In an apparent first, two San Francisco operations a credit union and a Web insurance company have developed a service that automatically offers insurance quotes to people who apply for car loans online.
We found our members were most likely to think about auto insurance when they were applying for a car loan, said Scott Waite, the chief financial officer of Patelco Credit Union. That is partly because $2.2 billion-asset Patelco, like most lenders, requires proof of insurance to get the loan, he said.
The automatic-quote feature was developed with the help of Esurance Inc., which also sells insurance through links on other lenders sites but only to customers who key in information specifically to get them.
Patelcos 190,000 members come mostly from the technology and telecommunications industries, and they include a lot of Web users. As of last month about 40% of them had signed up to use the credit unions site.
Mr. Waite, who is a senior vice president, said Patelco wanted to make the borrowing-and-insuring process as easy and seamless as possible. We didnt want our members to have to type in redundant information.
The Patelco site has included online lending since March 1999. The car insurance service went live Monday.
Now, when a member enters personal data into the auto loan area, Esurance provides a preliminary insurance quote based on the kind of car the customer wants to buy. For a more detailed quote, members can click over to the Esurance site and the relevant data are automatically transferred to an Esurance auto insurance application.
A customer who decides to buy insurance from Esurance can do so right then and there. Esurance emails the policy to the customer, and the email can be used as proof of insurance for the auto loan, Mr. Waite said.
The whole process getting the loan and the insurance can be completed in a few minutes, he said. Customers who decide not to buy insurance can go back to the loan site, and none of their information is lost, he said.
For those who want to apply for an auto loan in one of the credit unions 29 branches, the same system is used on the loan officers desktop, he said. The loan officer helps the customer through the process, including getting the insurance quote.
Before the partnership with Esurance, Patelco already offered auto insurance from American Express Property-Casualty Cos. by direct mail. It also offered a range of other insurance products, including life, health, and homeowners policies.
It will continue to sell the Amex auto insurance, Mr. Waite said, but Amex was not developing the integrated online technology Patelco wanted fast enough.
He said the credit union may also form partnerships to offer appropriate insurance while making other kinds of loans homeowners insurance for mortgage applicants, for example. Esurance now offers only auto insurance, he noted.
Thomas Capp, Esurances director of national accounts, said: Insurance is something you want to make more convenient. If you can do both the insurance and the loan at the same time, and make it easier for the customer, then you have a better chance of closing both of those sales.
Mr. Waite agreed. Some members will go through an auto loan process and then may not be able to complete it for lack of insurance information, he said they dont have insurance, or they dont have the information with them. Offering insurance along with the loan can help Patelco close more loans, he said.
Esurances interest in working with credit unions also makes it a good partner, Mr. Waite said. In May, after announcing a deal to put a link for its insurance sales site on the Web site of $500 million-asset California Coast Credit Union in San Diego, the insurance company said it wanted to work with more credit unions.
Todd Eyler, a senior analyst at Forrester Research Inc. in Cambridge, Mass., said Patelcos integrated loan and insurance offering is unique.
It makes a lot of sense, because it makes both the loan product and the auto product less commodity-like, he said. When you bundle two products like that, it provides point of sale convenience for the customer.
Buying two products will also tie customers more closely to the credit union and help it make more loans, he said.
He predicted that banks and other credit unions will build such combined sites as they look for ways to cross-sell their banking and insurance products.
The technology is not very complex, Mr. Eyler said, but few financial institutions have pursued it, because insurance practices at banks have been run as very separate businesses with very limited integration with other parts of the bank.
