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Amazing Things Happen When Female Executives Get Together

State National's Retreat Where Female Finance Executives Go to Network and Learn A 2021 report from CUNA indicated that 51% of CEOs at credit unions and 33% of credit union board members are female. Many organizations speak at length about the value of empowering and providing opportunities to women — yet this recognition must be met with action. For example, Kim Sponem, CEO of Summit Credit Union, took action by starting The Red Shoes initiative. Filene Research Institute actively creates research reports about women in credit union leadership. These are just two of many examples across the credit union industry. Missions like these are an important part of transforming the narrative of women and finance. State National Companies also recognizes the unique leadership traits and skillsets that female leaders bring to the financial services industry. To celebrate those traits and provide women leaders from across the country the opportunity to build relationships with their peers, we created our own initiative — an annual event called the Female Executive Networking (FEN) Retreat.   Why a Retreat Specifically for Female Executives? The goal of this annual retreat is multifold: Provide valuable, meaningful, and actionable education, information, and resources to senior credit unions and financial institutions executives that they can use to move their organizations forward. Create a forum for financial institution leaders from across the country to share best practices regarding leadership, retention, business growth, and operational excellence. Provide a rich and rewarding experience that organically allows connections and relationships to grow. Empower and inspire attendees to return to their financial institutions re-energized, with new ideas for accelerating the growth of their organizations. With these goals in mind, we launched our first FEN retreat in early 2020. And, oh, how critical it was for the female leaders who participated in this first event to achieve these goals — because at the time we didn’t realize were heading home to nearly two years of quarantine and isolation! A Most Welcome Return In 2021, after waiting 18 months from our launch date, we were more than eager to resume some sense of normalcy and held our second FEN Retreat. That year’s event featured Terri Trespicio, speaker, coach, and best-selling author of Unfollow Your Passion, as our keynote speaker and workshop leader. This year, our 2022 keynote workshop, titled How Macroeconomic Conditions Will Affect Your Financial Institution, Your Customers, and Your Household, was led by Marlena Lee, Ph.D., Global Head of Investment Solutions at Dimensional Fund Advisors, and Mary Ellen Krueger, Director, Wealth Management and Partner at Aspiriant. Not only are these FEN retreats educational, inspirational, and just plain fun, we at State National are also proud of being a part of the movement to empower even more women to lead in moving the credit union mission forward. After all, studies show that more female executives in a C-suite role can improve both customer orientation and financial performance. That’s a win-win-win — for credit unions, for their members, and for women in financial leadership. If you are interested in learning more about State National’s Female Executive Networking retreat, please contact your State National Client Executive or Regional Vice President.   Comments from FEN attendees:

With Custom QR Codes, It’s Now Even Easier for Your Borrowers to Upload Their Insurance!

State National brings back QR codes — now new and improved!   When was the last time you scanned a Quick Response (QR) code? Was it on a restaurant menu, on a real-estate sign, or maybe to access a form? The reliable QR code has now become a part of our daily life. In our mobile-first technology era, QR codes are back, giving consumers instant access anywhere to the targeted information you want to provide them. There is no need to keep pamphlets in stock or worry about your customers going to the wrong website when scrolling past noisy ads on search engines. While State National has offered our clients the ability to have QR codes on their borrower notices before, there was not a real demand for them until the recent increase in use sparked by the pandemic. With increased consumer receptiveness to these abstract squares and State National’s dedication to constant improvement, we are harnessing the power of QR codes again — adding on improved customizations that make it even easier for borrowers to submit their insurance when they take out a new loan or have a lapse in coverage. "We appreciate having a good vendor partner that understands your needs sometimes before you even know you have a need. State National is always looking for ways to make things better for your staff as well as your leadership.” – JAX Federal Credit Union QR Codes for Borrower Notices Borrowers can scan their personalized QR code on their mailed paper notice and be directed straight to their personal account on MyLoanInsurance.com. On this borrower-friendly site they can view their insurance status and easily provide updated proof of insurance. Since the QR code on each borrower’s notice is specific to them, no reference ID or PIN is needed, and the webpage will automatically populate with their name and vehicle type. A helpful short video applicable to their particular situation will instruct them on exactly what they need to provide to resolve their specific impairment. And finally, the site will also show them how to easily upload and submit their information. Our borrower-specific QR codes personalize the website borrowers are directed to, including details such as informing them if the lien holder is missing or if their deductible is too high.   QR Codes for Lenders Lender custom QR codes are another way we provide total access and empower your borrowers to easily update their insurance with us before they even enter our notice cycle. These institution-specific lender QR codes can be used anywhere you choose, including your website, lender agreement, and loan closing documents. Borrowers who scan your custom lender code are directed to a MyLoanInsurance.com page branded with your financial institution’s name and logo. From here, borrowers can upload insurance even if they do not know their access PIN.   Pro Tip: Add Your Lender QR Code to Your Lender Agreement to Prompt New Borrowers to Submit Their Insurance We encourage you to add your custom QR code in your new loan packet and actively point it out to borrowers when they take out a vehicle or home loan. Let your borrowers know they can scan that QR code to quickly and easily provide their insurance details. The visual effect of having the QR code on the agreement packet reminds the borrower to take action, and as soon as the website pops up, it tells them exactly what they need to do to update their insurance. MyLoanInsurance.com is accessible 24/7, so borrowers with missing information or a lapse in coverage can update their insurance at any time, at their convenience.   Scan Here for an Example of a Lender QR Code Leading by Always Improving Since 1973, State National has been dedicated to a culture of continuous improvement. We are proud to be the technology leader in our industry, and are consistently evolving to make portfolio protection easier, faster, and more user-friendly for your borrowers and your staff. We are glad to provide our lenders with these customized QR codes as the latest feature to make the process even more seamless and convenient. Borrower QR codes are already actively employed on all mailed notifications. To find out more about getting your own customized lender QR code, contact your Client Executive today!

Tackling Inflation and the Auto Industry Part 2: Maintaining Your Competitive Edge

Inflation is squeezing businesses and consumers alike. Perhaps the easiest industry in which to spot the consequences of financial stress is the automotive industry. How can you maintain a competitive advantage while also protecting your portfolio in this market? Read on to find out.   Spotlight Soundbite: Maintaining Your Competitive Edge During Auto Industry Inflation   Consumers Are Facing Post-Pandemic Financial Stress The government’s stimulus checks have long run out, as have the grace periods many financial institutions implemented at the beginning of the pandemic. Many individuals have returned to work and are again bearing the costs of gas, transportation, childcare, and other employment-related expenses. With many Americans increasingly financially strapped, what does this mean for lenders? Unfortunately, prices are soaring and may continue to rise. We know that those directly impacted by inflation (which is all lower- to middle-class Americans) alter their consumption, investment choices, and spending habits as their purchasing power decreases. Something has to give as many consumers struggle to make ends meet. Unfortunately, many may choose to scale back on or even cancel their auto insurance as a result. In addition, consumer debt-to-income ratio is expected to increase. As borrowers take out large auto loans, particularly on used cars, they will be stuck with these loans even if the value of the item purchased decreases long-term — potentially putting borrowers upside down on their loans, with a vehicle worth considerably less than what they still owe in the future.   Revenue Lost in Charge-offs What does this mean for financial institutions? Unfortunately, this financial stress being felt by consumers also increases risk in a lender’s loan portfolio. As financial institutions are providing loans for vehicles with a hyper-inflated value, it’s likely they will see an increase in bad debt as those loans start to default to historic norms and possibly higher. Without proper risk mitigation measures in place, if the collateral sustains damage or loss when a borrower is uninsured or underinsured, the financial institution making the loan can also find itself “upside down,” so to speak, with the claims amount received insufficient to cover its exposure. Not all is lost, however — financial institutions with a high-quality portfolio protection insurance program will experience relief from a significant amount of this bad debt. Not only will this critical protection keep your borrowers covered, it will also safeguard your balance sheet.   Insurance Tracking Also Helps Lenders Manage Risk In addition to the protection provided by the insurance coverage, lenders can also use the detailed borrower insurance tracking in the program to assess and mitigate risk. High-quality, real-time tracking allows lenders to leverage knowledge of a borrower’s lack of coverage as an indicator of when a loan may be at a higher risk of default. This early warning sign provides an opportunity to initiate preventive steps to work with those borrowers to avoid collections, as well as take proactive measures to step up early collections efforts.   How a Program with State National Tackle Inflationary Hardships We can help as you are undergoing a double squeeze from tighter net interest margins. In addition to decreasing your charge-offs, here are a few of the relevant ways our program supports you no matter the storm. Our partners have full transparency and access to immediate real-time data with InsurTrak, the industry’s only system built from scratch specifically for CPI. It’s your single sign-on source of truth for insurance tracking, claims, and reporting, resulting in maximum ease, speed, and transparency. With your loan portfolio data at your fingertips, accessible instantly all in one place, it's easy and quick to identify trends and potentially at-risk borrowers. Our internal infrastructure is supported by our parent company Markel, a $33 billion Fortune 500 company, which has been proudly rated “A” (Excellent) by AM Best for many decades and is regarded as an industry leader. Our combined tenure, strength, and expertise translate to unmatched peace of mind and security for our partners. Our Claims Advisory Recovery Services (CARS) boosts your bottom line by mitigating your auto portfolio losses, reducing your internal expenses, and giving you more time to spend servicing your borrowers. With CARS, we manage repossessed collateral and remarketing profitability at auctions for you while also maximizing settlements from outside insurance claims and recovering suspected skips. All of this combined with State National’s culture of continuous improvement for the past half century, unwavering commitment to investment in technology, and unsurpassed service delivery ensures we can best serve our partners in both good times and challenging times, and we can help your business weather any economic storm.   Practical Solutions for Mitigating Portfolio Risks State National's Client Advisory Council (CAC) recently discussed some practical steps their credit unions are taking for creating alternative revenue methods. Even in the face of rising inflation and decreased lending demand, there are still many ways credit unions can grow while serving their members well.     For more information on how our solutions can help your credit union, contact us! To read the first article in this SNC Spotlight series, Tackling Inflation and the Auto Industry, visit: Protecting Your Credit Union from Car Market Volatility    

Tackling Inflation and the Auto Industry Part 1: Protecting Your Credit Union from Car Market Volatility

In today’s auto lending environment, a comprehensive and high-quality portfolio protection program is more important than ever — including partnering with a provider that will pay the full loan balance instead of actual cash value (ACV).   Protecting Your Credit Union from Car Market Volatility   According to Scott Colbert, EVP, Chief Economist for Commerce Trust Co., in Q2 of 2022 there were 17,000 auto dealers in the U.S. — but there are only about 34,000 new vehicles on those dealers’ lots. That’s roughly only 2 to 2.5 new vehicles per dealer available today. Employees have returned to work amidst a shortage of the auto parts necessary for the vehicles they drive to get there. New car inventory sits on hold due to a shortage of microchips and other supply chain issues. Some dealerships report their back order for new vehicles ranges from a couple of months to 5 years! This has caused used car demand to skyrocket, along with sticker prices. According to J.D. Power, the average sales price of a new vehicle during the first six months of 2022 hit a record of $44,907 — 17.5% higher than just a year ago. Edmunds.com reported that 12.7% of borrowers who financed a new vehicle in June 2022 had monthly payments of $1,000 or more. And used cars are definitely not exempt from rising prices — the average monthly payment on a used car was $503 in the first quarter of 2022 — up from $413 for the same period in 2021, reports Experian.   Relief Is Not Yet In Sight Analysts don’t expect auto prices to begin leveling off until late in 2023 or even into 2024. Unfortunately, people who need a car now don’t have the luxury of waiting for prices to decrease — they will pay whatever they can stretch to afford. To meet this demand lenders are offering larger and larger loans for both new and used vehicles. This desperation in the car market has forced many borrowers into disproportionately high-cost auto loans — with recent higher interest rates adding to borrowers’ monthly payment burdens.   Borrowers Aren’t the Only Ones at Risk Future market volatility has the ability to impact a vehicle’s perceived value between now and when a member pays off their loan. Today’s larger loan balances and longer loan terms leave them at risk of being upside down, with a vehicle worth considerably less than what they still owe. As a result, this also increases risk for credit unions in their loan portfolios as they are providing loans to their members for vehicles with a hyperinflated value. If the collateral sustains damage or loss when a borrower is uninsured or underinsured, the credit union can also find itself “upside down,” with the claims amount they receive insufficient to cover its exposure.   The Good News The solution? When you partner in a high-quality collateral protection program with State National, you can receive Waiver of Actual Cash Value (ACV) coverage — which means State National will pay the value of the entire loan amount remaining and not just a car’s value at the time of a claim. In “normal” times, Waiver of ACV coverage is a valuable tool for decreasing risk in a lender’s portfolio. In times like these, when lenders are already being double-squeezed by low net interest margins and increases in bad debt, it’s a vital part of a successful credit union’s risk mitigation strategy. For more information on how this valuable solution can help your credit union, contact one of our specialists today!   To read the second article in this SNC Spotlight series, visit Part 2, Maintaining Your Competitive Edge.

Borrowers Feel the Inflation Pinch – Your Portfolio May Feel the Pain

State National’s CPI Program Minimizes Borrower Noise and Protects Your Portfolio Better Than Any Other — Bar None. “The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett It’s human nature to want to cut and run when stock market values start dropping. When markets are on the climb, people are eager to participate, but feel real loss when unrealized gains take a dip. This reaction is understandable; you’re not alone if you question whether or not your stock market investments will yield long-term gains for you when the economy shifts and uncertainty rises. When you see your stocks or 401K dropping in value it can be easy to overreact in a way that is detrimental to your long-term interests. But we can learn from those who act impulsively — 66% of investors report regret of impulsive or emotional investing decisions!   How Does This Apply to a Lender's Portfolio? What does maintaining a stock portfolio have to have to do with maintaining a strong loan portfolio? Well, when you apply Buffet’s maxim to the performance of your CPI program in today’s economic environment, the same principle applies: An economy with rapidly rising inflation and increasing debt is erosive to personal balance sheets.  In this kind of environment, which is the type we are experiencing currently, it’s likely you will see increased CPI activity in your loan portfolio — but that doesn’t mean your CPI program isn’t working. In fact, it means just the opposite — your CPI program is indicating there is a fundamental shift in your loan portfolio! In more typical economic conditions, the proactive measures employed by high-quality providers keep friction to a minimum, while poorly designed or maintained portfolio protection programs can result in continuous borrower noise. However, an uptick in a well-run program's CPI activity is an early indication of external economic shifts. This reflects changes in the financial circumstances of your borrower base and indicates your loan portfolio is mirroring increased risk exposure.   Consumer Budget Woes Can Mean Friction for You In 2022 alone, prices for housing, transportation, fuel/energy, and food have increased by 15-50%. In order to compensate for these higher prices, consumers are looking for ways to stretch their dollars. While some might be able to make ends meet by reducing discretionary expenses, those without sufficient discretionary income are making hard choices. One of the ways consumers may attempt to cut household expenses is by reducing their auto insurance coverage — and in some cases dropping their private insurance coverage entirely. In 2021 the Insurance Research Council reported that 1 in 8 drivers was uninsured, with some states seeing uninsured driver rates of 1 in 4 or even 1 in 3! What to Expect Auto Insurance Rates Are Rising and Will Continue to Rise Many auto insurers have already started to submit state filings for increased rates. Bankrate shares data from S&P Global Market Intelligence that shows the average rate increase filing for auto insurance is about 4.9% this year. This is a direct result of inflation and the increased cost of car ownership, including the cost to repair and replace vehicles.   “In the past two years, we have seen an unprecedented increase in new and used auto prices, and lenders have reacted by increasing loan terms from 72 months to 84 months to even 96 months. Current economic actions are working to bring auto prices down, and when this happens, lenders will have auto loan portfolios with loan-to-values that are upside down, exposing them to much greater risk of loss” —John Pearson, EVP of Sales More Consumers Will Fall, or Continue to Fall, Into Debt The government’s stimulus checks have run out, as have the grace periods many financial institutions implemented at the beginning of the pandemic. Nearly a quarter of American households report no emergency savings. At the same time, many individuals have returned to work and are again bearing the costs of gas, transportation, childcare, and time needed to go into the office. Prices will continue to rise and as a result of this 43% of American consumers expect to add to their debt in the second half of the year. A Continued Increase in Uninsured Borrowers With the state of our economy, an increasing number of consumers are actively choosing to reduce insurance coverage and will likely continue to make difficult financial choices over the coming months. This makes portfolio protection with robust tracking and proactive verification more necessary now than ever. When these measures are combined with a comprehensive multichannel notification system that reaches uninsured or underinsured borrowers early, and an insurance program that provides them with coverage, you can ensure both your loan portfolio and your borrowers will be protected.     Maintaining Your Competitive Edge During Auto Industry Inflation   Practical Next Steps Under these conditions, the comprehensive tracking and protection offered by State National provides greater benefit than ever, because the services we provide allow lenders to address borrower payment issues proactively. Tracking also gives you an early warning that a borrower’s credit may be slipping, which can be an early indicator of a borrower in distress. This gives you an opportunity to reach out and help them by offering additional support and guidance. For borrowers who choose to reduce their private coverage or let their policy lapse, State National provides increased communication and activity on your behalf and, if necessary, allows you to insure their loans to protect your financial institution. Yet, State National’s comprehensive, proactive verification leaves your larger, compliant borrower population undisturbed. High-Quality Protection Safeguards Everyone And it’s not just uninsured or underinsured borrowers who are protected — these comprehensive measures serve to protect both those who are compliant and non-compliant, as well as your customer base as a whole. All of your customers benefit when your institution keeps losses to a minimum and protects insured borrowers from the consequence of uninsured ones — because when lenders have to increase their interest rates to cover the increasing charge-offs for uninsured borrowers, all borrowers pay more. Rising interest rates also make the lender less competitive in the marketplace and fewer loans means less interest income to offset losses. At low levels, this isn’t an issue, but in high-loss environments it can create a downward spiral, where fewer loans lead to higher interest rates, which leads to fewer loans…     How State National Reduces Borrower Noise   Why a Program With State National Is the Smart Choice InsurTrak: Fully Transparent and Immediate Access to Real-Time Data – InsurTrak is the industry’s only system built from scratch specifically for CPI. It’s your single sign-on, real-time source of truth for insurance tracking, claims, and reporting, resulting in maximum ease, speed, and transparency. Your loan portfolio data is at your fingertips, accessible instantly, all in one place. Additionally, you can access borrower phone call recordings and check statuses directly on InsurTrak, 24/7. Flawless EDI Verification – State National has always been a leader in EDI verification. We currently receive EDI auto transactions from over 650 insurance carriers directly or through trading partners. We can integrate with any insurer using the EDI exchange, either directly or through a third party. We verify over 70% of loans using EDI, and we make it a priority to ensure this functionality always runs smoothly, with no glitches, errors, or downtime. Comprehensive Web-Based Robotic Automated Processing (WRAP) – Our AI-based WRAP process saves your financial institution money and your employees time. WRAP uses custom-programmed software bots and machine learning to automatically extract borrowers’ insurance information and update it in InsurTrak — without any human effort or intervention. All uninsured new loans and policy cancellations also go through WRAP to find valid insurance before any notifications are ever sent to a borrower. This revolutionary AI automation means increased speed and accuracy and a dramatic reduction in borrower noise. A Truly Interactive Text Messaging Program – In addition to our other various notification methods, custom two-way texting is another platform for reaching your borrowers. While other CPI providers may offer a limited text solution or hand you off to another company, we are the only one in the industry who truly takes the work out of your hands by setting up and running the program on your behalf. Borrowers can always upload their insurance online from their mobile devices, or simply respond to the text with an image of their insurance information. Our texting program is highly secure and fully compliant with all regulations, and there is no extra cost to you, now or later. QR Codes – This notification feature makes it even more convenient for borrowers to respond. Now on all paper notices mailed to borrowers, personalized QR codes embedded with the recipient’s account details take them straight to MyLoanInsurance.com where they can view an educational video customized to their specific situation and easily remedy any impairment. In addition, lender-specific QR codes are also available that go directly to your branded MyLoanInsurance.com site. These can be placed on your website, loan closing paperwork, or anywhere you want to remind borrowers they need to send in their insurance information. More Claim Dollars, Delivered Faster – Our claims process is quick and painless because we are the insurance carrier. No paperwork is required for most claims, and we pay 20% more in claims than our competitors, with the fastest turn time in the industry. Our exclusive InstaClaim technology processes and pays some claim types automatically, in under 10 seconds. Simply put: No other provider has the ability to offer this kind of speed and ease. Backed By Parent Company Markel – Both State National and Markel have been proudly rated “A” (Excellent) by AM Best for many decades and are regarded as industry leaders. Because State National owns all aspects of service delivery for portfolio protection, a program with us delivers the best of both worlds — the specialized, personalized, relationship-driven service and leading-edge innovation that has been our hallmark for 50 years, plus the well-capitalized backing of a $33 billion Fortune 500 company. Our combined tenure, strength, and expertise translates to unmatched peace of mind and security for our partners.   State National has pioneered a culture of continuous improvement for the past half century. Our unwavering commitment to investment in technology and service delivery helps ensure we have the ability to best serve our partners in both good times and challenging times, and we can help your business weather any economic storm. “The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.” – Arnold H. Glasgow So remember — when times seem uncertain and it’s tempting to make short-term decisions that won’t pay off in the long run, the best thing you can do to keep your loan portfolio’s collateral and borrowers protected is to stay the course and think big picture. Keep in mind that all providers must deal with the same economic factors; those offering less-specialized, lower-quality programs not only won’t escape today’s inflationary effects, they’ll be hit even harder by them — which means so will your financial institution.   Protect your loan collateral and your borrowers in the smartest and most thorough way possible by maintaining a reliable, transparent CPI program with the only provider who has specialized in guiding lenders through times of economic volatility for half a century — State National Companies.   Have a question? We are here to help!

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