Whether debt protection or credit insurance, choosing the right program for your credit union can be challenging. A recent Securian Financial Group and NAFCU Services Corporation survey was conducted to identify the reasons why credit unions made the switch to debt protection or added it to their product portfolio. The key findings may serve as a blueprint for credit unions to consider as they compare debt protection and credit insurance options. More information at http://www.nafcu.org/securian

1. Debt Protection and Credit Insurance
Benchmarking
Survey Results
NAFCU Services Corporation and Securian
Financial Institution Group partnered to conduct
research on NAFCU-member experiences with Debt protection program satisfaction
debt protection and credit insurance products in
order to develop a blueprint for credit unions to Satisfaction
Provider administration services 96%
consider as they compare their options.
Program design 91%
Program pricing 82%
The study was conducted in May and September 2010
Provider claims administration 82%
with 121 NAFCU member credit union CEO or chief
Overall debt protection program 81%
lending officers participating.
Influences for move to debt protection
The focus of the study included the following factors:
Credit unions with debt protection programs were
– Overall satisfaction with debt protection and credit
asked what influenced their decision to move to
insurance programs
debt protection. “Protecting credit union assets,” and
– Reasons why credit unions made the switch to “meeting members’ needs” were the top reasons.
debt protection
The top five influencers are:
– Important factors contributing to the success of
debt protection programs % strong
influence
– Lessons learned regarding debt protection and “Protects credit union assets” 96%
credit insurance program success “Meets members’ needs” 88%
“Provides members a variety of benefit options” 86%
Key findings “Is affordable to members” 79%
• Credit insurance continues to be more prevalent, “Generates credit union income” 74%
with 79 percent of responding credit unions
offering only credit insurance, 10 percent offering Successful program considerations
only debt protection, and 11 percent offering both. With respect to their debt protection program,
• For those with debt protection programs, 81 percent respondents indicated their overall program success
were satisfied with their program, especially the high at 91 percent. Measuring program success can be
provider administration services. done in many ways; two of which are to monitor the
volume of protected loans versus unprotected loans,
• Overall satisfaction for credit unions that offer credit
and look at the increase in fee income.
insurance was not as high, with only 45 percent
indicating that they were satisfied with their program. • Sixty-four percent of respondents with a debt
protection program indicate their protected loan
• Of those credit unions that do not have a current
volume has increased, with nearly one-half reporting
debt protection program, 83 percent will consider
percentage increases of 25 percent or more.
doing so in the future.
• Fifty-five percent of respondents indicated that the
• The importance of training programs was identified
fee income to their credit union increased, with 33
as the most important factor in contributing to the
percent reporting increases of 50 percent or more.
success of a credit union’s debt protection program.
more »

2. The most common loan types that debt protection Credit insurance program satisfaction
programs offered are:
For credit unions that offer a credit insurance program,
• Consumer loans (including auto loans): 92 percent overall satisfaction with the program was low.
• Home equity loans: 71 percent
• Credit cards: 54 percent Very Not at all
satisfied satisfied
The most common protected events with debt 7 6 5 4 3 2 1
protection programs include:
• Death and disability: 96 percent each
14% 30% 28% 17% 7% 3% 1%
• Involuntary unemployment: 67 percent
Death and disability are the protected events most
commonly offered across all loan types. For credit unions that were not satisfied with their
credit insurance program, the most common reasons
Reasons credit unions have not pursued were that members are not interested or the insurance
debt protection is too expensive for them.
Credit insurance continues to be more prevalent than What credit unions do like about their credit insurance
debt protection. The primary reasons credit unions programs include:
have not pursued a debt protection program include:
• Easy to sell and administer
• Need more information or don’t know enough
• Provides a benefit to members when they need it
about the product
• Affordable product for members
• Too expensive
• Helps protect the credit union and provides a
• Don’t have a need for the product
source of fee income
• Not a priority at this time
• Product complexity
For those that had considered and did not pursue, Key takeaways
the top reasons for reconsidering a move to debt
Regardless of whether a credit union offers debt
protection in the future are:
protection or credit insurance, the following were
• Protects credit union assets identified as being important considerations:
• Provides members a variety of benefit options • Effective training programs, including periodic
• Generates credit union income training updates
• Meets members’ needs • Product design that meets member needs
• Provides credit union flexibility in program design, • Pricing that is affordable for members
pricing and marketing • Employee motivation and incentives
Since 1880, Securian Financial Group, Inc. and its affi liates have provided fi nancial security for individuals and businesses in the form of
insurance, investments and retirement plans. Now one of the nation’s largest fi nancial services providers, it is the holding company parent
of a group of companies that offer a broad range of financial services.
Securian Financial Group, Inc.
www.securian.com
400 Robert Street North, St. Paul, MN 55101-2098
©2010 Securian Financial Group, Inc. All rights reserved.
F65118-153 Rev 11-2010