Glenfed, Met Life Team Up on Insurance Sales in Branches

Glendale Federal Bank is looking to Metropolitan Life Insurance Co. to help it boost sales in its fledgling life insurance unit.

The $15.6 billion-asset thrift has opened the doors of its Los Angeles County branches to 17 Met Life insurance agents. The two companies hope eventually to increase the sales force to 40 and expand the program throughout California.

"The program we've developed with Met Life brings to the table a very powerful new marketing force," said Stephen J. Trafton, chairman and chief executive of the Glendale, Calif.-based thrift.

Metropolitan Life, second in size only to Prudential Life Insurance Companies of America, is the largest insurer to announce plans to sell its policies through the bank channel. Its deal with Glenfed is its first attempt to take advantage of a Supreme Court decision lifting some restrictions on bank insurance sales.

Under its agreement with Glenfed, Met Life agents in the bank's branches will sell policies underwritten by Met Life only. Met Life will work with Glenfed to coordinate marketing programs and to develop a customer referral program, said John F. Chatfield 3d, a vice president in charge of Met Life's banking group.

Met Life and Glenfed refused to disclose the financial terms of their deal. Other companies that supply investment representatives to bank branch lobbies - third-party marketers - typically pay rent based on the volume they generate.

"Met Life has been closely monitoring the bank marketplace for some time," Mr. Chatfield said. It is "currently in dialogue with a number of financial institutions" about setting up a program like the one at Glenfed.

Mr. Chatfield said Met Life is "positioned" to sell mutual funds and other investment products through banks too.

But some consultants remain skeptical.

Insurance agents, who typically sell one policy a week, would have to double their production in order to make an insurer's partnership with a bank profitable, said Kenneth Kehrer, an insurance consultant in Princeton, N.J.

Mr. Kehrer noted the failure of earlier attempts by Metropolitan to sell through banks, including a program at Mercantile Bancorp., St. Louis, in the early 1980s.

Driving the New York-based insurer's interest in the bank channel is the fact that sales of life insurance through its 10,600 career agents are declining. Sales dropped 7.6% from 1994 to 1995, according to Michael Albanese, an analyst at A.M. Best Co., Oldwick, N.J. Industry sales during the same period plummeted 11%, he said.

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