If banks are granted powers to underwrite life insurance, National City Corp. chairman and chief executive officer David Daberko says, his company will be one of the first in line to buy a life insurance company.

Regulators haven't given banks the green light to make such acquisitions, but Mr. Daberko is optimistic. And when that day comes he'll be on the prowl for an insurer "with a large footprint" in his Cleveland- based company's market-Ohio, Pennsylvania, Indiana, and Kentucky.

"My bet is several banks will be prominent in this field," he said. "And I hope we will be one of the first two or three in the country to own a full-service life insurance company."

Mr. Daberko's remarks during a telephone interview Friday morning defy the common wisdom of insurance consultants and many presidents of bank- owned agencies. They suggest that while banks' legions of customers make them suited to distribute policies, manufacturing them is an entirely different ball game.

Moreover, banks such as Citicorp, Chase Manhattan Corp. and Norwest Corp., already have underwriting privileges thanks to a grandfathering clause in the national banking laws, but they have little or no presence in the business. Could there be something they know that Mr. Daberko does not?

"Why the banks that have been in this business have not been more aggressive, I'm not sure," he said. "Maybe it's a lot harder than we think. But I would be willing to bet and give odds that some regional or money- center banks will be fully engaged in the life business in the next couple of years."

He said National City, which has $32.1 billion of assets, is willing to cough up about $300 million to purchase a company with the hopes of generating about $45 million immediately to the bottom line. Then he would push his staff to produce 15% to 20% a year in revenue growth.

Assuming he's buying a company at book value, such an offer would garner him a $3 billion-asset insurance underwriter, estimates Lawrence Mayewski, an insurance analyst for A.M. Best Co. He called Mr. Daberko's revenue goals "aggressive."

"For banks, life insurance has been a tougher sell than they thought it would be," he said.

Shareholders of National City might not like Mr. Daberko's strategy, and might prefer him to acquire banks and other companies that achieve higher returns on equity, said Kenneth Kehrer, an insurance consultant in Princeton, N.J. "Why would you take any capital to underwrite insurance when you get a higher return from buying back your own stock or buying another bank?" Mr. Kehrer said.

But Mr. Daberko says demographic signals show he's on the right trail. Older baby boomers are reaching the age where they are thinking about retirement, and are investing for those years. And life insurance plays an integral part in a financial plan for someone approaching retirement.

Mr. Daberko estimates 25% of his four million customers fit that bill. And he thinks they are ripe for term and whole life insurance products that can be sold via branches or over the telephone.

And Mr. Daberko would rather keep assets in-house than give them away to insurers. Sure, he'll sell a few products by other companies to offer customers variety. "I want to see that customers get treated the way I want them to, and the only way I can assure that is to sell products I own," he said.

Many bankers say they want to test their sales capabilities before advancing to underwriting. But not Mr. Daberko. The process of underwriting is an expertise banks already have: sizing up risks and matching investments accordingly. "The selling is the greatest challenge, much more so than the underwriting," Mr. Daberko said.

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