Unfinished Business [Credit Union Management]

Positioning insurance as a core financial service shapes marketing approach.

If you looked to the big players in the industry for a model, you might think marketing insurance hinges on finding the most memorable spokespeople - be they reassuringly deep -voiced, bouffantcoiffed, Neanderthal, or tiny, green and reptilian.

But credit union executives and their business partners say success in marketing insurance is less about clever campaigns and much more about delivering a fundamental message- that adequate insurance coverage is an essential part of protecting one's financial future, which is why credit unions offer insurance as part of a complete menu of financial services. At the same time, they recognize that positioning insurance as a core service can help CUs achieve their financial goals by offsetting revenue lost as a result of new regulatory restrictions and tight interest margins.

Building on Trust

Redwood Credit Union (www.redwoodcu.org), Santa Rosa, Calif., primarily markets the wide range of insurance products it offers in concert with other services: Get your auto loan and insurance here. Take advantage of low rates on a home equity loan and property insurance. Find deposit, loan and insurance services for your business. That approach is predicated on two strategic themes, says Robin McKenzie, SVP/marketing and communications for the $2 billion, 215,000-member credit union: Members are looking more holistically at managing their personal finances, and they value more than ever dealing with providers they trust.

"Trust has become that much more important over the last four years," McKenzie says. "Our aim is to let members know we can help them achieve financial wellness, and the more business they bring us, the more we can help them."

Redwood CU's insurance division and auto buying center are administered through its wholly owned subsidiary, RCU Services Group, which partners with CUES Supplier member SWBC (www.swbc.com), San Antonio, for insurance products. Offerings range from staples like life, home, auto and business insurance to coverage for veterinary bills and financial losses, should plans for wedding festivities go awry.

Staff training has been critical in ensuring branch and call center staffare familiar with the insurance products so they recognize possible referral cues. And Redwood CU's website is currently under construction to improve its insurance showcase and quick access to quotes to make cost comparisons easy.

To help get the conversation started, the CU has positioned eye-catching mats at teller stations with simple messages about its insurance products. On one, a fetching canine gazes up under the plea to "Protect Your Friend," with an invitation for a free pet insurance quote. The goal is to start a conversation with members remarking, "Oh, I didn't realize you offer insurance."

"It doesn't hurt that the dog is really cute," McKenzie adds with a laugh.

A major difference between marketing insurance and other financial products is that "there's not a season" when members are most likely to be thinking about their insurance needs, she notes. While the vast majority of members have insurance, they tend to think about it when life events happen- birth, death, marriage, buying a home or car, starting a business, getting a pet- or when their policies come due. McKenzie and her staff look into data clues for those life events to best match insurance products with members' needs. But it remains crucial to train front-line staff to listen for cues signaling that now might be a good time to remind members Redwood CU offers insurance and makes it easy to compare coverage and rates.

Insurance products are also offered alongside other financial services to new members who receive targeted offers over the first six months after joining. And the credit union gets a good response from a fairly simple vehicle - HTML e-mail facilitating a click-through for information about insurance products and a free quote.

"And whenever we can, we focus in all of our marketing efforts on featuring our own members talking about the benefits they receive from their membership and their relationship with Redwood CU," McKenzie adds. "I don't think there's anything stronger in terms of messaging than hearing the voices of real members in radio ads talking about the real benefits and savings."

'If it's Insurable, we Insure It'

At $3.5 billionUnited Nations Federal Credit Union (www.unfcu.org), Long Island Qty, N.Y., the emphasis is on offering insurance products specially designed to meet the unique needs of its global membershiplike the one-of-a-kind term life insurance program offered to credit cardholders. All cardholders need do is visit a special website (www.unfcu.org/lifecard) to enroll in the insurance program offered in conjunction with Clements Worldwide (www.clements.com).

The guaranteed-issue policies are valid in the more than 200 countries and territories where UN FCU's more than 95,000 members reside and work, including highrisk locations. In the first five months after the product was introduced in late October, 1,400 members enrolled in 132 countries, making it "the most successful CUSO product I've seen in the nine years I've been here," says Steve Ryerson, president of UNFCU Financial Advisors. "We used the available data on our credit cardholders, including income requirements in the higher tiers, to understand the demographics related to our members and develop this product in partnership with Clements and working with Lloyds of London."

Initially, the credit union had budgeted for 750 to 800 policies in the first year, but "now we think 3,000 is very doable," he says. The program already represents more than $200 million in coverage for members in 130 countries. Policies for Elite cardholders are available for up to $250,000, but the underwriter agreed to double the policy limits this spring to $500,000 and increase the age for coverage up to 70.

In addition to its 34,000 credit cardholders, UN FCU is now working on a similar program for its 57,000 debit cardholders, with coverage in the $100,000 to $200,000 range.

Beyond this new product, the CU offers a wide range of coverage, including auto insurance written to comply with regulations in various countries; kidnap and ransom protection; vacant home insurance for residences here and abroad; and trip transit coverage for international shipments of personal property, to name a few. Its insurance agency offers members plenty of choices as well, working with 40 life insurance providers to offer the best rates and coverage. "If it's insurable, we insure it," Ryerson says.

UN FCU employs an integrated, multichannel approach to get the word out about its insurance products, with in-branch displays, targeted direct mail with email follow-up, Internet banners and an online insurance center, says Jamie O'Donnell, AVP/member communication and research. Within its ATM network, members who swipe their credit cards and are not current policy holders are greeted with a banner about the cardbased life insurance program.

"Weekly emails sent out on Friday mornings are quite effective in driving traffic to the online insurance center over the weekend," O'Donnell says. The open rate on those emails averages 22 percent, with a 3 percent click-through rate to action.

Cross-sales are also part of the marketing mix. In 2010, UN FCU committed "to raise the bar on sales without sacrificing service, so we contracted with outside sales training to transform our front-line and back- office interactions to have more needs-based conversations with members," Ryerson explains. "When our members think about the risks they face and how to manage them, they look to us as a highly valued resource."

To help educate staff about the broad array of insurance options, the HR department has developed "product mastery guides" explaining the features and member benefits. "We're not looking for them to be experts, but they need to develop a basic understanding of those products," Ryerson says.

UN FCU has unique opportunities in the insurance arena through its sponsor ties, from bidding on insuring the UN's vehicle fleet in Egypt to consulting with its Office of Human Resources Management on emergency preparedness for personnel stationed around the globe. In addition, the CU's CUSO works with other credit unions interested in offering their members investment and insurance products.

"Credit unions have this enormous opportunity-almost an obligation if we want to be the primary financial institution - to completely address members' needs and be that primary trusted resource," Ryerson says.

More Choices, More Value

For $952 milhon/46,000-member Hanscom Federal Credit Union (www.hfcu.org), headquartered at Hanscom Air Force Base in Massachusetts, the decision to launch Hanscom Insurance Agency, LLC, in February hinged on the need "to find additional ways to provide value to members," says CUES member Scott Post, SVP/strategy and delivery. The credit union posted 12 percent asset growth in 2011 and has a 38.5 percent wallet share on loans and around 34 percent of members' total deposits, so it looks to this new product line to leverage those relationships.

Hanscom FCU partnered with Insuritas (www.insuritas.com), East Windsor, Conn., to take advantage of its turnkey solution for launching an agency with immediate access to a licensed agent and an online center that offers members quotes from up to five carriers for auto, homeowners and renters (including mobile home coverage, given the demographics and mobility of the CU's core membership), life, long-term care, business, health, vision and dental insurance.

The credit union sold its first policy within 20 minutes of unfurling its Web banner - "we were able to save the member a substantial amount of money," Post says- and a dozen insurance products in its first week.

The CU is continuing to get the word out about this new product line through its member newsletter, direct mail, and email announcements and through seminars with its major SEGs, military personnel and federal employees. Positioning insurance offerings alongside other products- from auto loans to thrift savings plans- will help CU members achieve a fundamental financial goal: "making sure the needs of their family are taken care of," Post says.

Timing will likely play a central role in Hanscom FCU's efforts to guide members to take advantage of insurance price comparisons, he adds. "Most people don't shift mid-policy, so our goal is to target them at time of renewal or acquisitionwhen they buy a home or car."

As the base of members who can share stories of saving time and money by switching their insurance through the credit union grows, Hanscom FCU plans to build on the power of referrals, not just among members but with other friends and family, Post says. Because this product line is offered through a CUSO, it can cater to nonmembers, which may ultimately be a path to build membership as well. The model is that the first members to sign on for insurance will become "our ambassadors for financial services and insurance in the future."

Offering a one-stop shop where members can get the financial products they need at the best possible price is consistent with the credit union's educational approach to help members "be money wiser," he adds. "Our board is very big on making sure we have the products and services that meet members' needs. Our aim is for a positive return, but we don't set specific, quantitative sales goals. It sounds undisciplined, but actually it's worked very well for us in the past."

Fundamental Questions

Jeffrey Chesky, president/CEO of Insuritas, says CUs need to tackle three central issues to make the most of this product line:

1. Decide whether you're in the insurance business.

2. Decide what level of commitment to make to that product line.

3. Come up with a plan to let members know you offer insurance when they're most likely to be thinking about those products.

On the first point, Chesky suggests CEOs and the executive team have two main choices: (1) limit their insurance lines to "one-off" products such as credit life and disability and gap coverage or (2) "commit to insurance as a permanent aisle in the store."

"Once you've embraced the idea that insurance needs to be as important a product as deposits and loans- once you cross that threshold- the opportunities to market insurance products get much easier," he says. "And this has to come from the topa signal from the 'C-suite' that insurance is a core product. That can be a huge change in perspective."

Credit unions looking to leverage income from insurance products to compensate for recent regulatory revenue restrictions and tight margins may be especially ready to step through that door- and to take the next step to commit to a full suite of insurance products. Toward that end, Chesky contends that insurance product offerings should be as robust as investment services.

"You need to own your own agency so that your members never have to leave your store to look for a product you don't have," he says. "You need to offer every risk management product your members need."

A ready advantage of offering a full line of insurance products is that virtually all members are in the market for auto, home, life and business insurance, and "the beauty of the most successful agency deployments is that selling one product will prompt the discussion about the other insurance products available"- from dental and vision coverage to pet or wedding insurance - Chesky notes.

To sell that first product, he recommends integrating insurance as a core product by making the offer of a free, no-obligation insurance quote part of the loan process. "When every borrower gets an insurance quote with their auto or home loan, the results are striking," he says. "This is not a sales exercise, but a marketing and education exercise, and it saves members so much time when they've got 1,000 other things to do."

In addition to providing proof of insurance at loan closing, the other time most members think about insurance is when their premiums come due, so that's the other best time for credit unions to communicate with members about their insurance offerings. CUs may be able to mine information about their members' policy renewal dates as they comply with requirements for protecting collateral. Or they can just ask members for that information and let them know the credit union will send them an email and postcard offering a free quote to compare at that time.

Once you have made the commitment to insurance, Chesky has one final suggestion: Change your signage to convey the complete scope of financial services the credit union offers members: Deposits, Loans, Investments, Insurance.

"Once you've embraced the idea that insurance needs to be as important a product as deposits and loans ... the opportunities to market insurance products get much easier."

Jeffrey Chesky

Resources

Read Web-only bonus coverage at cues.org/052512marketinginsurance.

Karen BankstonStoughton, Wis.