By Allen Moss, VP, Regional Business Development
One of the most valuable aspects of obtaining a blanket policy to protect collateral portfolios is its potential to boost internal efficiencies for community lenders. But in an economic climate that increasingly places emphasis on sustainability and environmental consciousness, blanket insurance concepts may also help lenders reduce their impact on the environment as well.
Why Emphasize Sustainability?
Every savvy business leader knows that understanding the “why” behind any initiative is critical to that initiative’s success. When members of an organization grasp the purpose of a task or decision, they not only feel more bought into the accomplishment of that task, but they will have an easier time making independent decisions that contribute to the task’s completion.
In my view, there are three primary reasons to emphasize sustainability in everyday processes.
- Reduce negative impacts on the environment. We all want to do our best to preserve the natural environment in which we live so that both ourselves and future generations can continue to enjoy it and thrive in it. Simple, common-sense changes that can alleviate a man-made burden to our planet are a no-brainer.
- Save money on resources and supplies. In some cases, what is good for the environment is also good for the bottom line. Going paperless and reducing the need for disposable supplies can help a business reduce operating costs.
- Consumers are increasingly interested in sustainability and environmental consciousness. As Millennials and Generation Z begin to make up a larger share of the consumer population, interest in environmental issues is expected to increase. Community lenders that lead the way in sustainability will better suit the desires of their customers.
How does blanket portfolio insurance help the environment?
So, can a blanket policy for mortgage, consumer, or equipment lending portfolios help community lenders be more environmentally conscious? I would argue yes, for the following reasons.
- Reduce use of paper and other one-time use supplies. The traditional track and force-place insurance model involves a lot of paper. From insurance policies kept on file to notices of insurance lapse, reminder letters sent to customers, and other paper documents sent back and forth, the supplies can pile up in a hurry. A blanket policy eliminates much of that paperwork, not to mention the time and attention it requires.
- Reduce delinquency rates and repossessions in consumer lending. Many community lenders tell us that high CPI premiums force-placed on already struggling loans cause many of those loans to fall into delinquency. This, in turn, requires repossession to occur, which can require towing, storage, labor, and a host of other expenditures. By avoiding the high costs of CPI puts on customers, these costs, both monetary and environmental, can be avoided.
Blanket insurance concepts emphasize efficiency and quality of coverage in portfolio risk management. In addition, I believe they are also in line with the public’s growing emphasis on reducing environmental impact, which makes blanket coverage a win, win! Blanket coverage is available for as Blanket VSI, Blanket Mortgage, and Blanket Equipment.