First Union Corp. has agreed to acquire an insurance agency that specializes in covering small and midsize businesses in the suburbs of Washington.
The Charlotte, N.C.-based banking company plans to buy Taylor & Clark Insurance Services Inc., a Fairfax, Va.-based agency with customers in northern Virginia, Maryland, and the District of Columbia. The bank did not disclose terms of the deal, which is expected to close Oct. 1.
The $140 billion-asset bank company acquired the agency to bolster its fledgling commercial insurance program in the Virginia market. Taylor & Clark, which employs 25 agents, is expected to complement First Union's corporate banking business, which serves small and midsize companies.
"You're going to see more of these types of acquisitions," said Michael White, an insurance consultant in Radnor, Pa. "Banks understand the vast needs of their business clients for insurance, but banks also recognize they need the expertise of an insurance professional."
Founded in 1969, Taylor & Clark generates about $3 million in annual revenues. About 50% comes from selling corporate property and casualty insurance, and 37% is derived from employee benefit plans. The agency said 13% of sales come from personal lines of insurance.
"They've got a pretty well-developed marketing and distribution strategy," said David de Gorter, senior vice president, managing director of First Union Insurance Group. "They've been in their market for nearly 30 years."
Mr. de Gorter said First Union plans to expand business insurance services beyond Taylor & Clark's current market through acquisitions but has "no timetable."
Unlike many banking companies, First Union, because of a "grandfather" clause in federal legislation, is not limited to operating its insurance agencies from small towns. (A recent U.S. Supreme Court ruling affirmed national banks' right to sell insurance through agencies in towns with fewer than 5,000 residents.)
First Union is aggressively marketing insurance products through a variety of pilot programs, including offering estate planning and a direct marketing campaign to sell term insurance.
"We're working on all fronts," Mr. de Gorter said. "Selling insurance is something we want to be a leader in."
Taylor and Clark declined to comment.