The nation’s third largest credit union began offering new insurance products to its members, a growing industry-wide trend that can help boost non-interest revenue.
CUNA Mutual Group said Wednesday that the $21.3 billion Pentagon Federal Credit Union in Tysons, Va., is making its TruStage accidental death & dismemberment and life insurance available to the credit union’s 1.4 million members.
While cooperatives know insurance sales can increase noninterest income, a LIMRA 2016 Bank and Credit Union Life Insurance study found 78% of financial institutions said growing life insurance products and services is an important priority.
Although sales of any kind of insurance were just 5.1% of noninterest income at credit unions, a survey of 170 credit unions by Callahan & Associates, found that roughly one in five (18.2%) said offering insurance products to members was on their radar.
In 2015, TruStage paid more than $80 million in non-interest income to credit unions. In addition, credit unions with more than a $1 billion in assets saw a median non-interest income growth rate of 11.4%, according to CUNA Mutual Group.
“TruStage is clearly committed to delivering a compelling experience for our members’ life and AD&D protection needs,” said Shashi Vohra, PenFed executive vice president and president of affiliated businesses, said.
“Their investment in innovation and digital capabilities was a major factor in our decision to make TruStage available to our members.”
