Unleashing the power of personal lines insurance
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Unleashing the Power of Personal Lines Insurance . Keith Kremers February, 2008 Wendy McCurdy, Moderator. Agenda. Today’s Personal Lines Insurance Marketplace Challenges for Credit Unions and CUSOs Potential Solutions. Poll #1. Polling Question #1:.

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Unleashing the power of personal lines insurance l.jpg

Unleashing the Powerof Personal Lines Insurance

Keith Kremers

February, 2008

Wendy McCurdy, Moderator

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  • Today’s Personal Lines Insurance Marketplace

  • Challenges for Credit Unions and CUSOs

  • Potential Solutions

Poll #1

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Polling Question #1:

Do you currently have a relationship with an agency or agents?

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Global Players


Trusted Insurance

Local Institutions

Financial Services Industry – TODAY!

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Who Controls the US Personal Auto Insurance Market?

Poll #2

Source: National Association of Insurance Commissioners Data 2006. All Private-Passenger Auto

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Polling Question #2:

Have any of your members refinanced loans through their insurance provider?

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What’s Competition Doing in Mailbox?

  • 7+ billion insurance solicitations in ’06

    • “Average” 60 per households (HH) annually

      • Assumes all HH were being solicited

      • Actual numbers 2x-3x this for highly desirable demographics – think credit cards!

    • Includes 3 billion Life, over 2 billion Auto and 240 million AD&D

      • GEICO mails approximately 800 Million – alone!

      • GEICO spends $37.66 per NCA*

        *NCA= new customer acquisition


United States Postal Service http://www.usps.com/, DM News – key trade magazine http://www.dmnews.com/, Direct Marketing Association http://www.the-dma.org/

The “Bible” of Direct Marketing “Successful Direct Marketing Methods” by Bob Stone

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Challenges of Credit Unions and CUSOs

  • Revenue

  • Economic resources

  • Product distribution/member access

  • Attaining scale

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  • Tightening margins in credit unions have made positive income from insurance operations a must!

  • Average commission is 14% new and renewal

  • On average, personal lines agencies delivers 10.8% profit to bottom line

  • Increased focus on products per household

Source: The National Alliance Research Academy "Insurance Agency Growth and Performance Standards” 2006-2007

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Economic Resources

  • Inadequate to secure growth

  • Inadequate to staff for administrative functions

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Product Distribution/Member Access

  • Unable to support call center with extensive hours of availability

  • Unable to support wide network of local agents

  • Unable to support distribution demanded by today’s insurance buyer

Poll #3

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Polling Question #3:

Which of the following methods does your agency use to market property and casualty insurance?

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  • Hours of operation vs. member demand

  • Licensing

  • Call center support

  • Marketing

Poll #4

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Polling Question #4:

What is the most important measurement of the success of your insurance affiliation?

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Solution – MEMBERS® Auto & Homeowners

Positioning and using new channels and member distribution methods in a manner where we market and distribute around the existing agency and provide more revenue and relationships opportunities to the overall insurance strategy of the credit union and/or CUSO without competing for the same members.

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Wrap/Overlay Strategy

  • Complements current offering

  • Adds no additional cost

  • Increases participation/members served

  • National presence

  • Increase your agent sales force by 1700+ local agents

  • Positive bottom line impact

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Hypothetical Case Study

  • 100,000 member credit union

  • Owns personal agency

  • Trying to increase agency profitability

  • Increase products per household

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Current State

  • Agency producing $5 million in annual personal lines premium

  • $700,000 in annual revenue (at 14% commission)

  • Approximately 2,500 households served

  • $77,000 bottom line profit (11%)

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  • 100,000 members

  • Incorporate CUSO “Wrap” – direct mail channel

  • $115,000 of bottom line revenue over 3 years

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Overall Results

  • Increase agency profitability from 11% to over 16%

  • Increase households served by over 650 in the first year

  • Create national presence (1,700 local Liberty Mutual Representatives)

  • Increase the number of products per member

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Revenue ComparisonIndependent Agency vs. CUNA Mutual Group/Liberty Mutual

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Success Story - CEFCU

Jim Sarver, Manager, CEFCU Financial Services

Jim has been at CEFCU in Peoria, IL for 30 years and a manager in the CUSO since 1986

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Challenges & SolutionsCEFCU



  • Enhancing agency approach with MEMBERS® Auto & Homeowners national program

  • Leveraging referrals from other member purchases (e.g. loan applications)

  • Ensuring strong customer service

  • Maximizing channel access

  • Carriers entering & exiting the market

  • Conversions

  • Ability to serve all geographic areas

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MEMBERS® Auto & Homeowners Insurance Program Contributes to CEFCU’s Success

Test: September 2006 mailings to small group of non-Illinois members


  • Combined with incidental sales in all states, results were 40% of peer credit unions using the full MAH program.

    • 86% of all sales from F2F channels

  • CEFCU has decided to expand program to include Illinois and potentially implement additional components of MAH

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    Who might benefit?

    • Credit unions that own an agency

      • CEFCU-like scenario

      • Agencies that want to focus on commercial accounts and minimize personal lines

  • Credit unions that partner with a local agency

  • Credit unions using agency for “back-room” administration and referrals

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    Next Steps?

    We can help you assess your current program and work with you to design a solution to support your current program and help you reach your personal lines insurance goals.

    Call your CUNA Mutual Sales Executive at 800-356-2644.