CUs Switch Tracked CPI Programs to Improve Member Experience
Who pays the price when an uninsured vehicle is stolen or damaged and the credit union holding the lien must write off the loan? A credit union is owned by its members, so really, all of them pay the price of these write-offs. Even if the credit union owns a blanket collateral protection insurance policy, all members technically contribute to the policy premium.
The three Midwest credit unions featured below chose to rebalance this risk so more of it falls on individual borrowers, using a “tracked” CPI program.
First, a little background: In a tracked CPI system, the provider monitors the insurance status of collateral vehicles, notifies members if insurance isn’t secured or if it lapses, and if necessary, binds coverage on the vehicle. The premium is then added to the member’s loan payment.
Especially in a rough economy with high unemployment, when auto loan portfolios are most at risk, tracked CPI is a strong consideration for many credit unions.
If your credit union is considering this step, your first concern is likely the reaction of your members and the overall financial impact. CUNA Mutual Group sought feedback on these concerns from three credit unions that recently chose tracked programs administered by its CPI partner, State National Companies, a Bedford, Texas, company devoted solely to CPI.
Potentially difficult situations defused
Tracked CPI programs can create delicate situations when members are notified that their vehicles are uninsured, or that insurance has been placed on the vehicle for them. And members hold the credit union responsible—not the CPI vendor—so choose your CPI partner carefully, says Kathryn Harke, processing manager at Prospera CU (Appleton, Wis.; assets $146 million).
Using State National’s “InsurTrak” online tool, Prospera no longer needs its own file system to hunt through for answers.
Rescuing claims from slow, complex processing
Accurate, efficient insurance tracking and placement is only the front half of a CPI provider’s responsibility. The back half — claims handling — is also critical.
Credit Union ONE (Ferndale; assets $739 million) shifted to State National Companies’ tracked CPI program in part because the previous provider required pages and pages of faxed documentation to file a claim. Claims commonly took weeks or months to be paid, collector Melissa Baysdell said. “That caused loans to go further into delinquency and, understandably, led to some real member frustrations,” she said.
Baysdell said claim delays also left Credit Union ONE and members hanging when a repossessed vehicle had uninsured damage, and needed to be fixed and sold. The difference since switching CPI providers is “night and day,” Baysdell says.
Indirect portfolio requires quick, transparent claims
Fast claims service was also a priority at CommunityWide FCU (South Bend, Ind., assets $301 million). The credit union’s auto loan portfolio is primarily indirect loans in a region that has been hit hard in a tough economy. CommunityWide transitioned to State National’s tracked CPI program after the company partnered with CUNA Mutual Group.
Andrew Burggraf, vice president and COO, said State National’s transparent claims process helps the CPI program run smoothly with almost no staff intervention. In addition to real-time access to member coverage data and claims status, the staff can listen to recordings of member phone calls to State National and review every notice members are sent.
Contact your CUNA Mutual Group Sales Executive at (800) 356-2644 to determine if a tracked Collateral Protection Insurance program is right for you.
For more information, contact Al Olson, CMG commercial products staff underwriting specialist. Reach him at Allen.Olson@cunamutual.com.
CUNA Mutual Group Launches TruStage Insurance Products and Programs
Credit unions have long helped families protect their financial future. This mission inspired the companies of CUNA Mutual Group to create TruStage™ insurance products and programs — a new brand designed especially for credit union members. With its yellow and gray logo, the TruStage brand brings a relevant, consistent approach across a variety of products and marketing channels, enhancing the member experience.
TruStage insurance products are made available through CUNA Mutual Group’s MemberCONNECT® Program, a co-branded marketing solution helping credit unions make insurance coverage available to members. Currently, more than 13 million members are protected by the Accidental Death and Dismemberment, Life and Auto & Home insurance products and programs that will now bear the TruStage name.
Extensive testing and research with credit unions and members went into developing the brand. Consumer insights revealed that people find insurance confusing and seek an insurance partner that is genuine, straightforward and provides real value. When tested with consumers, the TruStage brand resonated with credit union members and compared favorably to major insurance brands.
A commitment to support credit unions in serving their members underlies the company’s decision to bring the TruStage brand to the market. As trusted advisors, credit unions are in a unique position to make a difference in members’ lives during challenging times by making the right insurance protection available. The MemberCONNECT Program and TruStage brand represent a valuable opportunity for credit unions to provide an exceptional member experience, deepen member relationships and add noninterest income to their bottom line.
For more information, credit unions can contact a sales executive at (800) 356-2644 or visit www.cunamutual.com/protectmore.