Automation fintech Open Lending logged a jump in revenue and certified loans as auto lenders increasingly signed on to its insurance platform.

Open Lending’s artificial intelligence-powered platform allows auto lenders in the prime space to dip down further in the credit spectrum by insuring up to 85% of losses on loans underwritten using its parameters. Lenders pay Open Lending an insurance premium as well as a fee per contract, originated using the technology.

Certified loan volume surged 148% year over year to 46,408 “certs,” with the core credit union and bank business generating 87% of certified loan growth in the quarter, Open Lending Chairman and Chief Executive John Flynn said during the company’s earnings call last week. OEM certs originated with two unnamed captive financiers grew 136% year to date, he said.

“Our top ten lenders, excluding OEMs, have increased their certification volume by 140% year-to-date 2021 as compared to 2020, and six of them have hit an all-time monthly cert volume record in June,” Flynn said.

Diving deeper, one OEM captive logged certified loan growth of 185% YoY and 33% sequentially amid a regional and loan term expansion, President and Chief Operating Officer Ross Jessup said on the earnings call, noting that 5% of the captive’s originations were 75-month terms. The second OEM captive, on the other hand, grew a modest 42% sequentially, he said, noting that it was “offline” between April and October 2020.

“We expanded terms to 75 months in early April 2021, and have seen 75-month loan terms represent about 16% of their originations since April,” Jessup said. The fintech is currently in talks with other OEMs, but no timeline for when those partnerships will go live was provided.

Revenue grew 177% to $61.1 million for the quarter and facilitated loan origination volume also ballooned 185% YoY to $1.2 billion, according to the company’s earnings supplement. Used vehicles accounted for 83.1% of total certs, and new vehicles accounted for 16.9% of total certs. Indirect originations accounted for 84.4%, while direct originations accounted for 15.6% of certs.

Meanwhile, 22 contracts were executed with new lenders, bringing the total number of asset lenders that have generated certified loans in past 12 months to 380, Flynn said, noting that seven of those lenders were classified as “Tier 1” accounts, or lenders with more than $1 billion in managed assets. One was a “large regional bank,” he said, with assets more than $9 billion.

The fintech is expanding its refinance offer, too, having added five new credit unions and banks to the platform. Refinance volume was almost 20% of total certs, and hit a record in June, Flynn said.

AI and machine learning have long been utilized in auto finance for underwriting, customer service and decisioning. Recently, more lenders, such as Axos Bank, have turned to the technology to expand their credit box. Tricolor Auto Acceptance, for one, uses AI and machine learning to underwrite to thin- and no-file Hispanic consumers.

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