CUNA and NAFCU are now America’s Credit Unions,
a unified voice for the credit union industry.
Loan protection products are typically sold at origination leaving untapped potential for sales during the life of the loan
PORTLAND, ME, June 22, 2024 – Constant, a leading provider of loan operations technology, today announced the launch of its solution designed to boost non-interest fee income through the sale of loan protection products. Its new product, Income Builder, enables financial institutions (FIs) to offer extended warranty, GAP, debt protection, auto insurance and other products not just at the origination of loans, but throughout the loan lifecycle and in digital banking. Constant makes it easy for borrowers to adopt these new products by automatically adding the cost of the premium to their loan, eliminating one-time, upfront charges.
Redefining Insurance Sales
The sale of loan protection products typically occurs at loan origination often resulting in missed opportunities for both FIs and their borrowers. Income Builder's innovative solution offers these products continuously, providing multiple opportunities to make timely and personalized offers. This approach ensures that borrowers receive relevant product suggestions based on their loan status and actions they take, enhancing the likelihood of acceptance and increasing overall accountholder satisfaction.
Personalized, Real-Time Offers in Digital Banking
Income Builder differentiates itself by delivering loan protection and insurance offers directly within digital banking interfaces, a capability that is currently unmatched in the market. Constant offers Income Builder via its current integrations with the top online banking platforms. To help accountholders avoid one-time, upfront charges, Constant includes the premium cost in the borrower’s current loan through its automated loan modification feature. This makes it convenient for accountholders to purchase the insurance product and increases adoption. Currently, borrowers can: 1) receive offers based on their loan status and the steps they take to manage their loan, 2) access product education, and 3) schedule calls or request contact for detailed offers via user-friendly buttons on their loan account pages.
Income Builder Phase 2 will include integrations with insurance providers to extend the accountholder experience.
Maximizing Fee Income for Credit Unions
This innovative approach helps credit unions maximize fee income by creating continuous sales opportunities for loan protection and other insurance products. Constant’s automated workflows, such as skip-a-pay, due date change, CPI reversal, loan payoff, total loss reporting and more, are designed to trigger relevant product offers. Additionally, credit unions can utilize Constant’s access to more than 120 core system fields to create targeted digital banners and campaigns like promoting debt protection to borrowers who meet any mix of requirements such as 1) skipped a payment in the last 90 days; 2) selected increased auto expenses as the reason; 3) and are current on their payments.
Supporting Data and Market Insights
Industry data shows that loan protection products sold at origination penetrate less than 30% of all eligible loans leaving significant potential for post-origination sales untapped. This number can be significantly lower for FIs with large indirect auto portfolios. Income Builder’s platform addresses this gap by offering products throughout the loan term, ensuring that borrowers receive offers when they are most relevant and needed. This approach not only increases product adoption rates but also enhances the overall accountholder experience by providing valuable financial protection solutions at critical times.
Join the Future of Loan Protection Sales
“Our clients and prospects were increasingly concerned with their exposure to overdraft and NSF fees. By offering insurance products continuously after origination, we aim to help Fis diversify their fee income,” stated Catherine York Powers, Constant’s CEO. “Income Builder also generates automated origination opportunities through loan payoffs, total loss claims and more. The ancillary benefits of Income Builder include lower operating costs and increased member self-service to further expand margins.”
FIs looking to enhance their insurance product sales, create new origination leads and improve borrower engagement can learn more about Income Builder’s innovative platform by visiting our website.
Constant's executives, experienced in managing billions in retail debt, grew frustrated with legacy core system constraints and manual operations. They boldly transitioned loan servicing from manual to digital self-service, reshaping the operations landscape. Constant’s mission is to empower members to self-serve online and help credit unions grow through meaningful interactions with their members.