Almost two years ago BancorpSouth, looking to build fee income from insurance, took what it considered to be a natural first step: It began building a life agency to first serve Tennessee, then Mississippi.

But the Tupelo, Miss.-based company soon discovered just how difficult it is to drum up sales.

"The life piece itself has been very slow developing," said Tom Murry, managing director of BancorpSouth Insurance Services. Customers are "not in any hurry (to buy) and we're trying to show that we're not in any hurry (to sell)."

So BancorpSouth is expanding into the more lucrative business of property/casualty insurance. The $5.5 billion-asset company made its first move in that direction with an announcement this month that it is buying the largest property/casualty agency in Mississippi, Stewart Sneed Hewes Group. The Gulfport agency is among the 75 largest in the country.

"We came in with a major play right out of the box," bank vice chairman Michael Weeks said.

BancorpSouth says it does not plan to abandon life insurance, and its life sales are increasing. Last year it sold $50 million in life insurance coverage, and it had sold $35 million in coverage by the first week of April.

But the company is not satisfied. Compared with its peers, BancorpSouth is "behind the bubble" in increasing fee income, Mr. Weeks said.

The deal for the property and casualty agency would go a long way toward increasing BancorpSouth's fee income, said Joseph Roberto, an analyst with Keefe, Bruyette & Woods Inc.

BancorpSouth has not released revenue information for its existing insurance operations or for Stewart Sneed, making it difficult to determine the agency's probable contribution to its fee income, Mr. Roberto said.

Stewart Sneed, a 100-year-old agency with 105 employees, had about $80 million in premiums last year. The agency will add about 12 employees over the next 10 months to serve customers of the bank in markets where the agency has not operated, said John Sneed, principal.

John Young, a Greensboro, N.C., consultant who examined the agencies BancorpSouth was considering buying, said Stewart Sneed has a mix of young and old managers and is well positioned to grow under the bank's ownership.

BancorpSouth continues to promote fee income and consultative cross- selling to its employees, said Aubrey B. Patterson, the chairman and CEO.

"It's important that all our people understand we're not just order takers," he said. The bank has to go beyond selling money "and that's what we're doing."

One way the bank has underscored insurance's importance is by recognizing top sellers with ads in local newspapers, Mr. Weeks said. And executives are talking differently about the product menu, he said.

"You won't hear us refer to ourselves as a bank very often because we see ourselves as a financial services company," Mr. Weeks said.

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