FRANKLIN, Tenn.–Financial wellness is going to be a big concept driving growth this year for credit unions that offer it to their members, according to one person.
“There were lots of discussions about financial wellness of credit union members” at the most recent CUNA Governmental Affairs Conference, said Tom Kazar, group vice president at Affinion Insurance Solutions.
And his firm is poised for steady growth in this area after a product it offers was approved for rollout last year in the big California and Florida markets with their 15 million members.
The product actually targets credit union member physical wellness as well as financial wellness. More than 200 credit unions already have signed on for Affinion’s Recuperative Care Plan Insurance, which has been rolling out state by state since inception in 2014, he said.
The Franklin, Tenn.-based firm’s product provides supplemental insurance to fill in the financial gaps credit union members might be exposed to through illness or accident post-hospital stay.
“We’re the only provider in this space that has this product,” he said, pointing to Florida, with its large population of seniors using lots of health care, as a particularly good market for recuperative care insurance.
Loyalty & Stickiness
“For the last two years or so I’ve seen more focus on it,” Kazar said. “It gets down to loyalty and it creates stickiness and a way to retain profitable members. We’ve seen big growth. It’s taken off. We’ve seen a lot of requests for information, for proposals. Very, very active.”
He also thinks it is an example of how insurers aren’t as stodgy as they are often portrayed. “Some question whether insurance is a space for innovation,” he said. “This is one of the most innovative products we’ve been rolling out.”
Kazar pointed to Virginia-based Pentagon Federal Credit Union as a key focus partner offering the product. Why PenFed? It is the second largest credit union in the country, for one thing, and it offers opportunities of scale.
It’s a mutually valuable relationship, he said, as PenFed members like the features of the product, such as no disqualifications through pre-existing conditions, and Affinion benefits as well.
“We get a lot of good learning from their marketing perspectives and creative strategies,” he said.
Another Growth Prospect
The insurer, which has been in business for more than 40 years, sees another growth prospect for 2017, and that is for its brand-new LUX360° product. This data analysis tool is so new it was just rolled out at GAC in Washington. So Kazar doesn’t have a long list of credit union clients for it just yet--but he expects to.
“Credit unions may have struggled with analytics in last couple of years,” he said. The product “gets a lot of interest to say the least.”
LUX360° is a partnership with Acxiom. It takes data files, run them through Acxiom models and then packages the data back to credit unions, providing what the company says is valuable insight into their members’ demographics, financial situations and personal behavior to help them make more profitable marketing decisions.
The product can help credit unions target new member acquisition through heat maps that show them where their members live and likely new customers nearby.
It is also quite useful in helping credit unions compete with banks and other financial institutions, according to Kazar. Many credit unions just aren’t able to build up their own data warehouses, which can ring up costs in the millions of dollars.
“They don’t have budgets for big data analytics and they are going up against the big boys,” Kazar noted.
Affinion, also markets to other financial institutions like banks and a few mortgage firms, but it is clear the insurer’s real affinity is to credit unions. “We kind of fit in in the credit union space,” he said.
—Mark Fogarty