The latest survey of banks that sell insurance has found few that are declaring victory.
Of more than 240 banks that responded to a national survey of bank insurance services, three-quarters said their efforts were moderately successful or unsuccessful. The remainder described their programs as successful.
But the American Bankers Association Insurance Association, which commissioned the study, said it is optimistic. Two-thirds of those surveyed had two years' experience or less at insurance sales.
"When you look at this phase of the banking industry in insurance," said Larry P. LaRocco, managing director of the ABA's insurance unit, "you're seeing there are growing pains going on that are similar to those that accompanied mutual funds. It's not all smooth."
The ABA's insurance association, which has 13 big-bank members, is itself just spreading its wings. This is the first study from the two-year- old group to go beyond legislative and legal issues related to bank insurance sales.
Mr. LaRocco said the survey, done by American Brokerage Consultants in St. Petersburg, Fla., will be repeated annually to provide benchmarks for banks of all sizes.
The initial findings showed that those new to insurance are broadening product lines and experimenting with delivery channels, he said.
Sixty-five percent of banks surveyed said they relied on internal distribution, and 30% said they use third-party marketers or relationships with outside insurance agencies.
The most successful way to sell was still the old-fashioned house call. On a scale of 1 to 5, banks' average rating for visits to a home or business was 3.52. Targeted direct mailings scored 3.28, bank-employee referrals 3.25, and program and product brochures 3.18.
"Banks have not yet determined that the marketing programs they have put in place are the be-all and end-all," Mr. LaRocco said. "I think they are trying to hit singles and doubles in the business."
The survey also found that small banks have many more insurance customers buying life and health insurance than large banks, per $100 million of assets. Mr. LaRocco said that reflects the strength of these banks' relationships with customers.
But insurance is still in its infancy at most banks, and Mr. LaRocco pointed out that 15% of those in the survey planned to begin insurance programs next year.
One surprising finding was that a majority of those without programs said they had no plan to sell popular products like auto and life insurance. Mr. LaRocco said these decisions by individual banks do not throw into doubt the possibilities of insurance.
"They are going to wait for others to tiptoe into the waters," Mr. LaRocco said. "There was a period when banks were taking a look at whether to offer mutual funds. ... when customers begin to ask if a bank offers these services, I think more will get into it."