Chase Manhattan Corp. has added a line of insurance to its growing product menu.
Chase, which offers life and property and casualty insurance, now sells commercial title insurance to its customers through a joint venture with four underwriters.
The venture, Madison Park Title Agency, is majority-owned by the banking company. "This was a logical complement to the business that we currently have," said Margaret Celic, a Chase vice president.
Indeed, lenders nationwide require commercial borrowers to buy title insurance for the amount borrowed, to protect the financial institution from losses related to challenges of a property's ownership. In addition, property owners may buy policies to protect themselves.
Ms. Celic said Chase started its title insurance effort by selling policies to its own commercial customers in New York State. But it plans to bring the program to other states and sell outside its customer base, she said. It is also considering selling retail title insurance, she said.
Chase expects more than $1 million of revenue from the program in its first year, Ms. Celic said.
Some banks have agencies that sell title insurance to retail customers, but apparently no big bank has a commercial insurance agency.
Theodore G. Werner, a vice president at Chicago Title Insurance Co., one of the four underwriters Chase is using, said the New York bank is "well positioned" to sell title insurance.
He said Chase's broad middle-market customer base gives it a strong leg up. But he cautioned that success would come only if it proved it could serve customers.
"If they are going to compete and do well in this marketplace, it's going to be on the basis of providing excellent service," Mr. Werner said.
Ms. Celic agreed. "We need to be best in class in terms of service, she said, and we need" underwriters' cooperation to achieve this.
Chase decided that one way to improve service was to align with more than one or two underwriters, Ms. Celic said. In addition to Chicago Title, it has contracted with First American Title Insurance Co.of New York, Lawyers Title Insurance, and Stewart Title Guaranty Co.
"We wanted to capitalize on industry expertise," she said. The four companies underwrite 80% of the nation's title insurance, according to Chase.
The venture will be supported by a small group of core people, Ms. Celic said.
In addition to loan customers, the bank wants to make insurance available to the customers it advises, Ms. Celic said.
Adding title insurance to its roster of products underscores Chase Manhattan's effort to broaden its insurance menu, said Kenneth Kehrer, a consultant based in Princeton, N.J.
"They have a strong presence in the middle market," he said, "and this is another way to sell more to them."