Countrywide Credit Industries, a mortgage sales powerhouse, is getting serious about insurance.
The Calabasas, Calif., company's Countrywide Insurance Services subsidiary is beefing up its offerings and working to build sales outside its customer base.
"We're very interested in expanding our insurance business at Countrywide. It's very similar to the mortgage business," said Steven D. Phillips, president of Countrywide Insurance Services. "I don't think five years ago we realized the strategic potential of insurance."
In October it unveiled an Internet site that provides on-line insurance quotes for a range of policies offered by the company, including homeowners, auto, home warranty, disability, annuities, and term life. Now the company wants to develop correspondent-type relationships with banks, credit unions, and home builders.
To develop these relationships, Countrywide will provide anything from a few products and services to a turnkey operation, Mr. Phillips said. Some programs could be privately labelled, he said. He said the first of the partnerships should be in place within three months.
Mr. Phillips, who views large companies like State Farm as prime competitors, says he believes Countrywide can compete on both price and service.
The same reputation Countrywide has for servicing mortgage customers can be built for servicing insurance policyholders, he said. The company is scrapping its sales-only approach and plans to handle some of the insurance claims servicing, he added.
Countrywide's bid to become a bigger player in insurance is part of a plan to diversify its income stream.
The mortgage giant is not a newcomer to the insurance business: It has offered homeowners insurance since the company was founded in 1969.
However, growth in the insurance business has been faster paced in recent years. Five years ago Countrywide only sold insurance across 30% of the country. Now it covers 98% of the nation and has 300,000 policyholders, he said. And its insurance staff has grown to 250.
How significant Countrywide's insurance sales are today is difficult to determine, because the company does not break out revenues for any of its subsidiaries.
But Gary Gordon, a PaineWebber Inc. analyst, said there's no reason to believe insurance isn't doing well.
Countrywide has "a terrific track record," he said.
However, it is easier to sell insurance when closing a new mortgage than by cross-selling.
"This isn't a captive audience anymore other than they have to open a statement every month," he said.
That's one of the reasons Countrywide is looking to build sales among the general public.
"We have an efficient sales and marketing platform and we really have no reason to stay (just) with Countrywide home loan customers," Mr. Phillips said.
The company, which works with 50 underwriters, has four regional insurance offices.
