After two years of "misfires," Cole Taylor Financial Group has devised a system for selling life insurance that it is happy with, said Richard S. White Jr., executive vice president of trust and investments.
The Wheeling, Ill.-based bank, which caters to small and midsize businesses, has conditioned its lending officers to bring along insurance specialists to their meetings with clients.
Convincing lenders to talk to their clients about the dreary topic of life insurance was no easy task, Mr. White told about 30 bankers and insurance sales executives at a Strategic Research Institute-sponsored conference here.
"Today, most people have no education on the insurance side, and if I take a look at the officers in my bank, I see the same pattern," Mr. White said. "They've never been exposed to a life agent."
Mr. White said the lending officers in his $2 billion-asset bank have become the key to getting life insurance to his customers. He has devised a system that trains them to unearth life insurance needs, and then to bring along one of the two insurance specialists the bank recently hired on their sales calls.
Employing specialists to take care of customers' insurance needs, rather than leaving the sales up to platform personnel, is a growing trend among bankers. While members of the platform staff remain a bank's main contact with its middle-market customers and are often used to sell mutual funds and annuities, they may not be well suited to hawking insurance.
The business is often very complicated to learn, and policies take a long time to sell.
"I believe in the overall success of the dedicated rep (program)," said Bradley Powell Jr. president of the institutional marketing group Jackson National Life Insurance Co., Lansing, Mich. "They can sell on a needs basis, and probably (make life insurance) a more profitable product in the bank."
Some institutions have had success using platform personnel to sell life insurance. Fidelity Federal Bank, Glendale, Calif., has achieved praise from banking peers for its platform program.
"One individual can serve the needs of customers," insisted Robert Condon, president of Fidelity Federal's brokerage subsidiary. "You're not shuffling the customer from one office to another."
Mr. White's strategy sounds logical enough, but it came to him after a series of missteps. When it began its program, working with Financial Network Investment Co., a third-party marketer based in Torrance, Calif., lending officers would refer customers to the platform personnel.
"We took a look at retail distribution-we were selling mutual funds and annuities-so life insurance seemed like a natural extension," Mr. White said.
But the retail sales staff found that mutual funds and annuities were far easier to sell than "this intangible thing called life insurance," Mr. White said, so referrals were wasted on them. And the retail staff rarely got referrals anyway, because the lending officers lacked faith in its ability to sell insurance, he said.
These days things are different at Cole Taylor, because the lenders are working with specialists. Indeed, the two that the bank hired were interviewed by the lending officers, Mr. White said.
"Right now, if we were to pull the program, our commercial lenders would be on me like a tent," he said.
Of course, only time will tell if Mr. White's new strategy will work. He acknowledged that the insurance division's earnings remain a "blip" on the bank's income statement. But he said Cole Taylor will consider insurance a serious contributor when it generates 10% to 15% of the bank's income-a goal he considers achievable.
"I think if banks don't get into selling life insurance, they're missing the boat," he said. "Some of us are out here being evangelists. Hopefully, our enthusiasm isn't misplaced."