Huntington Bancshares became the latest bank to enter the life insurance sales game last week when it acquired the assets of an insurance agency in its hometown.
The Columbus-based bank bought Tice & Associates Agency Inc., and renamed it Huntington Life Insurance Agency Inc. Before the purchase, the $20.3 billion-asset Huntington sold credit insurance, disability coverage, and annuities. Now, it plans to offer term and single-premium life insurance and long-term care products underwritten by TransAmerica Corp., Aetna Inc., New England Life Insurance Co., and Midland Life Insurance Co.
Huntington said it was attracted to Tice because the agency has been selling corporate, closely held business and personal life insurance policies for years. It also provides services associated with employee benefits and other retirement plans and estate planning.
"You certainly need expertise in the insurance business to do that properly," said William K. Browning, president of Huntington Life Insurance Agency Inc. Mr. Browning had been running the bank's reinsurance business prior to the Tice purchase.
"We do perceive that insurance will be a major business line for the bank in the future," he said.
Through the agency acquisition, Huntington is set to gain three insurance professionals. The bank already has 200 personal bankers and 30 investment representatives licensed to sell insurance in Ohio.
Mr. Browning said he will hire nine career agents before yearend and plans to add 15 to 18 more agents over the course of next year. Within the next 30 days, Huntington insurance agents will be accessible via the Internet, Mr. Browning added.
To prepare for its foray into insurance, Huntington received in May an insurance license in Ohio - the second bank to do so in that state. Two affiliates of People's Bank of Marietta first got an insurance license in December, according to the Ohio Department of Insurance, but there are no applications pending from other banks.
In Ohio, no more than 50% of a bank-affiliated insurance agency's clients can be customers of the bank. Therefore, banks that want to sell insurance in the state are likely to buy an agency with an existing book of business rather than start one from scratch.
Huntington also has a insurance license in Michigan, but plans to focus on its home state. Competitors there are impressed with the inroads Huntington bankers are making to get into the insurance business.
"They've had a significant interest in getting it done in Ohio. They've been right on the cusp," said John Russell, a spokesman for Banc One Corp., Columbus.
While Huntington said it plans to cast a wide net across its retail channels, Banc One targets its affluent customers for life insurance sales. In August, Banc One bought a stake of an insurance agency, Succession Planning International, with 450 dedicated agents who get referrals from Banc One trust officers and private bankers.