CONCORD, Ohio - John Wepler has a chart above his desk with a list of the top 100 insurance agencies in the United States and their locations. If a bank owns one, a notation is made.

It's like keeping score at a ball game for Mr. Wepler, who is vice president of merger and acquisition services for Marsh, Berry Inc., a consulting company that brokers sales of agencies.

"Right now, seven of the top 100 agencies are owned by banks, but by the end of this year, that number will be 20. By the end of next year, it'll be 40," Mr. Wepler said.

Banks are buying insurance agencies in record numbers, and Marsh Berry, a 35-employee firm with a small office in this town 25 miles outside Cleveland, claims to have brokered more such deals than any company.

"We have 46 deals in progress, and 76% are bank-related," Mr. Wepler said. "We'll have at least one deal closing in the next week, another one by the end of June, and a third deal in July."

"They seem to have found a niche for themselves," said James Overholt, a senior consultant and manager of financial services programs for Milliman & Robertson, a Chicago consultant. "There are banks that believe the best way to get into the insurance industry is to buy an agency."

That must be music to Mr. Wepler's ears.

"For most banks, the thinking has shifted from if we acquire an agency to when we close our first insurance deal," Mr. Wepler said. "The sense of urgency has been compounded by active banks that target the largest and highest-quality insurance agencies, leaving those of lesser quality for banks that have been slow to enter the market.

"We believe the number of bank/agency transactions in 2000 will exceed the number of deals completed during the past three years combined."

Mr. Overholt stressed, however, that many agency acquisitions fail. An agency's production tends to drop after a bank buys it, he said.

Mr. Wepler is aware of that. Marsh Berry's own studies show that bank-owned agencies have lower revenues from all major lines of insurance than the average non-bank-owned agency. Their earnings before interest, taxes, depreciation, and amortization are 13.4% of revenues, against 19.5% for the average non-bank-owned agency, according to the studies.

"Banks make critical mistakes when they purchase insurance companies," Mr. Wepler said. "We've seen banks buy agencies because someone on their board owns the agency. That is not a reason to buy an insurance agency. A bank has to know why it's getting into the insurance industry before it finds a perfect candidate for acquisition."

Banks with solid strategies are succeeding, he said.

For the top 25% of bank-owned agencies, earnings before income, taxes, depreciation, and amortization are 29.3% of revenues on average, against 19.5% for non-bank-owned agencies.

"This is why we have an acquisition-strategy session with a client where we define the characteristics of a desirable candidate," Mr. Wepler said. "A bank needs to know the agency's size, markets, age of shareholders, historical growth, and lines of business. Then you create a list of candidates."

The best companies are not always for sale, Mr. Wepler noted.

"In most cases, the agencies banks should target are the ones that don't need to sell," he said. "The agencies that try to get bought are doing so for a reason. Banks have to entice the better agencies to buy and make it clear that it's going to be more than a takeover, it's a partnership."

In a deal announced May 31 and brokered by Marsh Berry, Hibernia Corp. said it would buy the Rosenthal Agency, an independent outfit with $90 million of premiums. The deal, which has yet to close, met some resistance from Rosenthal.

"We didn't want to sell," said Leslie Jacobs, the agency's president, who added that Hibernia made clear that it is serious about cross-selling insurance, as is Rosenthal.

"We look at it as a strategic merger."

A strategic alliance is what R.C. Knox & Co. in Hartford - the largest agency in Connecticut - was seeking when it was bought by People's Bank of Bridgeport, Conn., in July 1998.

Barbara Johnson, senior vice president for insurance services at People's, said her company hired Marsh Berry to assist in the search, which led it to home in on Knox.

"They helped us do a study on how to value an agency and what to look for in an agency," Ms. Johnson said.

Kenneth Kehrer, who is the president of Kenneth Kehrer Associates, a Princeton, N.J., consulting firm, pointed out that if a bank wants to buy an agency that is not overtly on the market, it will have to pay a premium.

"Banks are paying more than market for some insurance agencies, but if a bank makes the synergies work, then they are not overpaying," he said.

Mr. Kehrer added that "with a joint venture there is no capital outlay; the partner has to perform or it doesn't get paid, and it's easier for the bank to get out if it isn't working out," he said. "A disadvantage is you could potentially make less money in a joint venture. But all in all, it's less of a risk."

Mr. Wepler disagreed.

"The bank's hands are, in effect, tied when it comes to implementing necessary changes, setting strategies for growth, and gravitating toward a fully integrated financial services platform," he said.

He added that a bank in a joint venture usually does not have the time to focus on insurance, and thus fails to give the venture the support it needs.

Mr. Kehrer said that in Europe, where banks have participated in insurance for years, joint ventures are preferred to buyouts.

"The interesting thing to do is contrast the American experience with that of Europe, which, everyone would agree, is further along," he said. "Joint ventures have outnumbered acquisitions. There is no reason to rule out a joint venture."

One thing is certain: Banks are not ruling out agency acquisitions.

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