Property and casualty insurance is getting more attention at First of America Bank Corp., which just bought another agency to sell the policies.

The Kalamazoo, Mich.-based bank announced Friday it acquired Elliot & Sons Insurance Agency/Michigan Benefit Plans-the fifth agency acquisition the $22 billion-asset banking company has made in two years.

Terms of the deal were not disclosed. Elliot & Sons, based in the Detroit suburb of Auburn Hills, will keep its name.

Elliot, which is licensed to work with more than 50 insurance companies, has four business lines: automobile coverage, personal and commercial property and casualty insurance, and employee benefit services. The agency plans on direct marketing to many of the bank's three million customers.

"We're really focusing on property and casualty because of the revenue flows. It's more predictable and stable than life," said R. William Shauman, a First of America executive vice president overseeing insurance sales.

"Some banks stay away from property and casualty; there are lower margins, but if you run it efficiently it's profitable," he added. "It's regularly recurring and it's mandatory. With life insurance, first you have to decide to buy it and nobody likes to think about dying."

First of America has been collecting a group of small insurance agencies to pick up expertise quickly.

The insurance agency's president, Raymond Elliot, has been in the business for 29 years. His company has a staff of 27 and 15,000 customers, including members of more than 50 professional associations that get affinity group rates. Cross-selling is his M.O.

"If we go in and write a factory for property and casualty, we also make every attempt to write their employee benefit program," Mr. Elliot said. "And, while we're there, get right down to writing a personal automobile and homeowners program for them."

Proponents of property and casualty insurance say it provides built-in long-term revenue, pointing to the renewal commissions that perennially follow the initial sale. The life insurance business is one of replacing customers with new sales every year.

"It's a much lesser commission (than life insurance) and it takes longer to build the business, but it can be profitable," said Rick O. Bowman, president of U.S. Bancorp Insurance, Portland, Ore.

Also, while the banks may not be underwriting the insurance, they are exposed to risks.

"You do worry about the losses. There are certain sales thresholds (that have to be reached)," Mr. Bowman said. "You're sharing in the profits, and that all goes to the bottom line." u

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