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Expanded Use of AI-Based WRAP Delivers Results

Our WRAP (Web-Based Robotic Automated Processing) system is continuing to increase efficiencies. WRAP now proactively searches for new policy information from 8 major carriers, including the country's top 5 auto insurers.

Expanded Use of AI-Based WRAP Delivers Results

Innovations in Robotics Processing Continues to Increase Efficiency

Robot Icon WRAP stands for Web-Based Robotic Automated Processing, and it has delivered incredible results for State National’s clients since it was introduced in 2019. In fact, you could say that our AI-based bot “team” has started a revolution in automated insurance verification.

Before WRAP, our insurance verification staff had to complete all web-based verifications manually, by logging in to insurance companies’ websites to find the data they needed. But with WRAP, thousands of borrower accounts can be automatically updated in our proprietary InsurTrak tracking and reporting system every day, without any human intervention whatsoever. This frees up our human staff members, leaving them even more readily available to help our clients maximize results from their CPI program.

These hard-working software bots are fast, precise, and tireless — reducing bottlenecks, accelerating speed, and increasing accuracy around the clock. They hate inefficiencies and love serving our clients 24/7!

Continual Improvement — WRAP Just Keeps Getting Better!

Since our initial investment in WRAP, we have continually expanded its use to search for, locate, and update our systems with up-to-the-minute, real-time insurance information.

We could see right away that WRAP was delivering remarkable results, so we quickly started looking for other places to put this powerful AI technology to work. Our research showed that 40% of all auto insurance policies canceled with the top 5 carriers (Allstate, Farmers, GEICO, Progressive, and State Farm) were subsequently renewed with one of the other five. We also noticed that many borrowers who canceled with other carriers ended up also choosing one of these 5 leading companies.

So, in September of 2020, we programmed our bots to proactively search for new policy information within these 5 large carriers whenever we are alerted that any borrower’s policy has been canceled. This happens 3 days before a notice would have been sent to a borrower with a canceled policy — which means many notices that previously would have gone out due to lack of available information now just never happen.

Little Bots, Big Results

A month after putting WRAP into action in this new way, we saw about a 30% drop in these types of notices sent to borrowers, and we expect this percentage to increase even further in the months ahead.

To learn more about how our bots work for you, watch the video.

Today, WRAP technology is doing more than ever to increase efficiencies at State National. In fact, we also added some new bots to the team that can search for insurance on new loans as they hit the State National system — searching the same 5 carriers they do for cancellations. Early results show the bots are very busy, looking up over 70,000 new loans each month with a 20% success rate. This results in a significant reduction in notices and related customer noise while the borrower is free to enjoy their new vehicle.

Our Investment in WRAP Pays off for Everyone

While it’s too early to accurately measure the overall long-term efficiency of putting insurance cancellations and new loans through WRAP, we have a foundational understanding of what our bots have been able to accomplish since we initially onboarded them as members of our State National team.

Comparing 20 accounts from 2017 to 2020, our team measured paper notices, inbound calls, and uploads to our web-based insurance portal, MyLoanInsurance.com. The results? Impressive! Paper notices went down 16.1% and inbound phone calls down 25%. That means we were able to increase total insurance verifications by 76% without adding personnel — resulting in less friction and less borrower noise.

Not only that, but we’ve also been able to utilize bots to streamline our claims processes with InstaClaim, which automatically settles some types of claims in 6 seconds or less. Claims paid in seconds, with ACH payment initiated overnight, instead of waiting days or weeks? There’s simply nothing else like it in our industry.

The past several years have seen leaps in technology that have helped us optimize how we receive and process data, and we continue to look for more opportunities to speed up and streamline our workflows. In fact, we’ve got another exciting technology launching very soon, and it promises to be a game-changer. Stay tuned!

State National’s commitment to innovation continues to translate to a positive client and borrower experience credit unions, banks, and finance companies just can’t get anywhere else.

David Crawford
David Crawford
David Crawford joined State National in 1998 and was instrumental in the creation and leadership of the centralized Service Operations for Lender Services, overseeing the continued growth of the Document Processing, Contact Center, Account Services, and Product Support groups. In 2018 he assumed the newly created role of Vice President of Strategy & Innovation, where he is the primary interface between IT and business users. He is responsible for researching, selecting, and implementing technology-based solutions to further enhance service delivery both internally and to State National’s clients.

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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