Bank and thrift insurance programs that flex their muscle in new directions are spotlighted in American Banker's third annual supplement on bank insurance marketing, "Tracking the Trendsetters."
Whether it's First Union Corp.'s push to sell insurance to commercial customers (see page 4A) or Chase Manhattan's desire to assemble what may be the broadest product array in the business (page 3A), banking companies with established insurance programs are clearly in the mood to try new approaches.
The upshot: 1997 has been a year of experimentation for many banking institutions, large and small.
"Institutions that once had a single initiative now have three," says Kenneth Kehrer, a Princeton, N.J.-based bank insurance consultant. "And banks that had no initiatives now have one. Some banks felt they had to do something, even if they weren't going to make much money."
Take First Chicago NBD Corp. In July, it unveiled an agreement to market auto and homeowner insurance underwritten by the Hartford through direct mail. The company intends to expand its insurance operations significantly.
A few days earlier, Winston-Salem, N.C.-based Wachovia Corp. had launched a major push into consumer insurance with plans to market life, disability, and long-term-care insurance to customers in North Carolina. The bank plans to take its sales effort to other southeastern states next year.
BankAmerica Corp., an established presence in insurance marketing, launched an automobile insurance sales effort early in the year. And St. Paul Federal, a Chicago thrift, has benefited from one of this year's hottest insurance products-the variable annuity (see page 10A).
In a clear signal that bank insurance marketing is going mainstream, the American Bankers Association created an affiliated trade group, the ABA Insurance Association, in October.
"The ABA recognizes that insurance is stepping out of the shadows and onto the main stage," says Dennis Kosovac, president of Chase Insurance Agency and chairman of the new trade group.
All this momentum has caused underwriters to up the ante in this business.
Last spring, the Hartford, a leading underwriter of annuities and insurance through banks, began pushing automobile insurance through mortgage companies and banks. Under the plan, the banks provide their customer lists, and the underwriters handle marketing and customer service.
In August, Metropolitan Life Insurance Co. announced it was planning to acquire Security First Group, an annuity underwriter and third-party marketer through banks.
And the Travelers Group, which has emerged as the quintessential broad- based financial services company, is pushing into the bank insurance channel (see page 5A).
But 1997 has seen setbacks and retreats as well.
In February, Wells Fargo & Co. decided to scrap a two-year-old program under which it marketed life and long-term-care policies by telephone to prospects outside the bank's traditional customer base.
And in October, Fleet Financial Group, in what is being interpreted as a partial retreat from the bank insurance business, decided to shutter its two-year-old insurance unit and integrate insurance sales into bank retail operations.
The Boston banking company also announced that it was ending its relationships with nine life insurance carriers so it can work with just one-the Travelers Group.
Such moves are inevitable in the grinding ground war known as bank insurance marketing.
"Banks are correct in believing that there is gold in them hills," says Chase's Mr. Kosovac. "But banks are learning what the appropriate pacing is as they go. On balance, banks are building momentum and will find the right pace, and those setbacks are examples of learning that will benefit all."
