Bank of the West has turned to New England Insurance Co. to sell life insurance in its branches.
The Walnut Creek, Calif., bank began a pilot program last month, opening 18 of its 104 branches to nine New England sales representatives. By July, 40 brokers from a local New England agency will cover all the branches.
"We've had outstanding success with our investment product program since 1988 and thought an insurance product line was a natural," said Frank J. Bonetto, senior executive vice president in charge of the bank's branch system.
Once the program is in full swing, Mr. Bonetto said, insurance sales should generate $1 million of fee revenue. There are no plans to train bank employees to sell insurance, nor are there plans to sell insurance products from other companies, he said.
The deal is similar to last year's arrangement that put Metropolitan Life Insurance Co. agents in Glendale Federal Bank branches. That agreement was among the first attempts to take advantage of a Supreme Court decision lifting some restrictions on bank insurance sales.
Bank of the West will offer all of New England's life insurance products, its long-term-care policies, and its corporate benefit programs for business customers. Branches with insurance representatives covering them will have posters touting the insurance products, and customers of those branches will receive direct mail advertisements.
The pilot program, which began March 3, includes Bank of the West's San Francisco branches. The pilot's second phase, which begins this month, moves the program into the bank's San Jose branches.
Both parties stand to gain from the arrangement, said insurance consultant Valerie Jordan.
The bank gets an immediate experienced sales staff, and the insurance company gains distribution outlets without stepping on its agents' toes, said Ms. Jordan, who is based in Belchertown, Mass. But as in a marriage, both parties have to work at it, she said.
"The insurance agents have to build relationships with the branch people so bank employees feel comfortable turning their customers over to outsiders," she said.
"There needs to be a tremendous education not only for insurance reps in the bank channel to walk and talk like a bank, but the bank has to educate its platform people to identify insurance leads in the first place."
Indeed, the bank created a model as part of its staff training program, Mr. Bonetto said, to steer particular customers to particular products. The most difficult part of the insurance program, which will get easier with experience, he said, is preventing turf battles between the insurance agents and the bank's investment representatives, who are provided by third-party marketer Marketing One.
Eventually, Mr. Bonetto said he expects referrals to flow between the two groups.
