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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

Unleashing the Powerof Personal Lines Insurance

Keith Kremers

February, 2008

Wendy McCurdy, Moderator

  • Today’s Personal Lines Insurance Marketplace
  • Challenges for Credit Unions and CUSOs
  • Potential Solutions

Poll #1

polling question 1
Polling Question #1:

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




Global Players


Trusted Insurance

Local Institutions

Financial Services Industry – TODAY!

who controls the us personal auto insurance market
Who Controls the US Personal Auto Insurance Market?

Poll #2

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

polling question 2
Polling Question #2:

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

what s competition doing in mailbox
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

challenges of credit unions and cusos
Challenges of Credit Unions and CUSOs
  • Revenue
  • Economic resources
  • Product distribution/member access
  • Attaining scale
  • 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

economic resources
Economic Resources
  • Inadequate to secure growth
  • Inadequate to staff for administrative functions
product distribution member access
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

polling question 3
Polling Question #3:

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

  • Hours of operation vs. member demand
  • Licensing
  • Call center support
  • Marketing

Poll #4

polling question 4
Polling Question #4:

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

solution members auto homeowners
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.

wrap overlay strategy
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
hypothetical case study
Hypothetical Case Study
  • 100,000 member credit union
  • Owns personal agency
  • Trying to increase agency profitability
  • Increase products per household
current state
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%)
  • 100,000 members
  • Incorporate CUSO “Wrap” – direct mail channel
  • $115,000 of bottom line revenue over 3 years
overall results
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
success story cefcu
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

challenges solutions cefcu
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
members auto homeowners insurance program contributes to cefcu s success
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
who might benefit
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
next steps
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.