Mellon Bank Corp. expects its bank and the large insurance agency it is acquiring to do a lot of cross-selling.
The Pittsburgh-based banking company plans to buy Clair Odell Agency Inc. of Plymouth Meeting, Pa., this month. After bankers and agents meet they will make some "joint sales calls," said Michael Malloy, vice president in charge of insurance.
"It will be a slow integration process," Mr. Malloy said. "Our strategy is just to look for opportunities."
Clair Odell, with $71 million in annual premiums, is a "creme de la creme agency" said Valerie Jordan, an insurance and banking consultant based in Belchertown, Mass., and the deal is "a heck of an opportunity" for the banking company.
Mellon quietly bought its first agency in February 1997. Fifty-year-old Leng Insurance of Pittsburgh was a small agency focusing on personal insurance lines including auto, homeowners, and life insurance. To sell Leng's products Mellon used direct mail and telemarketing efforts, Mr. Malloy said.
It also began selling insurance at branches through "video banker" hookups. Because agents cannot cover all Mellon's branches, these terminals allow customers to select a product then speak to a specialist in a centralized location.
(A spokesman declined to say whether the video program has proved to be a good way to sell insurance. The program will be reviewed, he said.)
With this experience under its belt Mellon began looking for a commercial agency about six months ago, Mr. Malloy said.
Clair, the 75th-largest independent agency in the United States by revenue, offers a wide range of products, including property and casualty, life, and employee benefits. The company has 90 employees.
It was a good fit with Mellon because of the product line and broker attitude, Mr. Malloy said. Like Mellon, the agency prefers to take a consultative approach with its customers, he said. The agency's focus on small and midsize businesses was also appealing, given Mellon's similar clients.
"It's just one more product that we have in our quiver to make them want to do business with Mellon," Mr. Malloy said.
A spokesman said Mellon will be developing referral systems to build on cross-selling opportunities.
Gerard Cassidy, an analyst with Tucker Anthony Inc., said Mellon has done well adding services, such as mutual funds, to its product lineup. And since few banks have bought insurance agencies, Mellon's move comes early in that game, he said.
But David Kaytes, managing vice president of First Manhattan Consulting Group, New York, disagreed. "It's kind of a late effort to demonstrate some attention to the insurance business," he said.
As leaders he cited BB&T Corp. and Norwest. They had the foresight to get into the business and had the time to integrate it and build it, Mr. Kaytes said.
