Departing Fleet Chairman Eyes Insurance Game

Old bankers never die. They just start selling insurance.

At least that's what Joel B. Alvord - who recently announced plans to step down at yearend as chairman of Fleet Financial Group - seems to have in mind.

In an interview last week, Mr. Alvord made clear that he is intrigued by the possibilities of a new career in the insurance industry, though he stopped short of declaring his exact intentions.

Indeed, Mr. Alvord said, such a move would be a natural; after all, he hails from the insurance capital of the world. "I'm from Connecticut, from Hartford - I know a fair amount about the insurance business."

And his cool Yankee demeanor couldn't mask his excitement about the nexus between banks and insurance, particularly in the wake of the recent Supreme Court decision that cleared the way for banks to play a broader role in insurance sales.

Banks, through mass marketing to their vast customer bases, "have a real opportunity to take a share of the traditional insurance customer," Mr. Alvord asserted.

Mr. Alvord stopped by the American Banker's New York offices last Thursday, the day after he announced at Fleet's annual meeting that he would quit as chairman of the Boston-based company two years ahead of schedule.

The 57-year-old banker dodged direct questions about whether he is looking for a job in the insurance industry or whether he might even start his own company. For now, Mr. Alvord emphasized, he is concentrating on his remaining eight months at Fleet.

Fleet, he said, has largely absorbed Shawmut National Corp., which he headed until its acquisition by Fleet last year. So his focus in coming months will be on corporate governance and strategy.

Now, Mr. Alvord said, he has the time to begin weighing his own next move. "I've always wanted a second career, but I never sensed when it would happen."

If Mr. Alvord were to cross the divide between banks and insurance, he would be the second prominent banker in recent years to do so. In November 1994, Arthur F. Ryan jumped from Chase Manhattan Corp., where he was president, to become chairman and chief executive of Prudential Insurance Company of America.

Observers say it's not far-fetched to think other bank executives will make the leap to insurance. "A guy like this could make a difference because he could play a role as a translator between two previously segregated lines of business," said Michael D. White, a bank insurance consultant based in Radnor, Pa.

Mr. Alvord said that he has been mulling ties between banks and insurance companies since his days as chairman and chief executive of Shawmut.

"I actually explored some combinations with insurance companies ... combining distribution and sales," he said. "Obviously not the underwriting side - but that's not too different from the concept of Mellon and Dreyfus," Mr. Alvord explained.

The move didn't get beyond some conceptual planning and exploratory talks with regulators, he said. And then the accelerating pace of bank mergers overtook any plans for a direct move into insurance, he said.

"It was something we decided to put off and entertain again at a later date, and then, of course, we got into dialogue with Terry (Terrence Murray, Fleet's chief executive) and sort of put the banks together."

But a true bank-insurance company idea still has merit, he said: "I think you'll see banks and insurance companies in financial service holding companies in the next five years."

Even short of acquisitions or mergers, Mr. Alvord said the time is now ripe for insurance companies to look to banks for help with mass market sales.

And he said he is convinced that it makes sense for banks to get started now selling simple life and long-term-care insurance to customers largely overlooked by traditional insurance agents.

Banks have distribution capacity through their branches, a large base of ready customers, and information about their needs that makes targeting sales prospects easy, he said. "And what makes it even better," he added, "is that they've (banks) got the capital" to plunge into the insurance business.

Some banks are buying existing insurance agencies, but Mr. Alvord said this is the wrong approach. A more promising avenue for banks, he said, is telemarketing and direct sales of life and long-term-care insurance to individuals.

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