Seeking to become a top force in the North Carolina insurance field, Centura Bancorp has announced deals to buy two insurance agencies in recent weeks.
This month the Rocky Mount, N.C.-based company announced that it had agreed to buy Raleigh-based Moore & Johnson Agency Inc. in a deal that is expected to be finalized at the end of January. Last month Centura bought Betts & Co., also of Rocky Mount.
Centura would not reveal the prices, but executives said the deals will give it one of the biggest insurance businesses in North Carolina, by annual revenue. They declined to disclose a total.
The purchases would increase Centura's insurance staff to 75 from 20. The company started its own insurance business in 1994, and it has proved profitable, said Centura vice chairman Kel Landis 3d. However, he said, acquisitions were necessary to attain the critical mass that is needed to make an insurance business truly worthwhile. "We felt like we needed to establish more of a foundation for that business," Mr. Landis said.
The agency purchases will give the bank more expertise and a wider geographic distribution network.
Centura, with $7 billion of assets, has mostly sold property and casualty insurance but plans to expand its life insurance business. The purchase of Moore & Johnson-the deal was announced Dec. 18-will help with that, Mr. Landis said.
Moore & Johnson's territory is the Raleigh-Durham-Chapel Hill region, known as the "triangle," while Betts serves clients in eastern North Carolina.
Centura also signed recently a partnership agreement with Travelers Insurance Co. that will let customers of the banking company buy Travelers' insurance products by telephone or Internet 24 hours a day.
Val Jordan, an insurance consultant in Belchertown, Mass., said banks can indeed buy their way to success in the insurance business, as Centura hopes to do. But unanticipated problems can turn seemingly can't-lose deals into headaches, she said.
Among the problems that may become visible only after a deal is consummated are disgruntled customers, antiquated computer systems, and agents unaccustomed to selling a wider range of products. "It's like picking up a rock and having all kinds of little critters crawl out from underneath it," Ms. Jordan said.
Banks account for just a sliver of traditional insurance sales. Last year they captured less than 1% of the $271 billion property/casualty market.
