Creating an Insurance Aisle in the Store NACUSO Spring 2009 Las Vegas, NV
The Nation s Leader
Presenter Jeffrey Chesky President & CEO - Insuritas Founder, BIS/Insuritas Experience Fleet, CU of New England MassMutual Palmer Goodell Contact Information jchesky@insuritas.com (860) 653-1134
Agenda Creating an Insurance Aisle in your store. Discuss strengths & weaknesses of current efforts. How technology is creating exciting innovations. Next generation strategies
Some Definitions CU Facing Market Facing Enterprise Solution Incremental Solution Aisle in the Store CU Driven Integration Referrals Work Flow Triggers CIF MCIF Tracking Records Demand Loads Yield
Why an Insurance Agency? 80-90% HIGH SPECIALITY DIFFERENTIATED 100% Members Use Expands Wallet Share Expands Market Share Annuitizing Fee Income Drives Earnings Promotes Retention Protects from Incursion Perceived Added Value LOW THRESHOLD Large Commercial Sub Standard Personal COMMODITY Standard Personal Small Commercial LOW Competitive Intensity HIGH
Insured Changing Shopping Approach 90% of Consumers Research Online Before Buying 27% 9% 1% 25% Out of Financial Services Products, Auto Insurance is Ranked #2 Researched Online Percentage of applicants who researched online: US Applicants Gen Y (18-27) Gen X (28-41) Young Boomers (42-51) Old Boomers (52-62) Seniors (63+) Credit Cards 59% 66% 68% 51% 48% 33% Auto Insurance 51% 58% 58% 49% 44% 27% Mortgages (refinance) 48% 63% 57% 45% 38% 31% Mortgages (purchase) 47% 52% 54% 40% 31% 25% 38% Home Equity 45% 52% 57% 40% 30% 26% Savings Accounts 44% 42% 58% 37% 35% 24% Checking Accounts 38% 37% 50% 32% 26% 23% Life Insurance 34% 32% 36% 33% 35% 27% Always Often Sometimes Rarely Never Source: icrossing Online Retail Report, 2007 Source: Forrester Research, North American Technographics Benchmark Survey, 2007
Traditional Methods Decreasing Auto Shopping Methods Increasing Auto Shopping Methods Decreasing Over 50% decrease Source: McKinsey Insurance Practice, gaining Insights into member Shopping and Switching Behavior
Multiple Resources when Obtaining Quotes Exclusively Used with Another Insurers Web Site 5% 31% 36% Online Quoting Service Called Insurer 8% 9% 34% 37% 42% 46% 25% higher close rate Agent 11% 40% 51% Additional study indicates 50% of consumers request online quotes Source: J.D. Power & Associates Insurance Shopping Study 2007; Comscore 2007
The Solution for CU Owned Agencies Create a Member facing Aisle Commodity oriented Fully integrated into CU Leverage 100% utilization rate CU has to own the aisle
Opening the Aisle The Ugly History 16% 78% 74% 64% 34% Conversion Rates 85% 46% 38% 22%
The Science of the Instant of Interest There are TWO times your members want to talk about insurance 1. Loan/Purchase Requires Insurance 2. Renewal Notice in Mail Instant of Interest Response Rate Time
Ban Referrals & Referral Fees Referral Programs Interview Rates 18% Work Flow Trigger Interview Rates 63% X-Date Mail Interview Rates 93%
Require Work Flow Triggers Requirements Tied to mandatory event Instant of Interest triggers workflow execution Key contact information standardized & normalized Trigger source standardized, normalized, tied back to activity goals by division Electronic Referral Requirements Electronic & instantly transferable Digital fingerprints to track workflow/procedures/service levels Data exchange bridge to agency management system NO REWARD OR RECOGNITION
Work Flow Triggers @ Work Activity Trigger Activity 1. Loan Application Completed You need insurance - our agent will call Trigger Form is completed & sent 2. Commitment Letter is Generated & Mailed Insurance listed as a Contingency Trigger Form is completed & sent 3. Approved Loan Sent to Settlement Desk Insurance is Open Item Trigger Form is completed & sent
Sample Trigger Form
The Balance of the Member Base Does your institution have a way to systematically collect & leverage x-date marketing? Dec pages from loan closings X-dates from member inquiries Insurance data during new member intake Insurance information from loan files
Gathering Expiration Dates Pushing & Pulling Gas Cards Vacations LCD TVs $168.00
Expiration Dates What do you want to Reward 88000 X-Date Penetration 78000 68000 58000 48000 Goal Actual 38000 28000
Referral to Sold Ultimate Measure Personal Lines: Trigger to Sold Ratio 2008 35.0% 30.0% 25.0% Agency Ratio 19.7% 2008 23.2% 20.0% 15.0% 2007 15.6% 10.0% 5.0% 2006 7.8% 0.0% H T R G L Q O J M K I B D A F P C N E S
An Aisle Requires a Plan Does your institution have plans where it requires the associates to introduce a member to the agency and get critical insurance information. Built into workflows Automated or manual Part of job & features formal training
Statement of Work (SOW) Outlines scope of work Project approach, including phases of work typically 18 months Identifies roles & responsibilities CU Agency Technology Marketing Establishes service deliverables, resource requirements Creates timelines & escalation options
Call to Action Trusted Advisor
Winning
THE Value that WORKS Insuritas Average Consumer Savings in the Month of April $518 Economy provides lift Average savings <10% $18
Bundled Offers & Switching 80% 70% 73% 60% 50% 40% 35% 36% 42% 44% 30% 20% 10% 38% 31% 15% 0% Price Circumstance Change 5% 8% 6% 6% Advertising Bundling Offer / Referral Service Experience % of Shoppers % of Switchers Source: JD Power Insurance Shopping Study 2007
2009 Lead Targets Referrals - Annualized 2009 Activity Conv % Yield New Purchase Money Mortgages 400 90% 360 New Refinance Mortgages 300 22% 66 New HELOC's & Seconds 1,200 22% 264 New Household 8,000 22% 1,760 New Direct Auto 4,800 22% 1,056 CUDL Auto 4,344 1% 43 New Commercial C&I 140 75% 105 New Commercial Real Estate 20 90% 18 Existing Residential Mortgages 5,380 0% Existing HELOC 7,424 0% Households with X-Dates - Direct Mail 43,000 4% 1,720 Households without X-Dates 61,000 2% 1,220 Direct Auto Loans 29,827 0% Owner Occupied Comm R/E 0 2% 0 Commercial Loans C & I 69 12% 8 Commercial Depositors w.out Loans 3,622 4% 145 Total Referral Yield 6766 Annual Monthly Personal Lines Yield Goal 6,489 541 Commercial Lines Yield Goal 276 23
Performance Benchmarking Engineered Process Hudson Valley Performance Benchmarking Report - April YTD December January February March April 12 Month 2008 2009 YTD 2008 2009 2009 2009 2009 Rolling Ttl Total Total PERSONAL LINES RQU GOAL 452 702 702 702 702 6,424 5,424 2,808 RQUs 1,019 982 1,429 1,197 870 11,716 11,251 4,478 RQU TO GOAL 225.44% 139.89% 203.56% 170.51% 123.93% 182.38% 207.43% 159.47% RQU - FOLO GOAL 50% 50% 50% 50% 50% 50% 50% 50% FOLOs 354 309 287 356 316 3,700 3,690 1,268 RQU - FOLO ACT 34.74% 31.47% 20.08% 29.74% 36.32% 31.58% 32.80% 28.32% FOLO TO QUOTE GOAL 80% 80% 80% 80% 80% 80% 80% 80% QUOTs 294 337 264 329 286 3,321 3,236 1,216 FOLO TO QUOTE ACT 83.05% 109.06% 91.99% 92.42% 90.51% 89.76% 87.70% 95.90% QUOTE TO SOLD GOAL 33% 33% 33% 33% 33% 33% 33% 33% SOLDs 104 107 100 110 95 1,234 1,273 412 QUOTE - SOLD ACT 35.37% 31.75% 37.88% 33.43% 33.22% 37.16% 39.34% 33.88% RQU - SOLD ACT 10.21% 10.90% 7.00% 9.19% 10.92% 10.53% 11.31% 9.20% COMMERCIAL LINES CRQU GOAL 10 30 30 30 30 120 120 120 RQUs 26 28 59 45 34 382 375 166 RQU TO GOAL 260.00% 93.33% 196.67% 150.00% 113.33% 191.00% 312.50% 138.33% RQU - FOLO GOAL 60% 60% 60% 60% 60% 60% 60% 60% FOLOs 8 9 12 14 14 104 101 49 RQU - FOLO ACT 30.77% 32.14% 20.34% 31.11% 41.18% 27.23% 26.93% 29.52% FOLO TO QUOTE GOAL 90% 90% 90% 90% 90% 90% 90% 90% QUOTs 6 7 9 8 13 89 101 37 FOLO TO QUOTE ACT 75.00% 77.78% 75.00% 57.14% 92.86% 85.58% 100.00% 75.51% Sold QUOTE TO SOLD GOAL 65% 65% 65% 65% 65% 65% 65% 65% SOLDs 3 3 1 6 2 44 59 12 QUOTE - SOLD ACT 50.00% 42.86% 11.11% 75.00% 15.38% 49.44% 58.42% 32.43% RQU - SOLD ACT 11.54% 10.71% 1.69% 13.33% 5.88% 11.52% 15.73% 7.23%
31-Dec Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total Insureds Member Share 09 3000 Household Share Analysis 2500 2000 1500 1000 Goal Hard Hardest Actual
31-Dec Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total Insureds Commercial Share 09 180 160 140 120 100 80 60 40 20 0 Commercial Share Analysis Goal Hard Hardest Actual
An Aisle in the Store www.cofcu.org/home/home
What We re Working On CU/insurance aisles become full service Insurance web content agency controlled Full Integration into CU core Consumer portals going live now Straight Through Binding in late 09 Email partial interview to personalized link Automatic remarket using previous year info
Member Experience is More Important Than Ever Impact of a Negative Experience: 2006 2007 Would never go back to an organization 68% 80% Will register a complaint or tell others of a bad experience 67% 74% Posted a negative online review or blog entry 13% Fantasized about emailing friends, family or colleagues asking them to boycott the company 34% Dreamed of picketing and/or defacing a company s headquarters 12% Source: 2007 RightNow Technologies member Experience Report, per Harris Interactive Online Poll
Closing Thoughts Two CEO questions: % of CU members Using Agency % of CU members with Expiration Dates Permanent aisle in the store Leverage infrastructure capabilities Work flow every instant of interest Plan for demand loads Information management critical 80% in 2
Questions & Answers Contact Information jchesky@insuritas.com (860) 653-1134