NAFCU Podcast: The Current State of CPI

 
 
Anne Holtzman, Senior Vice President Risk Management
In her current role with Allied Solutions, Anne Holtzman is responsible for internal product development and identifying and developing partner vendor strategies that serve to provide risk management solutions to all facets of lending institutions. She has over 30 years of experience in the insurance industry, serving in various executive level positions for both the personal lines automobile insurance industry and now in a service support role for financial intuition clients. Anne has strong recovery expertise in areas of repossession, total loss, and GAP claim adjudication.

 

In this episode:  

[01:49] The affordability of insurance along with the affordability of vehicles is seeing insurance cancellations on the rise. Average loan balances have increased by almost 38% from 2021 to 2023.  

[02:23] All of those levels point to a need for a lending institution to have a collateral protection or risk management insurance program.

[03:47] The average collateral protection insurance loss was around $3500. In 2023 the average is over $6000.  

[04:51] Collateral protection insurance not only protects the lender’s financial interest in the collateral it also has a dual interest effect to it. That policy is applicable to the borrower as well. 

[10:15] When you look at all the data out there, 2024 is definitely going to see the decrease of used car values that we are going to normalize. If those loans were made from 2020 forward deficiency balances could be larger than we have ever seen them. The pressure on lending institutions to be able to collect that deficiency balance gap through collateral protection insurance programs is going to be an absolute focus. 

[11:48] We will see some of the severity in collateral protection normalize but it is still going to be high because low balances and vehicle demand is high.