Guest post by Jeff Chesky, President & CEO, Insuritas
Strategies for selling insurance to credit union members are undergoing a radical transformation. Regulatory reforms are limiting or eliminating traditional sources of fee income, and that’s placing additional pressure on income sources like insurance sales to fill the gap and help with recapitalization efforts. Some credit unions are taking a hard look at insurance as a critical fee-income generator, reengineering their processes for selling insurance to members. Credit union executives won’t be able to avoid comprehensive insurance product sales much longer.
Today, a credit union’s insurance programs are often treated as a redheaded stepchild to its core businesses of deposit gathering, loan-making and investment advisory services. A credit union may have an AD&D mail campaign, GAP insurance, even term life. Some credit unions think the best strategy for generating more income from insurance is to squeeze better margins out of their current partners. Although adding a little to the bottom line, that strategy is short sighted. The nation’s leading credit unions are drastically expanding the insurance products they offer to members — creating a one-stop shopping experience for all of their members’ insurance needs.
With current sources of fee income increasingly constrained, pressure on net interest margins proving relentless and competitive incursions into your membership a daily challenge, it’s no longer a matter of if your credit union will provide a comprehensive insurance agency solution for your members but when.