We consistently hear from our credit union partners that they continue to focus on ways to differentiate themselves in a commoditized market. This is a challenge.
New competitors are entering daily, additional noninterest income is difficult to find, many traditional profit engines are at risk, and connections with members are increasingly complex especially during a time when consumer preferences and technology are changing faster than ever.
To keep up with the ever-changing environment, credit unions continue to focus on how they can increase member loyalty while driving profitable growth. Those that can find ways to do both will end up differentiating themselves.
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Offering insurance products to members can be a successful way for credit unions to increase member-friendly noninterest income. Members consistently look to their credit unions to help save for and finance life events, so it is only natural they would consider the same resource to help protect those moments.
Building on member trust, credit unions can not only generate more noninterest income from insurance programs, but build and enhance the member experience as well. That's why it's important to focus on increasing members' awareness that they can get valuable, affordable and appropriate insurance products from a source they trust to protect life's big moments.
For example, there are two things a member needs to purchase a new vehicle: proof of financing and proof of insurance. Through a multi-media approach, the credit union can provide auto insurance offer regardless of which channel a member chooses. Members can get an online quote when browsing the credit union's website for loan rates, apply for insurance at the end of their electronic loan application or receive a referral from a credit union employee as part of the loan process. Each of these provides not only an opportunity for the credit union to deliver a relevant product for their member, but also one that complements the credit union's core business.
A recent marriage is another key life event. At a number of different member's touch points, credit union employees may discover a recent wedding. They may notice that a member adds another person to an existing account. Regardless of whether this happens in the physical branch, by phone or online, an opportunity exists for credit unions to create awareness of the importance of life insurance.
Even something as simple as an appropriately placed Web advertisement or a credit union employee referral can make a big difference in both the member experience and noninterest income. But it doesn't end with a life insurance purchase. A recent research study we sponsored shows newly married couples will buy that first car together in 2.5 years and then a home in three to four years. Not only are those events lending opportunities, but meaningful ways to generate noninterest income from products your members need and trust.
We're encouraged by future potential. By offering insurance, credit unions strengthen their member loyalty, drive profit and protect what matters most to their members.
Alan Bergstrom is director of brand & creative services for Direct to Consumer for CUNA Mutual Group.
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