First Union Corp. began mailing offers for the Hartford's insurance this week to small-business customers in North Carolina, Maryland, Virginia, and Washington.

The bank's insurance agency will promote property-and-casualty and other coverage designed for businesses with sales of less than $5 million. The effort will be expanded by Jan. 1 to entrepreneurs in nine other states.

"Small business is an area that had been neglected by insurance agencies and carriers," said Tony Fenton, managing director of agencies for First Union Insurance Group.

First Union expects that 70% of its 160,000 small-business customers in the Middle Atlantic states states fit the profiles of businesses that need the Hartford's insurance products, Mr. Fenton said.

Banks' interest in insurance and providing financial services for small businesses has expanded in recent years, and First Union wants to benefit from the growth in both markets.

The Hartford, which sells insurance through many bank-affiliated agencies, has offered small-business products for decades but has had rapid growth in recent years, a company spokeswoman said.

First Union Insurance Group, the first bank-affiliated agency to offer the Hartford's small-business products, will sell the insurance using toll- free telephone numbers. Sales agents will offer price quotes within 15 minutes.

"They already had the products and the technology and ability to provide the direct response," said Clarkson McClean, First Union project manager for small-business insurance. "We put that together with our customer base to create this program."

First Union will sell standardized workers' compensation, commercial automobile, general and umbrella liability, commercial property, and package insurance, as well as customized products, such as specialized liability insurance for funeral home directors.

The Hartford, which will underwrite the insurance, formed a unit to handle the direct mail, response, and servicing of the bank insurance group's customers, including processing all claims.

Mr. McClean said the direct mail and telephone interaction is essential to allow First Union to serve thousands of customers in a large geographic market.

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