It’s been a long, tough road, but banks are finally starting to see appreciable increases in commissions from their sales of life and health insurance products.

Banks’ life and health insurance commission revenues rose 184% between 1997 and 1999, according to a study by the bank-insurance consultant Kenneth Kehrer Associates and LIMRA International, a life insurance statistical research firm in Hartford, Conn.

Kenneth Kehrer, president and chief executive officer of the Princeton, N.J., consulting firm that bears his name, said most distribution methods used by banks have made considerable progress. “Whether they use advanced agents, retail agents or financial consultants, business has improved over the last two years,” he said.

Results of the 43-bank study were released last week and show that most of the increase came from advanced agents, who continue to be the top sellers.

Advanced agents sell life insurance to trust and business customers and are generally based in a bank’s estate planning and business banking areas. On average they produced $130,593 a year in commission revenue for the banking enterprise, 2.7 times the productivity of bank retail insurance agents.

“Generally, wealthier people are receptive to working through needs with an agent and buying something,” Mr. Kehrer said.

Gross commission per advanced agent rose nearly 10%, to $130,593. Household revenue penetration, or what a bank takes in per customer household, soared. Advanced agents produced $1.79 in revenue per bank customer household in 1999, against 80 cents in 1997.

One reason is simple: Banks have been recruiting advanced agents. “It’s been successful, so banks have hired more of them,” Mr. Kehrer said.

Matt Riebel, president of Nationwide Financial Distributors Agency in Columbus, Ohio, said bank salespeople’s better know-how deserves a lot of the credit for the sales gains overall and that banks and insurance companies deserve credit for committing themselves to this market.

Andrea Martin, president of Comerica Insurance Group in Detroit, a Comerica Bank subsidiary that sells life insurance as well as disability and long-term-care to high-net-worth and business clients, said the complexity of this type of selling explains why advanced agents are best at it.

“In some cases, we have the attorney, accountant, financial advisers, and our advanced agents sitting at the table. You need someone well-versed, dedicated full-time to this, to make it work,” Ms. Martin said.

Retail agents — those based at a bank-owned agency or at a branch — doubled their productivity.

The average agent in this category produced $48,964 in gross commissions, versus $28,655 two years earlier. Their household revenue penetration rose to 35 cents, from 26 cents.

Mr. Kehrer said bank retail agents are like the old “kitchen table” insurance agents — they target branch banking customers and as a rule sell policies of lower face value.

“Banks have pared back the number of retail agents they have,” he said. “They held on to the most productive ones and got rid of the rest.”

Financial consultants — bank-employed stock brokers who sell mutual funds, stocks, annuities, and life and health insurance — also sold more life and health insurance than they did two years ago. The average such agent doubled household insurance revenue penetration, to 36 cents, and had annual gross premiums of $8,379, up from $2,500.

The one category of bank-based insurance seller that did not do well, Mr. Kehrer said, was that of licensed banker. Banks have been getting these individuals — primarily bankers who sell mutual funds and annuities part-time — to sell life and health insurance as well.

Their average revenue penetration was 26 cents, versus 64 cents two years earlier, and agent productivity slipped to $779, from $1,685. But Mr. Kehrer said banks that have used licensed bankers for a longer period of time have succeeded.

“A few banks have added licensed bankers, and they’re dragging the numbers down,” he said.

Direct response has not been so hot either. On average banks made 17 cents per household from direct response sales programs, against 35 cents two years ago.

“This could have to do with the fact that the Internet isn’t quite there yet,” Mr. Kehrer said.

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