Bisys Group Inc. is targeting small to midsize banks with a plan to serve bank-owned life insurance programs.
The company wants to give banks with assets of up to $10 billion another option in contracting out the back-office operation, said Tony Pascotti, president of Bisys Insurance Services. "Bank-owned life insurance" is a bit of a misnomer, as most banks of this size are actually third-party sales agents.
Because setting up back-office operations of that kind is costly, most smaller banks with insurance operations outsource the work, Mr. Pascotti said. About a half-dozen companies, including Bisys, now compete for the business.
In a marketing letter mailed Monday, Bisys targeted 650 bank clients now using the Little Falls, N.J.-based company's Total Plus and Document Solutions systems.
Bisys hopes to leverage its business with existing clients into another profitable niche business, keeping track of sales of insurance products. Bisys will go after smaller banks, hoping to gain an economy of scale- building profits as the client base grows.
"You can go mouse hunting, or you can go elephant hunting. We are mouse hunting," Mr. Pascotti said.
The company expects annual net earnings of $3 million to $5 million within five years, Mr. Pascotti said. "We're looking for great things," he said.
The company has hired two independents who have done similar work: John Lander, a Boston life insurance specialist whose clients included Ameritech, Polaroid, Burger King, and Raytheon; and Joshua Gottlieb, a Cleveland-based consultant with several Fortune 500 clients, Mr. Pascotti said.
Bisys Group does image and financial information outsourcing for about 650 banks nationwide. It also does a range of back-office support for 5,000 financial services companies. Bisys Fund Services Inc., Columbus, Ohio, distributes mutual funds for about 40 banks.
"Bisys, over the past couple of years, has acquired a number of things," said J. Heywood E. Sloane, a consultant at Diversified Services Group Inc., Wayne, Pa. "If you're going to make administration your business, it makes sense to get into different areas."