KeyCorp's insurance arm was close to signing an eastern mutual insurance company as a partner when negotiations fell through.
The sticking point: The insurer refused to discuss details of its pricing structures.
"We don't give it to our agents, so we won't give it to you" was the company's attitude, according to Roger E. Dunker, president of KeyCorp Insurance Management Group. He spoke last week in New York at the Banks and Insurance conference sponsored by Business Strategy Network.
Mr. Dunker said that such a response from insurers is unacceptable at a time that is ripe for banks and insurers to work together. He said his search for partners has led him to believe that many insurance executives are listening more to agents than to potential partners or even customers.
Other conference attendees also said insurance companies must begin focusing on customers, and noted that banks have a better record of responding to customers.
Mr. Dunker said KeyCorp's philosophy is to work with one insurance company as its primary partner. That gives the bank more clout in developing specific products and services tailored to KeyCorp's customers, he said.
Banks must develop differentiating products that will serve customer needs, Mr. Dunker said. Innovation is also a quality KeyCorp is looking for in an insurance partner, he said.
"You must have that vision of opportunity," he told attendees. "How can you develop a product that can actually be differentiated because we are a bank?"
Mr. Dunker said banks and insurers need to recognize each other's needs to forge lasting relationships. And he warned that banks will not be satisfied with just commission fees.
"I want to take a part of that revenue that you've had on the administration side and move it into the bank-as long as the OCC will allow it," he said.
Mr. Dunker said he is also looking to build profit or equity on top of fees. "What we're trying to teach bankers is that insurance is really asset management," Mr. Dunker said.
"The land beyond deposits and loans can dramatically build revenues," he said-but along the way skirmishes will erupt among competing products. Banks are still overcoming the departmental silos mentality, he said, but strong leadership will defeat the problem, he added.
"There are tremendous opportunities with banks seeking partnerships (with insurers) and vice versa," he said. But the obstacles have to be overcome by both sides, he said.
"We're in an environment where we're either going to be competitors or allies," Mr. Dunker said.