With Right to Sell Insurance Secured, Bank of Boston Shops for an

One month after winning the right to sell insurance in Massachusetts, Bank of Boston Corp. is on the prowl for an insurance agency.

While the bank is hoping to sell policies to all of its clients, it is also betting that an insurance program will help to bolster its private client revenues.

"Insurance is the perfect bridge from the corporate side of the bank to the private bank," said Carmen F. Effron, the bank's director of insurance. "Private bankers are always looking for ways to meet corporate clients."

A federal district judge in December ruled that federal law preempts a Massachusetts statute that bars all banks there from selling insurance. Bank of Boston had sued the Massachusetts insurance commissioner to overturn the restrictive state law.

This week, Ms. Effron told attendees of the American Bankers Association's private banking and trust conference here that Bank of Boston now plans to acquire, rather than build, an insurance sales program.

"You have to buy the people and bring them in. You can't build that from scratch," she said.

Ms. Effron should know. Before arriving at Bank of Boston, she helped to develop an insurance sales program at National Westminster Bank's U.S. retail subsidiary, before its sale to Fleet Financial Group Inc. Before that, she spent five years in Europe distributing insurance through banks, known as "bancassurance."

She warned conference attendees that getting into the insurance business would not be easy.

Bankers will face resistance from regulators, independent insurance agents, and even their own colleagues.

"Every time you say insurance, people's eyes start to glaze over," Ms. Effron said.

But the product can be effectively cross-sold to many commercial banking clients, such as family business owners. Bankers can begin a dialogue with customers about employee benefits and then sell personal insurance as part of an estate and business succession planning.

"If you're the owner of a small business and/or a trust customer, you like to deal with as few people as possible," added David E. Floreen, senior vice president of the Massachusetts Bankers Association. "It helps clients get a comprehensive financial package. It's easier to do it one place."

Many companies including Barnett Banks Inc., BankAmerica Corp., Huntington Bancshares, and Banc One Corp. are bulking up their insurance business lines by buying agencies and hiring insurance veterans. Interest in getting insurance sales up and running is not exclusive to big banks, according to the conference's planning committee co-chairwoman.

"Even small banks are going to buy insurance agencies. We don't want to reinvent the wheel here," said Jayne Lipe, executive vice president of Overton Bank and Trust, Fort Worth.

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