Tackling Uninsured Collateral Risk
June 16, 2022
The pandemic affected nearly every industry, with the auto industry in particular facing increased growth. A NAFCU member survey notes that the credit union industry saw sustained auto loan growth during the pandemic and auto loans account for 33% of a credit union’s portfolio. But this growth isn’t without its own set of challenges. As you continue to serve your members and community through and beyond the pandemic, it’s also vital to protect this sizable aspect of your loan portfolio while maintaining compliance and member satisfaction. Many credit unions are rethinking their risk management strategy in light of the pandemic’s impacts.
Risk Mitigation Complexities
Collateral Protection Insurance (CPI) or Lender-Placed Insurance (LPI) is an integral aspect to mitigating risk on vehicle portfolios, but many credit unions struggle with communicating insurance requirements to members, tracking insurance and communicating with carriers, and verifying insurance status and coverage. These challenges are made more complex by CPI generally being a program that creates member “noise”, or frustration.
A holistic CPI program should be member-centric and supportive of other business goals. This is done by tracking insurance on collateralized auto loans, and placing insurance when necessary.
3 best practices to help manage risk with Collateral Protection Insurance (CPI)
Read the full article here.
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About Allied Solutions
Allied Solutions, LLC is one of the largest providers of insurance, lending, and marketing products to financial institutions in the US. Allied Solutions uses technology-based products and services customized to meet the needs of over 4,000 banks and credit unions, along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains several offices strategically located across the country and is a subsidiary of Securian Financial Group, Inc.
Content in the blog posts are the opinion and views of the writer, and don't necessarily reflect the opinions or views of Allied Solutions.