Bank of New York will launch a campaign in January to sell group and individual life and health insurance as well as 401(k) plans to small businesses.

Offering such products will help Bank of New York leverage its ties with these companies, said John Pugliese, executive vice president for retail banking.

"We have relationships with business owners, but we have yet to take advantage of that by talking to them about the business' insurance needs, like group health and group life," he said.

The push will start with direct mailings and ads in newspapers and business periodicals in the New York area.

A sales officer from the bank will visit the business owner, and depending on the client's needs, an expert in insurance or investments may be sent. Also, the investment expert might offer financial planning.

The bank is hiring investment and insurance specialists and financial planners for the campaign, in addition to small-business sales officers.

Bank of New York has already sold "a little bit" of group health and group life to small-business owners this year, Mr. Pugliese said. "The more I cross-sell to them, the more we solidify the relationship," he said. "The goal is to cross-sell as many investment and insurance products as possible."

Michael White, chairman and chief executive officer of Michael White Associates, a bank insurance consulting firm in Radnor, Pa., said small businesses have been underserved in group health and group life insurance. He cited a 1995 study by the life insurance industry group Limra International of Windsor, Conn., of 1,558 businesses with less than 100 employees. Fifty-five percent had no group health insurance, and 69% had no group life insurance. Limra will release a new study on the subject in early 2001.

Mr. White said banks should parlay their client bases by selling those lines to these companies.

"Truly large businesses with over 1,000 employees already have programs in place and are being called by so many vendors," he said. "But because the insurance industry historically has looked for volume, small businesses have been ignored. If Bank of New York has lots of small-business clients, this is a chance for them to take advantage of an underserved group and with it, strengthen its relationship with them."

It is a bank's relationship with small-business owners that gives it an advantage in offering group health insurance, said Carmen Effron, president of the C.F. Effron Co. consulting firm in Westport, Conn.

"The bank relationship is important to the small-business person," Ms. Effron said. "They have lines of credit, checking accounts, and perhaps other lines with the bank. So it's always going to be easier for a bank officer than an insurance agent to get an appointment with the small-business owner."

Bank of New York is the principal subsidiary of $75 billion-asset Bank of New York Co.

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