Hibernia Corp.s largely commercial insurance agency is trying to diversify its revenue stream.
To bulk up in the employee benefits business, last month it brought over three specialists and their books of business from the Wright & Percy Insurance Inc. agency in Shreveport, La., plus four support people.
The Wright employees joined Hibernia on March 1; the move was announced last week.
Leslie Jacobs, the president of Hibernia Insurance Agency LLC, said she expects them to help it gain a foothold in north-central Louisiana and East Texas as well.
Hibernia Insurance, which operates under the service name Hibernia Rosenthal Insurance (the New Orleans banking company bought the Rosenthal Agency of Metairie, La., in mid-2000) specializes in coverage for the energy and marine industries and auto dealerships. It also sells personal and casualty insurance, such as homeowners and auto policies.
The employee benefits services that have been available through Hibernias agent force include group life, health and disability lines.
Ms. Jacobs said she had wanted to diversify her agencys offerings even before Hibernia bought it. The partnership with the bank has given us the opportunity to grow our homeowners and employee benefits lines, she said.
Over the past year the Hibernia Insurance agents have worked with Hibernia Banks business customers to build the employee benefit and homeowners lines, Ms. Jacobs said. The employee benefit lines were cross-sold to the banks business clients, and the homeowners lines cross-sold with Hibernias mortgage unit.
And on both sides, the strategy has borne fruit, according to Ms. Jacobs. Before we were bought by Hibernia, employee benefits services was about 5% of our business. Now its about 15%, she said.
She predicted that the benefits share will be bigger a year from now, as one of the Wright & Percy agents specializes in the employee benefits market. She declined, however, to give a percentage.
The homeowners side has also benefited from with the bank, Ms. Jacobs said. We quote more homeowners policies in a month than we did for the full year before we joined them, she said.
Erik Eisenstein, a bank and thrift analyst at Standard & Poors in New York, said diversification of the income stream makes good economic sense for Hibernias insurance division. Homeowners insurance is a good defense if we have an economic catastrophe and business lines suffer, he said.
But he did not see employee benefits as a protective diversification. Employee benefits is still business insurance, so its less defensive, he said.
Bank-insurance consultant Carmen Effron, on the other hand, said that diversification into employee benefits is a good choice for a banks insurance agency. It should be a crucial part of a banks offerings. It ties their customers closer to them, she said.
Hibernia Insurance has 105 employees and is the largest insurance agency in Louisiana. Hibernia Corp. has $16.7 billion of assets and 263 branches in Louisiana, Texas, and Mississippi.