Credit union loan growth trends illustrate an important opportunity for credit unions to increase sales of loan protection products and offer peace of mind to members as they refinance and obtain new loans at the credit union. With tighter margins, credit unions have focused on insurance products to boost non-interest income. Despite the increasing importance of these products to the credit union bottom line, little is known about the relative success that credit unions are having with marketing these products to members.
In a 2006 Callahan & Associates auto lending survey, 93 percent of respondents reported offering more than one type of insurance product. At least three quarters of credit unions offer Mechanical Breakdown Insurance (MBI) / Extended Warranty (73%), Guaranteed Auto Protection (85%), and Credit / Life Disability (96%) products to their members.
Credit unions have varying results in selling or packaging insurance with auto loans. On average, 28% of auto loans included one or more insurance products. As shown in the chart below, performance varies, with almost half (49%) of the credit unions reporting that these products are sold with 20% or fewer of their loans.
Understand Your Performance and Ways to Improve it!
Callahan & Associates in partnership with Snyder Consulting Solutions, LLC invites you to participate in the industry's most comprehensive credit union loan protection product benchmarking study. The resulting report will help your credit union answer key questions about these products and your overall program, including:
- How do my credit union's sales penetration rates compare to my peers?
- Which products are credit unions having the greatest success with? Why?
- How do our expenses compare to similarly sized programs?
- What types of sales incentives are effective?
Participating credit unions will be able to attend a complimentary webinar featuring a discussion of the results. Participants will also receive a $100 discount off the customized report, which includes performance benchmarks and key ratios for your credit union and its peers. You can participate via this link or find more information here. Please plan to have your response in by October 17.