Summit Bancorp and Wells Fargo & Co. each announced steps this week to expand their employee benefits offerings.
Summit, which is based in Princeton, N.J., said Tuesday that it will buy an employee benefits brokerage, Madison Consulting Group Inc. The Morristown, N.J., company specializes in insurance services for municipalities.
San Francisco-based Wells Fargo, meanwhile, said Monday that it has linked itself with MassMutual Retirement Services, a division of Massachusetts Mutual Life Insurance Co., to give pension clients their benefits information over the Internet.
Terms of Summit's deal-its third insurance-related acquisition in two years-were not disclosed. A tax-free exchange of stock is expected on Oct. 30. Madison would retain its name and management.
"As the largest bank in the state of New Jersey, we have a large position in the public sector," said Jack Cussen, senior vice president and head of Summit's insurance services group.
"We felt that marrying that division to the ability to write health benefits to the boards of education, counties, and agencies makes a lot of sense," he added.
The $32 billion-asset banking company provides life, disability, and health insurance to businesses through Corporate Dynamics, Mount Laurel, N.J. It also sells property and casualty insurance through another recent acquisition, W.M. Ross & Co., Fairfield, N.J.
With the addition of Madison and its 12 consultants, Mr. Cussen projected a 60% increase, to $40 million, in insurance revenues for next year on the basis of $400 million to $500 million in expected premiums managed. Summit has 65 insurance agents.
And Madison, which also has an office in Mount Laurel, expects to bulk up its business, said its president, Frank Cotroneo.
"It allows us to mine some of their existing customers," he said, adding Madison would market Summit's banking services as well.
Wells Fargo's service with MassMutual, called DB OnLine, will start Jan. 1.
The joint offer marks the first time Wells would provide such information directly to pensions. Plan sponsors that employ Wells as asset manager currently hire out actuarial services separately.
"Our clients asked us for a bundled solution for defined benefit plans," said Neal Ringquist, senior vice president of Wells' institutional trust group.
He said the agreement with MassMutual would not be affected by Wells' pending merger with Norwest Corp. of Minneapolis, which is expected to close Monday.
Wells Fargo provides trustee and investment services for $38 billion of employee benefit plan assets in both defined-benefit and defined- contribution plans.
