Can General Electric Co. bring good things to insurance?
With the help of a nationwide ad campaign, GE is seeking to increase its stake in the crowded market for insurance and investment services. Along with selling through traditional insurance agents and brokers, the company plans to step up its efforts to sell through banks.
"We have a commitment to becoming a major player in the insurance and investment business," said David Mahder, chief marketing officer for GE Financial Assurance.
Two weeks ago, GE launched the ad push, tying insurance and investments to one of corporate America's best-known slogans: "We Bring Good Things to Life."
Ads on both network and cable television and in newspapers and national business magazines are touting GE's offerings of life insurance, supplemental health insurance, mutual funds, annuities, auto insurance, and long-term health care coverage.
Though GE has been in business for more than a century, it has only been selling insurance and investments for about six years. But in that time, it has bought itself a modest slice of the business, largely through acquisitions of such insurance companies as First Colony, Life of Virginia, and American Mayflower.
Today, GE-in addition to being one of the largest U.S. industrial companies, with more than $90 billion of annual revenues-is the 13th- largest life insurer, with annual premiums exceeding $5 billion.
In the past two years, it has been centralizing its major insurance subsidiaries under GE Financial Assurance, a division of GE Capital Services. Now that the integration is complete, Mr. Mahder said, the company can publicize its insurance business as never before.
Industry observers said they believe that General Electric, given its brand name and access to capital, will be able to leapfrog other insurers. "I would take them very seriously," said Andrew Giffin, an analyst at insurance consultant Tillinghast-Towers Perrin. "They have deep pockets and the ability to buy more companies."
Mr. Mahder declined to discuss GE Financial Assurance's acquisition plans. But he said it is interested in selling insurance and mutual fund products through as many distribution channels as possible. "There are such varying consumer preferences that we need to meet all of them," he said.
One such preference is buying insurance and investments through banks. On that score, GE has been gaining ground lately.
Last year, it generated $2.7 million of life insurance premiums through the bank channel, putting it behind companies such as American General, CNA, and Hartford Life Insurance, said Kenneth Kehrer, a bank insurance consultant.
He said that his analysis of annuity sales through banks in the second quarter revealed that GE was the sixth-largest player in fixed annuities, with $79 million of premiums, and 17th in variable annuities, with $45 million.