marketing firms to help them master the intricacies of selling life insurance. No single company dominates this pack of third-party marketers. But Bankmark, a unit of Conseco Inc., may have established the most impressive program to date. Working behind the scenes at Chemical Banking Corp., Bankmark has helped developed a broad-based sales program that by yearend will have 100 dedicated salespeople. The marketer, based in Morris Plains, N.J., has also helped Fleet Financial wade into insurance sales. The sales force Bankmark hired and has managed for Chemical, and which is to be turned over to the bank at yearend, sells a range of life insurance products to retail, corporate, and private banking customers. The program is expected to generate $6 million in profits by the end of this year, according to knowledgeable sources. That would make it arguably the most successful bank insurance sales programs in the country. "Mr. and Mrs. Middle America are being underserved by the career life insurance agency," says Robert Leonard, Bankmark's chairman and chief executive. "The bank channel is the logical place to distribute insurance to middle Americans." Bankmark works on a commision basis. Its services range from setting up sales systems - including hiring, training, and managing a sales force - to sales tracking, product relations, and due diligence in the selection of an insurance carrier and products. Vying with Bankmark are a handful of marketing companies, including Fimco; Milwaukee; Essex Corp., New York; Marketing One, Portland, Ore.; Laughlin Group of Cos., Beaverton, Ore.; and Talbot Financial Services, Albuquerque. Banking companies see selling life insurance as the next logical undertaking after mutual funds and annuities, and a way to generate large commissions on first year premiums. The commissions can be more than six times as big as those on annuities. But banking companies tried once before to enter this business, in the 1980s, and have been unable to come up with a successful formula. Third-party marketers can help banks that want to break into this new business but aren't sure how to go about it. "There's a lot of interest among bankers, but few know how to crack the code," says Michael White, president of a Radnor, Pa. consulting firm that bears his name. Meanwhile, internal pressure are making third-party marketers are eager to enter the life insurance business. Having helped banks start up mutual fund and annuity programs, marketers now are seeing a large portion of that business dry up as their clients take the programs in-house. Life insurance offers a way for third-party marketers to provide useful services in return for commissions from banks. Mr. Leonard agreed that life insurance will help to fill the gap left by declining revenues from mutual fund and annuity programs, though "not necessarily by design." Bankmark, which this year will derive $15 million, or 20% of its projected revenues, from life insurance sales, expects to derive 40% in 1996 and 1997 from as programs that are just getting started move into full gear. Today Bankmark has 150 salespeople dedicated to life insurance programs, 1,500 other salespeople sell annuities and mutual funds. However, many third-party marketing firms, having grown up focused on investment programs, are not prepared "to segue into the life insurance business," Mr. Leonard says. Life insurance sales require an entirely different sales approach than investment products, he adds. In addition, the referral systems that have grown up to support investment programs aren't sufficient to sell life insurance products. Referrals must come from all parts of the bank, since life insurance customers often are a different breed of customers than mutual fund customers. "That's been one of the biggest problems," said Kevin Crowe, chairman and chief executive officer of Essex Corp., a third-party marketing firm based in New York and a major competitor of Bankmark. "The life insurance customer probably won't be the customer who comes into the branch," Mr. Crowe says. "You need to reach the 75% to 80% of customers who never come into the bank. Most programs are in very early stages." The marketing companies "have a long way to go still," said John Larson, a consultant based in Eden Prairie, Minn. , who works with Marketing One. In the late 1980s, Mr. Larson initiated a life insurance program for upscale customers at First Bank Systems in Minneapolis. The banking company has since ended the program, he said. While some marketers, like Bankmark and Fimco, are creating broad-based programs aimed at selling a full range of life insurance to retail as well as upscale customers, other companies are seeking out market niches. Laughlin Group is working with three banks - Union Bank, CalFed, and Manufacturers and Traders Trust, based in Buffalo - to market life insurance through commercial lending departments. The third-party marketers contacted for this story said they knew little of what Bankmark was doing. The company, which entered the market two years ago, has taken a gradual, targeted approach - and has been reticent about its activities. "We purposely didn't grow life insurance quickly," Mr. Leonard said. "We stayed with our initial projects until we felt those projects were well on their way to success." Now, he said, "a couple of money-center banks including Chemical are on track to generate between $100 million and $200 million in (insurance) revenues in the next 12 to 14 months. Handling the Chemical account for Bankmark is Thomas R. Burnham, a 20- year veteran of the life insurance industry. He works closely with Dennis Kosovac, the head of Chemical's insurance unit. Chemical is Bankmark's biggest client, followed by Fleet Financial Corp. Both declined to be interviewed for this article, citing their pending mergers. This spring Bankmark began actively soliciting new contracts. It is now in talks with three banks, Mr. Leonard says. For the long term, "we're not looking for hundreds of relationships," but for about 15 banking clients - "partners," as he puts it - in markets across the country. Bankmark, which has 40 bank clients for investment services, already has some kind of insurance initiative with eight of them. By the end of 1996, several of the programs set up by Bankmark will be generating $100 to $200 million each in sales, Mr. Leonard said. Part of what makes a program successful is advanced technology to contain back-office costs and to make selling easier. Chemical has a sophisticated system for insurance agents that generates leads. The plan is to have the system generate referrals from all parts of the bank, said Kenneth Kehrer, a Princeton, N.J.-based consultant. Bankmark is in the processing of developing a system that would allow sales agents to enter customer information directly into a computer, instead of taking a paper application, and then send the electronic document to the underwriter. Collective Bank, based in Upper Montclair, N.J., recently signed on with Bankmark. Hiring it to run the bank's program "lets us get up and running faster with skilled people," said Robert Pierson, president of Collective Financial Services, a brokerage unit. "When you introduce one of your customers to a third-party marketer, you have the same feeling that a father has when he sees his teenage daughter going down the walk with a teenage boy," Mr. Pierson says. "Bankmark provided the level of comfort we were looking for."

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