Huntington Bancshares Inc. of Columbus, Ohio, plans to extend its insurance operations into three largely untapped states in its territory: Michigan, Kentucky, and West Virginia, according to the new head of its insurance business.
"We've got some huge growth opportunities in just expanding in our own footprint," said Pete Dunlap, who was promoted to president of Huntington Insurance last month.
This is a pivotal time for Huntington's insurance business, which was relatively small until Huntington bought Sky Financial Group of Bowling Green, Ohio, in mid-2007.
In the first half of 2007, Huntington's insurance brokerage revenue was $6.8 million. At yearend it was $37.7 million, according to Michael White Associates of Radnor, Pa.
The acquisition catapulted Huntington from 45th place to 18th among bank holding companies in insurance brokerage revenue, the consulting firm said.
Huntington has acquired a number of insurance agencies, as had Sky. But Mr. Dunlap, who is taking the reins at Huntington Insurance in the midst of a soft market for property/casualty insurance, said the company does not plan to buy its way into new markets.
"We are really focused right now on organic growth," he said. "We can hire agents to join our agency and connect folks to our existing infrastructure."
Huntington's strong insurance operation in Toledo, Ohio, could be a launching pad for operations in nearby Michigan, he said.
He said he wants "better integration" between the 24 Huntington insurance offices and the banking operation. The goal is to get the insurance sales reps "engaged" with a range of units, from commercial banking to automobile leasing to private banking.
"There are a lot of synergies between the insurance business and every business the bank is in," he said. "Every offer the bank makes should come with an insurance product, as simple as identity theft protection to a full-blown commercial plan."
Another example could be offering employee benefits to a commercial customer who has a liability policy, Mr. Dunlap said.
Michael White, who heads the consulting firm, said that with premiums down roughly 10% in the current soft cycle, bank-owned insurance agencies "are saying, 'Hey, we've got to get better at this cross-selling.' "
Buying agencies would be another way to ease the revenue pressure created by lower premiums, but many banks are guarding their precious capital, Mr. White said.
"Others will recognize that this is a good time to be buying an agency" because asking prices are low, he said.
Mr. Dunlap said one of his priorities is to hold on to Huntington Insurance's customers. "We want to make sure that we retain business. And that is a challenge in today's market, where people are shopping and looking around."
Another one will be replacing the owners and principals of Huntington's many acquired agencies as they approach retirement, he said.
Before his promotion Mr. Dunlap was senior vice president and national sales manager of Huntington Investment Co., Huntington Bancshares' broker-dealer subsidiary. He has also served as regional sales manager for Huntington's southern Ohio and Kentucky region, and did a stint in the bank's insurance services unit. He has also worked at MetLife and Commercial Union Insurance Co., now known as Aviva PLC.
Mr. Dunlap oversees 400 employees, including 75 at Huntington Insurance's Bowling Green, Ohio, headquarters. He succeeded Jerry Batt, who had run Sky Insurance, which became Huntington Insurance.
Huntington, a $55 billion-asset bank holding company, began offering insurance 12 years ago. Those original products, including mortgage and title insurance, account for 15% of current sales, Mr. Dunlap said.
He said its biggest lines are commercial property/casualty and employee benefits.