Despite a plunge in revenue, the makeover at Comerica Insurance Services is going exactly as planned, according to its top executive.
The Detroit insurance arm of Comerica Inc. of Dallas took in $10.4 million of insurance brokerage fee income last year, including $3.1 million in the first quarter, according to the Michael White-Symetra Bank Holding Company Fee Income Report. This year first-quarter insurance fee income fell to $1.8 million, according to the report.
But Steven Turtz, a vice president and the national sales director for Comerica Insurance, attributed the drop to the January sale of its benefits consulting unit, Comerica's Professional Life Underwriters, which targeted independent insurance agents and financial planners.
The sale lowered the insurance arm's total revenue by as much as a quarter, Mr. Turtz said. Allowing for that loss, "I'd say we're actually up quite a bit this year."
He also said that Comerica Insurance is on track to reach its goal of tripling its revenue — a goal he announced after joining Comerica in July of last year from Wells Fargo Insurance.
At that time Mr. Turtz said that the increase could be achieved in two-and-a-half years.
"I think we are absolutely on plan," he said. "We've taken a great first step."
Comerica Insurance's efforts center on expanding its insurance sales outside Michigan, where they are strongest. He said that the company plans to to expand its operations, particularly in markets such as Texas, California, Arizona, and Florida where its parent bank is working to develop a strong presence.
Mr. Turtz said the business had thin operations outside of Michigan when he arrived. At that time Comerica Insurance had only one dedicated insurance employee outside the state.
Since then, Comerica Insurance has brought aboard four "regional insurance consultants," insurance veterans who work with the parent company's brokers, planners, and others to meet clients' insurance needs.
Comerica Insurance has also added a new business development officer and a sales coordinator for markets outside Michigan, Mr. Turtz said.
"We want to make sure that all the different markets in our footprint have full penetration of insurance products," Mr. Turtz said.
Within the last year Comerica has also partnered with three outside firms to provide that full penetration, he said.
The company partnered with Atlass Insurance Group, a property/casualty insurer based in Fort Lauderdale, provides policies for customers in Florida. It specializes in providing insurance for yachting, aviation, luxury residential properties and businesses.
Wm. Rigg Co., a Fort Worth firm that Hub International Ltd. of Chicago bought last month, provides property/casualty insurance to customers in Texas, Arizona, and California.
A.E. Mourad Agency Inc., a Madison Heights, Mich., employee benefits insurance agency, is providing access to its middle-market programs to Comerica Insurance clients in that state.
Mr. Turtz said Professional Life Underwriters was sold because it did not focus on Comerica Insurance's target customers: middle-market businesses and their executives.
"They were really a bit disconnected from our strategy," he said. "We wanted to focus on Comerica customers."
Comerica has shifted its view of insurance and now considers it a core product, Mr. Turtz said.
That means, for instance, that the company has been training its lending officers to understand the insurance it can offer as a complementary product to their customers, he said.
This also means that Comerica's private bankers and others are getting incentives to include insurance as an option to consider for customers.
He described an effort to put Comerica's bankers, who he called "our internal customer," at the center of the insurance sales equation.
In the past bankers have been on the sidelines as far as insurance sales were concerned, Mr. Turtz said. However, "once they have a comfort level, the introduction to their customer seems to be very warm."
Comerica's first-quarter insurance fee revenue put it in the 39th percentile among bank holding companies with at least $10 billion of assets, according to the White-Symetra report.
The company generated $1.3 million of fee income from annuity sales, putting it in the 36th percentile in that category.
Michael White, the head of Michael White Associates LLC, the Radnor, Pa., consulting firm that compiled the report, said in an interview that tripling insurance revenue is a very feasible goal for Comerica, particularly if its insurance business targets large and small companies and wealthy individuals.
"I'm sure" Mr. Turtz is "hoping to write some good-size tickets providing large amounts of insurance," Mr. White said.
An example of a "big ticket" would be a policy covering an executive's buyout of a deceased partner's stake in a business, Mr. White said. That sort of policy can generate annual premiums in the "high four figures and into the five-figures."
