Align Credit Union Forms Insurance CUSO

Align Credit Union of Lowell, Mass. has formed Inlign Insurance Services, LLC, an insurance CUSO that will operate in its Danvers branch, near the Atlantic coast about 30 miles east of Lowell.

Inlign Insurance offers auto, home, condo, renters, flood, boat, motorcycle, recreational vehicle, commercial real estate and business insurance to both members and non-members in its service areas of northeast Massachusetts and southern New Hampshire.

Align Credit Union ($615.3 million in assets, 27,290 members) had a good relationship with another insurance agency for years. However, five years ago the credit union’s board decided at a strategic planning session that it wanted to form its own agency, said Thomas M. Hammond, Align’s EVP/CFO and president of the Align subsidiary.

One reason to have an in-house insurance agency was to increase the credit union’s recurring, non-interest income. Also, having its own agency allowed the credit union to control its contact with members throughout the process. And having the insurance business in house would increase its branch efficiency, Hammond said.

Credit union employees work with members to produce about 100 auto loans and $15 million to $20 million in mortgages every month. Now they can extend those relationships to insurance.

“We decided it was time to create our own insurance company to provide even greater service and savings,” Hammond said. “We’re going to be right there for their insurance. It’s a natural extension of our current business model.”

Its first step was to hire LeeAnne Powers in 2015. She had spent more than 25 years in the insurance industry, much of that time managing a group that worked directly with credit unions. She received deeper training in credit union operations after joining Align.

“Every credit union is different, but I understand the culture of the credit union world,” she said.

The next part of the plan was to buy a local agency. After a long search, the credit union found a match.

“We got all the way to the altar, and we got jilted,” Hammond said.

Rather than waiting another year or so, the credit union decided to go ahead and build its CUSO from scratch. Powers was appointed Inlign’s SVP, and sole full-time employee. Hammond is the CUSO’s president, but retains his roles with the credit union.

Inlign is working with carriers including Plymouth Rock Assurance of Boston, The Travelers Companies of New York, and Johnson & Johnson Inc., a 90-year-old company based in Charleston, S.C. that specializes in writing difficult-to-place policies.

Align also offers life insurance to members through CUNA Mutual Group’s TruStage, but Hammond said the TruStage market is driven by mail to members who are often distant from Align branches.

Align was founded in 1922 as Northern Massachusetts Telephone Workers Credit Union, and changed its name to Align in 2013.

Other credit unions with insurance subsidiaries include:

• Kinecta Financial & Insurance Services, LLC of Kinecta Federal Credit Union based near Los  Angeles ($4.6 billion in assets, 247,693 members);
• Oregon State CU Insurance Agency of Oregon State Credit Union based in Corvallis, Ore., about 50 miles from the Pacific coast ($1.4 billion in assets, 118,418 members);
• Scient Insurance Services of Scient Federal Credit Union based in Groton, Conn. ($249 million in assets, 21,673 members);
• Patelco Insurance Services of Patelco Credit Union based in Pleasanton, Calif., in the San Francisco Bay area ($7.2 billion in assets, 360,964 members);
• OnPoint Insurance Services of OnPoint Community Credit Union based in Portland ($6.1 billion in assets, 383,376 members);
• and CRCU Insurance Services, LLC of Community Resource Credit Union based in Baytown, Texas, east of Houston ($554.8 million in assets, 49,175 members).