Summit Bancorp is using acquisitions to build one of the Northeast's largest bank insurance operations.

The Princeton, N.J., banking company plans to increase its annual insurance revenues seventeenfold in the next two years as it integrates recent purchases of two agencies, said Jack Cussen, Summit's insurance chief.

Last year the $31 billion-asset banking company generated $1.5 million of insurance revenues, excluding credit insurance. Next year it is projecting $25 million of revenues.

"Each month that goes by, I think we earn more credibility," said Mr. Cussen, a Summit senior vice president.

This year, Summit acquired Corporate Dynamics, a Mount Laurel, N.J., life and disability insurance agency that serves small businesses. Mr. Cussen predicted that Summit will generate $14.3 million of insurance revenues this year, largely as a result of the purchase.

And last week the banking company announced the acquisition of W.M. Ross & Co., a property and casualty agency based in Fairfield, N.J. It is expected to add $8 million of revenues, bringing Summit's projected 1999 insurance revenues to $25 million.

The two acquisitions are boosting the banking company's sales force. Summit had 20 life insurance agents before the deals. The Corporate Dynamics acquisition added 50 life, property, and casualty agents, and the Ross deal is to add 50 more.

No major changes are planned at W.M. Ross, which will retain its name and be a subsidiary of Summit Bank, Mr. Cussen said. "We certainly don't want to make bankers out of them," he said.

Mr. Cussen said he found Ross' history of serving associations and groups like limousine drivers and veterinarians especially attractive. That fits with Summit's strategy of segmenting its customer base.

"We've spent a lot of time segmenting our customers," Mr. Cussen said. "We've opened up the market so we're looking at the entrepreneurial and small-business as fertile ground for sales of products like key man insurance or business succession insurance."

Kenneth Kehrer, a Princeton, N.J., consultant, said, "I think customer segmentation is vitally important. The most successful banks are looking at how they deliver banking products - to what kind of customers through what channels."

Summit's success has been in serving the upscale customer segment well, he said.

It is planning to develop an Internet sales effort and a bank-branded health insurance product for small businesses, Mr. Cussen said.

Summit will continue to focus on ways to retain agents in order to maintain customer service. The banking company has a mentorship program to develop its agent force, Mr. Cussen said. "In order to grow, we've got to have good people, and we've got to retain them."

And it will continue to do more than pay lip service to customer service, he said. The banking company aggressively seeks customer opinions during and after the sales process through calls and surveys.

"Customers are pretty tough on us at all times," Mr. Cussen said. "Only if we provide good service will people come to us."

As more financial institutions actually take the steps to build quality distribution and service, Mr. Cussen predicted that success would come to bank insurance programs. "I think we are earning our spurs," he said. "It's going to take time to earn credibility."

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