First Chicago NBD Corp., anticipating that its heft will attract underwriters and customers, is throwing its weight behind insurance.
The Chicago banking company took in $54 million of pretax profits last year from insurance sales through its agencies in three midwestern states.
First Chicago should have profits of $200 million in 2000, according to vice chairman Scott P. Marks Jr., who oversees credit cards and the bank's expanding insurance sales.
"While there may be many banks that will attempt to do this, one of our advantages is size," Mr. Marks said.
The company has $109.1 billion of assets.
"Because we have scale and a large credit card portfolio, we will be a preferred partner for many of the underwriters and producers," he added.
First Chicago sells policies from more than 15 insurance underwriters and has agencies in Illinois, Michigan, and Indiana. Products include life, homeowner, and automobile policies for consumers and property and casualty for businesses.
Term life insurance, a traditional product for middle-class consumers, is sold through lower-cost direct marketing techniques: mailings, telephone solicitations, and Web site ads.
The bank's next move in insurance will be to market more complicated and expensive policies to its most sophisticated clientele: private banking clients and small- and middle-market businesses.
Mr. Marks said that, although those segments need different products than the mass consumer market, the expansion will happen quickly.
"Is it overwhelming or daunting?" he asked. "No. We are not engaged in underwriting."
"We are seeking out partners who already have the right product or can modify an existing one to suit the right purpose. Then we can be up and running pretty quickly," Mr. Marks explained.
An observer said the two-pronged strategy makes sense.
"Does a bank need both programs?" asked Valerie Jordan, a bank insurance consultant in Belchertown, Mass. "Absolutely, because they represent the entire spectrum of individuals."
