Gearing up for a growth push in its insurance group, Centura Banks Inc. is changing its tack in its management of the business.
Two years ago the Rocky Mount, N.C., banking company put its insurance agency subsidiary in the hands of an insurance expert with no banking experience. Now it has given the job to a banker with little insurance experience.
James N. Ashby took over as chief executive officer of Centura Insurance Services on Feb. 29 after spending 10 years at Winston-Salem, N.C.-based BB&T Corp. At BB&T he was director of marketing and sales development.
Mr. Ashby succeeds Charles L. Frederick, an executive in Centura's business banking group who ran the insurance unit on an interim basis after the departure of R. Patrick LaVoie in December 1998.
Mr. LaVoie, who ran an insurance agency in Maine for more than 10 years before joining Centura, held the Centura job less than a year.
The banking company said it is ready to throw some weight behind insurance marketing after having problems early on, said Kel Landis 3d, Centura's president and Mr. Ashby's boss.
"Insurance is a product or service all our customers need," Mr. Landis said. "We spent the last three years building the fulfillment capabilities of our insurance operation and the infrastructure to deliver it. Now we really want to move it forward with promotional and sales effort."
Centura is ambitious: Within three years it wants to nearly double the percentage of bank customers buying insurance from it, to about 5%, Mr. Landis said. Revenues from insurance sales were about $9 million last year, up from $8.4 million in 1998.
The strategy makes sense, said Dan Streiff, a vice president at the insurance consulting firm Marsh Berry & Co. in Concord, Ohio. BB&T has been very successful in getting its insurance agents to work with its bankers, he said, and hiring Mr. Ashby lets Centura complement its agency with marketing strength.
At BB&T, Mr. Ashby worked on integrating the growing insurance business into the bank's product line by training bankers to refer customers to insurance agents, and he has similar plans for Centura.
"It's a trust and confidence issue," Mr. Ashby said. "Once bankers believe the person they're referring to can help their customers; the rest is easy."
Centura Insurance has used acquisitions to grow: In 1998 it bought Raleigh, N.C.-based Moore & Johnson Agency Inc., and in 1997 it bought the agency Betts & Co. of Rocky Mount. Mr. Ashby said he would consider further acquisitions but that he has no prospects in mind.
Centura will have to compete with BB&T, which has aggressively pursued acquisitions during the past nine years. With 916 licensed agents and $78.3 million of 1999 insurance revenue, BB&T has a much larger program than Centura's.
"BB&T has more than likely gotten the first pick of the litter in the towns in which they operate," said Jeff Davis, an equities analyst at J.C. Bradford in Nashville.
Mr. Ashby said that while he lacks insurance experience, he has a seasoned second-in-command in sales manager Reid Rhodes, who helped found Centura Insurance in 1994.
Centura is not ruling out acquiring an insurance underwriter but currently has no plan to do so, Mr. Ashby said.
BB&T named Richard T. Ward, a marketing services manager, to succeed Mr. Ashby.