Members Insurance Services, LLC, the insurance brokerage CUSO owned jointly by five credit unions and one savings bank (which converted from a CU charter) has reached profitability one year earlier than anticipated, said Barry Hughes, president of MIS and executive VP of IBM Southeast Employees FCU, located in Boca Raton, Florida.
In an age when costs and competition only seem to go up, how did that happen? “We keep our expenses very low,” said Hughes. “We only do business on the Internet or over the telephone. We have an office, but it’s not exactly in Boca’s high rent district.”
Following the link from the credit union’s Web site (www.ibmsecu.org) to Members’ own site (www.membersinsurance.com/), viewers are promised a quick response for quotes on Homeowners & Renters, Auto & Motorcycle and Watercraft coverage and competitively priced programs that “specifically meet your needs.” Discounts offered include those for good driving records, good student and Driver’s Ed training, multiple vehicles, anti-lock brakes, automatic seat belts and airbags.
Hughes said that inquiries are always answered within 24-hours. Members complete one questionnaire and get back a comprehensive report on which carriers offer the best coverage at the best price, he said.
And representing more than 26 nationally recognized insurance providers helps to provide competitive pricing. Members offers policies from Progressive, Vanguard, GMAC and First Floridian, among others, Hughes said.
Getting the business is the first hurdle, Hughes noted, but hanging on to it is deemed just as important a benchmark. “Our policy renewals are coming in and over 95% are renewing,” he said.
“Right now, we’re running at about 9% higher than anticipated on premiums being increased.”
It’s a tough business these days, he allowed. Insurance losses due to Hurricane Andrew still make writing policies for homes and businesses that are east of I-95 (the Atlantic ocean side) very expensive, if available at all. “All rates are going up. We’ve seen State Farm raise rates by 46% and quit writing policies in 21 states altogether. And while we’re able to beat their prices in North Florida, in South Florida, with its windstorm coverage east of I-95, it’s much harder. I think we’re writing about 50% of the business,” said Hughes.
Spreading out the risk pool is critical to providing better rates, Hughes said, and that’s why Members is seeking new credit union partners, especially ones from out of state, and only CUs above a certain size at that.
“We’re looking for credit unions in excess of 25,000 households,” he said. It’s just not viable for CUs with fewer numbers than that. But we are developing plans and proposals to service the memberships of smaller credit unions without the need for them to become a partner,” he said. The six Members’ partners are Atlantic Coast Federal, Waycross, Ga. (now a savings bank) Bay Gulf CU, Tampa, Tampa Bay FCU, IBM Southeast Employees FCU, Community Educators CU of Brevard, Rockledge, and Sarasota Coastal CU.