In the ever-evolving world of financial services, banks and mortgage lenders are constantly seeking new ways to diversify revenue and deepen customer relationships. One area ripe with opportunity, but often overlooked, is insurance.
Traditionally, monetizing insurance has meant getting licensed, training staff, and navigating the complexities of regulatory compliance. Understandably, most banks and lenders have avoided this route, as they don’t want to stray too far from their core business.
But here's the good news: there are now modern, turnkey ways to offer insurance to your customers – and earn from it – without becoming an insurance agency yourself.
Let's explore how this works, why it makes sense right now, and how banks and lenders can tap into a new revenue stream without taking on the risks or responsibilities of being an agent.
WHY INSURANCE MAKES SENSE FOR BANKS & LENDERS
Insurance and lending are more closely connected than most people realize. If you're in the business of home, auto, or personal lending, insurance is a built-in part of the customer journey. You already ask for proof of coverage, and in most cases, your borrowers must purchase policies before you can close the deal.
Yet, in most of these scenarios, your customer is left to fend for themselves – shopping around for quotes, calling agents, comparing policies, and trying to understand the fine print. It's a fragmented process, and it doesn't reflect the seamless, digital-first experience today's consumers expect.
By providing an easy, built-in way to compare and purchase insurance, you can offer a much better customer experience. And when done right, you can also monetize it – without writing policies, handling claims, or hiring licensed agents.
THE TRADITIONAL ROADBLOCK: BECOMING AN AGENT
In the past, the only way for a bank or lender to benefit financially from insurance sales was to become a licensed insurance agency. That meant:
- Licensing individuals or the institution itself
- Investing in compliance and ongoing regulatory oversight
- Hiring or training staff to handle quotes and policy questions
- Maintaining Errors & Omissions (E&O) coverage
- Managing carrier relationships
This route not only takes time and money, it also creates operational distractions. Many lenders rightly ask, "Is this really worth it?"
Fortunately, technology and partnerships are changing the game.
EMBEDDED INSURANCE: THE SMARTER WAY TO MONETIZE
The new model, known as embedded insurance, is quickly becoming the preferred path for banks and lenders looking to monetize insurance without the burden of selling it.
With embedded insurance, you partner with a licensed, tech-enabled insurance platform like SimplyIOA. The platform is already licensed, already integrated with multiple national and regional carriers, and already built to deliver fast, accurate quotes in real time.
You simply plug into the platform – either via API, widget, or co-branded landing page – and offer insurance directly within your customer journey. When your customer gets a quote or purchases a policy, you receive a referral fee or revenue share.
No licensing. No overhead. No compliance headaches.
A SEAMLESS EXPERIENCE FOR YOUR CUSTOMERS
From the customer's perspective, embedded insurance feels like an extension of the service they're already getting from you. For example:
- A mortgage customer closing on their first home is prompted to obtain homeowners' insurance before closing.
- Instead of being sent elsewhere, they're given access to a co-branded insurance portal where they can compare rates from multiple carriers and bind coverage in minutes.
- The policy is sent to your team automatically, satisfying closing requirements and streamlining documentation.
The process is fast, digital, and intuitive. Your customer saves time and feels supported. And you earn passive revenue while maintaining focus on your core offering.
HOW TO CHOOSE THE RIGHT INSURANCE PARTNER
Not all insurance platforms are created equal. If you're exploring embedded insurance, here's what to look for in a partner:
1. Fully Licensed and Compliant
Your partner should be licensed in all 50 states and assume all regulatory risk. That's how you avoid the agent route entirely.
2. Multi-Carrier Options
Customers want choice. Companies like SimplyIOA connect to dozens of carriers so your clients can compare policies and pricing in real time.
3. Digital-First Experience
Look for a platform that can be integrated into your existing digital tools, whether that's your loan origination system, mobile app, or CRM.
4. Transparent Revenue Model
Your partner should offer clear revenue-sharing terms, with no hidden fees or operational complexity.
5. Customer Service Support
You shouldn't have to field insurance questions. Your partner should provide licensed agents or chat support to assist customers directly.
MONETIZATION WITHOUT THE MISSION CREEP
The appeal of this model is that it allows you to earn from a product that your customers already need, without having to change your business model or dilute your mission. Insurance becomes a value-added service, not a distraction.
You can generate new, recurring revenue from insurance referrals while improving the speed and satisfaction of your core lending process. And in today's rate-driven, margin-tight market, every bit of non-interest income matters.
Banks and lenders don't need to become insurance agents to benefit from the insurance economy. By partnering with the right platform, you can seamlessly integrate insurance into your process and benefit your bottom line.
Want to help your customers get the best insurance options? Partner with SimplyIOA and give your customers the best of both worlds!
