Centura Banks Inc. would just as soon forget its first five years in insurance and start over.
The Rocky Mount, N.C., banking company's insurance unit has been plagued by turnover among its senior executives and growth that has not met internal expectations.
The newest leader of the unit, Charles L. Frederick, an 11-year Centura veteran and group market manager who added insurance to a string of other duties, said the bank is through hiring outside insurance veterans for top posts.
Nor will Centura be looking to hire insurance talent from other banks- not after hiring a senior vice president from BB&T Insurance Services as chief operating officer in mid-May only to see him resign less than a month later to join Travelers Insurance.
Instead, the $8.7 billion-asset company plans to go on an agency acquisition spree to build its insurance program and, with any luck, net some talent for leadership posts.
The bank is looking to buy up to five agencies over the next couple of years to expand its regional presence in the Carolinas and into Virginia, Mr. Frederick said.
"We've had enough changes in leadership that we want it to stabilize," Mr. Frederick said. "It's been frustrating."
The company's last insurance head, R. Patrick LaVoie, left in December after less than a year on the job and now is a consultant to community banks that want to get into insurance.
Mr. Frederick and Mr. LaVoie agree that there were some strategic differences in the way they viewed Centura's insurance effort.
Centura's program was only about four years old when Mr. LaVoie came on board. It had been started with some property and casualty agents hired by the bank and bulked up significantly with the purchase of two insurance agencies in 1997. However, the bank hit some bumps in integrating the agencies and in merging systems, Mr. Frederick said.
The company will look for acquisitions that are a better cultural fit, he said.
Though Mr. LaVoie had no banking experience when he joined Centura, he had been steeped in the insurance business: He had been the president of Dunlap Insurance & Bonding, a $90 million-premium agency based in Auburn, Maine, for nearly 10 years before being hired by Centura.
Mr. LaVoie said Centura liked his insurance expertise and made some positive integration steps like putting him on its senior management committee. However, the program failed to live up to double-digit growth expectations.
Centura's insurance effort is "still profitable, it's not a disaster," said Mr. LaVoie. "It's just not growing at double digits."
The banking company declined to discuss its insurance revenues.
Mr. LaVoie said he was frustrated by his "inability to convince (Centura executives) of what they had to do to reach the growth levels" they wanted.
According to Mr. LaVoie, Centura executives didn't want to hear about building up service to handle cross-selling of insurance to bank customers. During his time at the bank, he said, he wanted to add the service capability that was "appropriate to fulfill the promises we made to customers."
However, Mr. Frederick said the solution is to leverage insurance carriers' service centers instead of building them internally.
The banking company did not want to build this infrastructure, he said.
In addition to that, Mr. Frederick said, Mr. LaVoie never had the trust of bankers, who saw him as an outsider. His insurance expertise also got in the way of explaining insurance in simple terms the bankers could understand, Mr. Frederick said.
He said he himself does not have an in-depth knowledge of insurance. "I'm an idiot when it comes to insurance," Mr. Frederick said.
He said he looks at the big picture and wants to treat insurance like any other bank product. And because of his Centura background, he said, he has credibility with bank employees. "Suddenly they say, 'He's one of us,'" Mr. Frederick said.
Mr. LaVoie agrees that he was an outsider and had difficulty fitting in with the bank culture.
But Centura had some bad luck even with those steeped in the culture of a bank. Jeffrey Huff, the executive who was hired from BB&T and left within a month to take a job at Travelers, also did not fit perfectly with Centura's program. The job required him to do more day-to-day business than he did at BB&T, Mr. Frederick said.
"It was different from what he was used to; he almost felt he was going backward a little," Mr. Frederick said.
Centura also lost its personal lines manager, LuAnn Hale, who left in May to work for First Citizens Insurance Services, the insurance unit of First Citizens Bancshares of Raleigh, N.C.
Centura promoted Suzanne Whitsit to manager of personal lines and select small business, Mr. Frederick said. And the president, Reid Rhodes, and the chief financial officer, Campbell Rodgers, remain in place at Centura, he said.
The company has learned how important for insurance services the cultural fit is, Mr. Frederick said. But despite the turnover and his desire to view insurance services in 1999 almost as a start-up operation, there's no retreat, he said.
"There is not a problem here in commitment to insurance," Mr. Frederick said. "I mean, it's in our tag line: Centura, banking investments insurance."
