In advance of their pending merger, Chase Manhattan Corp. and Chemical Banking Corp. have chosen a Chemical executive to lead insurance sales at the new Chase.
Dennis R. Kosovac, president of Chemical Insurance Agency, has been tapped for the job, a Chemical spokesman confirmed.
The decision is hardly a surprise. Under Mr. Kosovac's leadership, Chemical has used an army of dedicated insurance specialists to build what may be the largest bank-managed life insurance operation in the country, with annual revenues of $6 million to $7 million.
Chase's operation, which relies largely on full-service brokers rather than dedicated agents to market insurance, generates about half the sales that Chemical does, according to sources.
"Chemical is arguably the most successful bank life insurance program in the country right now," said Kenneth Kehrer, a consultant in Princeton, N.J.
Chemical's insurance agency was launched two years ago in a joint venture with Bankmark, an insurance marketing subsidiary of Conseco Inc.
Revenue from the unit's life insurance sales has more than tripled in the past year, a source close to the company said.
And the banking company's sales force has doubled to about 80 during that period.
For the past three years, Chase has focused on selling life insurance through its 180 branch-based investment representatives. And on a smaller scale, last spring the company began selling insurance in its nonbank offices and through a telemarketing unit.
Revenue from Chase life insurance sales was estimated to be nearly $3 million this year, up 46% from 1994, according to a source familiar with the operation.
Though the life insurance business would be a relatively small slice of the new Chase, the merger would give the businesses more room to grow in the next few years, experts said.
"The opportunities for introducing insurance products into different market segments will be phenomenal" after the merger, said Valerie Jordan, an insurance consultant based in Belchertown, Mass. "They'll have an even stronger position to penetrate the middle market, and higher-income customers."
Ms. Jordan added that the two companies' differing approaches to marketing life insurance would probably coexist after the merger, at least in the short term, in order to broaden distribution as much as possible.
For insurance vendors, competition to get on the new Chase's short list should be fierce, some experts said.
Chemical has been selling life policies from U.S. Life Corp., while Chase has sold policies from American General Corp., ITT Hartford Life Insurance Cos., and American Mayflower Life Insurance Co.
Robert C. Plows, the senior vice president in charge of insurance products at Chase, would not discuss future strategies.
He did confirm that Chemical had hired the 80 insurance agents working for Bankmark and formally internalized the entire program on Dec. 20. The decision to do so had been announced earlier.
Mr. Plows said his role after the merger had yet to be determined.
Mr. Kosovac declined to be interviewed. In his new role, he's to report to Jack Stack, who is to be Chase's managing director for the direct financial services group after the merger is completed in early 1996.