SRP in Insurance Biz
At one point, members of SRP Federal Credit Union had access to a hodge-podge of insurance products from different carriers offered through a bevy of third-party vendors.
The $694 million credit union in North Augusta, S.C., said it wanted more as its 103,678-member base continued to expand across the state and into Georgia. The goal was to build a comprehensive suite of insurance products to protect members, their families and their small businesses, according to Ed Templeton, president/CEO of SRP.
One of the main differences this time around was inviting multiple carriers to bid on a member's auto, home and business insurances to ensure that the best combination of price and coverage for the insurance they need to buy, year in and year out.
“Everyone was excited because they knew it was the right thing to do,” Templeton said.
After determining its new focus, SRP launched SRP Insurance Services LLC in March. Since then, the credit union said it has seen about 150 to 180 leads into the agency each month.
To help exceed those thresholds, SRP partnered with Insuritas, an East Windsor, Conn.-based firm that helps financial institutions set up their own insurance programs. The company runs the back-office operations, providing caller ID technology and management systems to provide members with quotes and other information.
“Their quote to sold ratio continues to increase,” said Angela Becker, Insuritas assistant vice president of client development, adding the agency's quote-to-sold ratio in May was more than 49%, which was above its goal of 39%.
SRP Insurance offers access to traditional auto, home, dental, health and life insurance but has also ventured into niche areas such as pet insurance and identity theft protection. Members can also get quotes on legal service plans, a network of licensed physicians for medical consultations and other non-traditional policies.
In addition to providing a shopping cart for insurance products that allows members to shop, compare and buy multiple products from multiple carriers with a single-check out experience, they can also create an online insurance record, according to Jeff Chesky, president/CEO of Insuritas.
Most activity came through word of mouth and the firm's website during the early months of the insurance agency's rollout, Becker said. The next phase is the deployment of a series of marketing and education campaigns that taps into when a member has an insurance need.
Since insurance can be a critical part of every loan transaction, these efforts will include targeted offers for insurance that is connected to SRP's lending program, according to the credit union. Another campaign will target a member when he or she is getting an insurance policy renewal notice in the mail, according to Becker.
“The traditional local agency model never has an agent calling a member and offering to requite their insurance to see if they can save time and money,” Chesky said.
Finally, the SRP insurance firm said it has deployed an entirely online insurance agency experience that will tap into online banking activity. The credit union will be testing digital marketing strategies as well, leveraging its ability to extend targeted insurance offers to members using an entirely digital platform when life cycle events would suggest they might need help.
“Since 100% of a credit union's members’ buys auto and home insurance from someone every year, it is important to have systematic marketing and communication campaigns that focus on the member's need for insurance when the timing is right,” Chesky said.
Before SRP Insurance Services got off the ground, there had to be buy-in from the top. Chesky said Templeton has taken personal responsibility for making sure that the members understand that that he has built a comprehensive insurance offering and that his members should never have to go outside the credit union for coverage.
“With 100% of a credit union's members buying auto and home insurance every year, it is a great when the CEO actively is engaged in promoting the idea of having a new insurance aisle in the store – obviously not a physical aisle,” Chesky said.
Staff commitment was so high at SRP, that Templeton believed his team would have it made it work, even if he didn't want to.
“I didn't have to motivate, they were prodding me to go faster. It was pure enthusiasm for the product and the product line,” he recalled.
Between weekly calls and on-site training, Templeton said he actively worked as a facilitator for his team, meeting with staff to make sure that each team member understood their responsibility, and working to ensure that everyone stayed on task while keeping the end goal in mind.
Becker said Templeton's involvement was invaluable to the launch of the insurance agency.
“He did a great job managing the people involved in the process, while also allowing me to work with the team members,” she said. “His expectations and his leadership were critical to a timely agency launch.”
According to some industry estimates, more than 60% of credit unions sell insurance products. Over the past year and a half, interest has increased in large part due to the cooperatives seeking strategies to open up new income streams.
Indeed, some credit unions are starting to turn to insurance as a source of fee income, Chesky said. For one, this source annuitizes, paying commissions year after year, as long as the agency is the broker of record on the policy, he explained. With auto policies inside credit union-owned insurance agencies enjoying a seven-year average duration, the fee income lasts more than twice as long as the net interest income on an auto policy while having no capital of repayment risk, he noted.
“Unlike the fee income from mortgages that can whipsaw violently with shifting market conditions, everyone buys their auto and home insurance every year, creating a very predictable fee income stream,” Chesky said.