident.
"It is a good product in this day in age," he added. "The other benefit to the credit union is that it is non-interest income, which they are pushing left, right and center."
According to Pearson, members are catching on to the resale market difficulties and are more eager to pursue GAP insurance.
"It's not a major arm twisting; it's a better buy now with the volatility with the prices of cars," Pearson said.
Uncertainty Reins
As uncertainty reins, members could go in two directions when it comes to their insurance-slash premiums to keep more money in their pockets or beef up their policies to make sure they get as much benefit as possible if something happens.
"Now is not the time as a private borrower to cut your premiums," Nick Grant, CEO of SWBC's Property & Casualty Division advised. "It is not the time to rebuild a house or replace a car with more money out of your pocket."
With members now more receptive to the message, cross-selling life and housing insurance at opportune times "not only provide value added benefits for the borrower, but can generate income for the credit union," he noted.
To better help members navigate troubled waters, Grant also suggested credit unions partner with wealth management firms. Those services are needed more than ever as members make tough decisions on where to invest their money in a turbulent marketplace.
