Disappointed with banks as a source of insurance revenues, Great West Life and Annuity Insurance Co. is channeling its promotional energies elsewhere.

It may be a sign that banks are not producing the new wave of insurance revenue for which many in the industry had hoped.

Great West has curtailed its marketing to 12 bank clients and is focusing instead on an arrangement it announced in April with the discount brokerage giant Charles Schwab & Co.

The insurer decided it did not have the resources to pursue bank sales while also being the exclusive insurance provider through Schwab's network.

"There are very few success stories distributing life insurance through banks," said Dennis Low, executive vice president of financial services at Denver-based Great West.

The $15 billion-asset company is going against the industry grain. Many insurers still view banks as their path to reversing a decade of declining sales. Insurance underwriters are jostling for position as regulators loosen restrictions on bank insurance sales.

Great West jettisoned its third-party marketing subsidiary, BancSource Insurance Services Inc. of Edina, Minn., which had been selling annuities through banks for two years. Marquette Bancshares of Minneapolis, Great West's lead bank client, took over BancSource's sales staff in January.

Mr. Low, who oversaw the department that targeted banks, is now concentrating on the Schwab program. The companies are spending $3 million on an advertising campaign in California, where their offering is still in a pilot phase.

San Francisco-based Schwab is selling three life insurance policies that, relying on low overhead and mass marketing, are intended to underprice competitors. The products are sold via telephone by salaried employees instead of by agents who demand commissions.

Mr. Low said Great West discussed a discount insurance program with several banks. But most wanted to stick to the traditional method of using agents. Great West didn't see how agents in banks, commanding commissions, would generate more profits than conventional independent agents.

Consultants say that despite the hoopla over banks' insurance potential major companies are not excited about the prospects.

"Insurance companies have found that a large bank insurance program in its first year will generate only 10% to 15% of what a bank investment program makes," said Kenneth Kehrer, a bank and insurance consultant in Princeton, N.J.

A typical bank investment program, which includes the sale of mutual funds and securities, earns $4.55 per retail household, Mr. Kehrer said.

Nevertheless, banks have a cache of customers that insurance companies covet. And banks treasure their customers' loyalty. "We don't count on it as much as they do," Mr. Low said, indicating that discount brokerages have lured bank customers with other types of products.

"We have to look for someone who agrees we have to change the way things are done," he said, as the Schwab alliance does.

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