Credit unions have three motivations to sell insurance products, says Tyreo Harrison: improving profit margins, rounding out product offerings, or seeing rivals introduce insurance programs.
Harrison, executive vice president of The Financial Institution Group at SWBC, says about 80% of credit unions offer some form of insurance.
“It used to be that they’d connect with one or two agencies, then take income from the referral,” he says. “But these days, credit unions want more. They want to be able to connect to many carriers on a branded site. That’s where we come in.”
Brian Werger offers an additional insight about credit unions’ presence in the insurance market.
“Credit unions are facing competition, strict regulatory requirements, and growing expenses—they need a means of providing noninterest income that is beneficial to members,” says Werger, director of the TruStage insurance program at CUNA Mutual Group.
“We stress that one job of credit unions is to protect their members with insurance products,” he adds. “Strategically, most credit unions are trying to increase noninterest income or increase product sales per member.
The need for speed
“We’re transparent and we’re fast— our speed of response is under a minute,” says Harrison. “The goal is to prevent a member from pulling a quote for an insurance policy from a credit union website and then going elsewhere to look for a lower price. A response that takes only one minute makes it 10 times more likely that a member will stop and buy a policy at the credit union site.”
A quick response is necessary, Werger says, because we live in an era of convenience.
“When I was younger and purchasing life insurance, the process took six weeks: Fill out the application, undergo a medical exam, receive a letter of approval, mail back a payment, wait to receive a formal policy. How many millennials do you think would put up with that?” he asks.
“Now, you can go online and apply for insurance in a process that takes only minutes,” Werger adds. “In the case of life insurance, where there might be a couple of questions about general health, an applicant listing an existing condition—such as diabetes—can ‘pivot’ to a guaranteed product application.”
Werger believes an effective insurance-purchase page on a credit union’s website should be designed to handle the three basic questions members ask when they are searching for insurance options: