Insurance: B of A Flogging Life Policies Though Internet, by Mail, And

BankAmerica Corp. has launched a mass-marketing campaign, pitching life insurance through the mail, ATMs, and the Internet.

BankAmerica Insurance Agency on Thursday sold its first life insurance policy to a customer using the BankAmerica World Wide Web site.

And statement stuffers hawking term life insurance were sent to customers of the San Francisco-based bank last week - the third mailing in as many months.

Credit life insurance had been the insurance unit's bread and butter. But BankAmerica made a big foray into term life insurance this summer, and it's gearing up to roll out a disability insurance product for people over 65 this fall.

"We are really very much at the beginning and are hitting the targets," said Rex Morlan, chief operating officer of BankAmerica Insurance, which is based in San Diego. "We are doing it with a method consistent with BofA strategy; it's a low-cost effort."

One cheap strategy - putting ads for homeowner insurance on automated teller machine receipts - is expected to generate life insurance sales, too. Because consumers other than BankAmerica customers use its Versateller network, the bank is reaching a fresh audience.

Mr. Morlan said 10% of the people buying homeowner policies were drawn by ATM receipts. "Probably close to half of them were not BankAmerica customers," Mr. Morlan added.

BankAmerica is selling term life insurance policies underwritten by West Coast Life, Old Line Life, CNA Financial Corp., and Jackson National. The carriers are chipping in to pay for some advertising and marketing costs.

For more complicated products, such as variable and universal life insurance, 40 investment representatives in the bank's asset management group obtained licenses to sell policies to affluent customers.

But to reach retail prospects, insurance experts say direct marketing is the most cost-effective way to go.

"It gives prominence and visibility to products available through the banker," said Michael White, a bank insurance consultant in Radnor, Pa. "It's a global economy; a lot of business is done by long distance."

The insurance unit is an amalgam of the groups started 20-odd years ago at BankAmerica and at banks it acquired, including Security Pacific Bank and SeaFirst. It is housed within Bank America Community Development Bank, a state-chartered bank in San Francisco. BankAmerica Insurance, with 15 agents selling homeowner and term life insurance, is limiting itself to California for now.

Mr. Morlan said that within a year, homeowner insurance sales will be expanded to all eight of its Western states and life insurance will be sold in the 10 states where the bank has retail customers.

Mr. Morlan refused to disclose BankAmerica Insurance's revenues but said initial expenses are nil.

He explained because the insurance companies pay for the marketing, "anything we take in is going to be a profit." Commissions are shared by the bank and the underwriters.

"I think at some point we'll internalize this, but we want to prove it's a success," Mr. Morlan said.

He said combining the sales groups internally would ease cross- selling.

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