CUNA Mutual may be an eight decades old company, but it is proving it has a very modern way of thinking as it undertook the development of a new product to address the insurance needs of an underserved market in the US.
Its SafetyNet project is an experimental program that aims to address individuals who may not have the financial capability of absorbing shocks arising from job loss, illness or other unexpected expenses.
“I think you can’t watch the news or not open the newspaper without realizing that there’s a problem with people living tight, and living stretched,” Mark Greene, the project’s director, told local media outlet
The Cap Times.
The Times said that the company is looking at a viable business model by catering to a demographic that do not register on the radar of traditional insurance firms. Greene cited a Federal Reserve Board survey, which said that 47%, or nearly half, of Americans won’t be able to pay for an unexpected expense of $400 without getting into debt.
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“It’s a problem that’s so widespread and prevalent, that even if you’re able to meet the needs of a portion of the 47%, that’s the foundation for building a business,” Greene said in the report.
Under the first plan sold through the SafetyNet project, customers pay $5 to $30 in monthly premiums to get lump sum payments of $1,500 to $9,000 to cover a job loss or the onset of a disability. The product is initially available in Wisconsin and Iowa.
In the offing is another feature which will allow clients to take out policies on behalf of other individuals. Greene said that the idea for this feature came from feedback from parents who want to assist their children who are struggling in the job market and landlords who want to provide a contingency for tenants to avoid the costs related to empty units in their property.
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