American Heritage Life Insurance Co. wants to help banks tap their small-business customers' employees as insurance buyers.

The Ponte Vedra Beach, Fla., insurance company is rolling out a pilot program that sells products to small-business employees through banks. Insurance premiums are paid through payroll deductions.

Jack Burke, director of marketing at American Heritage, said the company's "workplace marketing" effort is well suited to bank distribution because most small companies use bank direct deposit services and would thus merely be adding a bank-provided service.

While most large insurance agencies have similar programs, American Heritage is marketing the service to banks with strong small-business relationships. Small businesses are often overlooked for services like payroll-deducted insurance premiums.

Observers said the strategy has strong potential.

"Some people in the insurance industry think that workplace marketing is a bigger marketing opportunity than bank sales," said Kenneth Kehrer, an insurance consultant in Princeton, N.J.

A bank with an existing small-business relationship is likely already to offer a direct deposit service, Mr. Burke said, so this service could piggyback on existing bank products.

"This ties a corporate account holder more closely to the bank," said Valerie Jordan, president at Jordan & Jordan, an insurance consultancy in Belchertown, Mass.

Other companies are starting to offer the payroll-deduction product, but Ms. Jordan said American Heritage is the first to market specifically to bank customers, giving it the potential for wide distribution.

American Heritage's menu of small-ticket insurance products should appeal to customers who are often overlooked by the large insurance companies, Mr. Burke said, citing a cancer insurance product and an annuity product that requires just a $5 deposit.

While the payroll-deduction product isn't new, it is increasingly popular, and the insurer is getting in at the beginning, Mr. Kehrer said.

"It has potential," Mr. Kehrer said. He suggested that an insurance company trying to peddle products through a bank urge it to sell the products to its own employees so that salespeople become personally familiar with the products and service.

Mr. Burke said some banks with which he had talked expressed interest in selling the product to their employees. No bank has begun marketing the payroll-deduction product to small businesses, however, he said.

While the success of the product remains to be seen, Mr. Kehrer sounded hopeful. "It certainly has a lot of promise," he said.

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