Dime Bancorp has begun selling automobile insurance through a partnership with a leading underwriter.

In August the New York savings bank company began offering auto policies underwritten by American International Group. Mailings sent then and this month told Dime customers that they could buy the AIG coverage by calling a toll-free number.

For Dime, auto insurance is a first step beyond the sale of life insurance and annuities.

"We want to have a menu of products that's more than just life," said Robert J. Mittel, the thrift company's director of insurance.

In addition to sending mailers, Dime puts brochures in its branches and prints an advertisement on ATM receipts touting the auto insurance offering.

Dime has sold AIG annuities for more than 10 years. Still, it considered many carriers before choosing AIG for auto insurance, Mr. Mittel said.

It didn't hurt that AIG coverage appealed to his own needs; he ended up buying one when he found it would save him $150.

(The insurer tells Dime customers that it can save them $100 to $200 annually against auto insurance averages, Mr. Brubaker said.)

AIG has become a major player in auto insurance. It ranked 17th in 1996, up from 37th in 1985, according to a new study by Conning & Co., a insurance research and consulting firm in Hartford, Conn.

AIG added direct sales and recommitted itself to the business, said Maryanne Godbout, a Conning consultant.

Direct-sale arrangements in auto insurance make sense for banks, she said. The bank gets a share of the commission, and even of the profits, in return for providing the insurance carrier with new customers.

Auto insurance is a commodity product, and providing it through a bank can be a convenience to customers if the rates are competitive, Ms. Godbout said.

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