This ‘Add-on’ can address mounting revenue pressure.

June, 2016

Dallas, Texas

As credit unions face mounting revenue pressure, one analyst contends that adding insurance products to the mix can be key to generating the additional income being sought while at the same time also deepening relationships.

“Credit unions recognize that the traditional model of loan and investment income combined with fee income is no longer a viable long-term strategy,” asserted Kevin Scott COO of Institution Solutions. “The question must be asked, ‘Which meaningful complementary services tied to the core credit union functions can be leveraged to increase member profitability?’ Insurance products directly answer that question.”

More Services = Deeper Relationships

Scott said that industry studies indicate that the higher the number of service channels utilized by a member, the deeper the relationship.

“Rich, multilayered relationships are the most profitable and most secure,” said Scott, whose company provides insurance products to credit unions.

Scott emphasized that there are two primary methods by which a credit union can grow: attract new members, which is costly, or increase profitability of the existing membership.

“Insurance products offer a common-sense, next-logical-step solution to achieve both member retention and profitability,” he said.

New income from insurance products also helps diversify the credit union’s risk concentration, contended Scott.

“And 2015 was an excellent year of growth in credit union lending,” noted Scott, who said that the growing loan business opens doors for more insurance offerings, such as GAP coverage for auto loans.

Logical Addition

Scott said that CUs offering insurance not only increase the cooperative’s profile within the community, it’s a logical product line addition.

“We live in a hyper-competitive industry,” said Scott. “Now is the time to gain relevance to your members by offering a service that every one of them must purchase anyway. Credit unions care for their members’ wellbeing. An in-house, independent agency allows a credit union to deliver the best insurance products and price combination to its members.”

For more information contact,

Institution Solutions Media Contact:

Rebecca Christenson,
Marketing and Communications Manager
Rchristenson@isillc.com
214-431-5411

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