EAST WINDSOR, Conn. — Though some credit unions may not be thinking about insurance, the major insurance companies are definitely thinking about those basic PFI services credit unions offer, and may be poised to swoop in and steal that business.
That's the word from Jeff Chesky, CEO at Insuritas, who reminded that State Farm, AAA and others have already begun a push to make sure consumers know that they offer home banking services-including mobile and other e-services-along with traditional insurance products.
"If [credit unions] approve auto loans and send the borrower out of the store to go get an auto insurance quote before funding and the State Farm folks now say 'Can I see if I can reduce your monthly payment on your car loan?' for credit unions, the risk of competitive incursion is huge," said Chesky.
Insurance, he continued, "is the only financial product that 100% of the customers or members buy from somebody every year. Until a CEO can actually say that some double-digit percentage of their members buy insurance from [the CU's] agency, they've got lots of work ahead of them-and lots of money to make."
An Effective Strategy
Credit unions must take certain steps, however, if they're going to effectively deploy an insurance strategy, said Chesky. First and foremost, he said the CEO-along with the rest of the executive management team and the board-must think of insurance with the same discipline and energy that they do deposit gathering and loan making.
"If a CEO doesn't own it, don't be in the business," said Chesky.
Secondly, make sure to offer insurance at appropriate times-specifically timed to when members are completing a loan transaction or when they receive renewal notices in the mail for their current insurance policies.
Chesky also advised credit unions to make sure their insurance products "are stitched into the fabric of the credit union's web portal."
Credit Union websites "get thousands of free eyeballs every day," he said, which means if credit unions aren't promoting their insurance products on their website, they're missing a major opportunity to make sure members know those services are available.
"Where the incredible power for credit unions comes from is providing advocacy for price transparency," said Chesky. "Credit unions have built up a wealth of credibility for putting the member first. They are perfectly positioned to force carriers to bid on their members' insurance and provide complete pricing transparency so that credit unions can do for home and auto insurance what Orbitz and Expedia and Travelocity did for travel."
Chesky reminded that insurance isn't just vital for members-it's also crucial for those at the executive level.
"At the end of the day, I say to CEOs that if you don't get into this business, your successor will-because you will not be a CEO at a credit union within the next three to five years and not have this fee income coming in."
