The convergence between banks and insurance has taken to the high seas.
Key Bank USA and Inamar Recreational Marine Insurance are now offering financial services with Francisco-based boats.com Inc., whose namesake Web site brings together boat and marine supply buyers and dealers. The site has added boatsbank.com, from Key Bank, and boatsinsurance.com, from Inamar.
John Relyea, vice president and director of Internet and e-commerce strategy for Key Bank, a unit of Cleveland-based KeyCorp, said, Consumers are going to the Internet in droves especially affluent consumers who buy boats and such a consumer wants a trusted adviser to look at his total financing needs when he goes to buy his boat.
Ken Landon, a senior vice president at Key Bank and president of Key Recreational Lending, said financing a boat is very much like a real estate transaction. There are title insurance requirements (which can also be met on the Web site), appraisals to get, and closing costs. The average boat loan is about $50,000 and about $3.7 billion in marine loans are made annually, Mr. Relyea said.
The boat loans are handled through Key Bank but are funded by a group of outside lenders. Mr. Landon said Key Bank is still looking for lenders to join the site.
The property and liability insurance for the boat will be handled online by Inamar, a unit of the specialty property-casualty insurer Ace USA of Philadelphia, which itself is a part of Bermudas Ace Group. Inamar is working with a pool of insurers to provide the coverage, including Zurich, Firemans Fund, Great American, and AIG.
Consumers and dealers can get quotes on insurance for a range of boat types and then click through to the Inamar site to apply. Though boat insurance is not required by law, about 70% to 75% of boat owners carry it, and most boat lenders require it, said Inamar president Robert D. Chapman.
Mr. Chapmans company works with specialty agents offline to sell marine insurance, but feels we need to provide different avenues for consumers to reach us.
The site, which is endorsed by the Marine Retailers Association of America, has 44,000 dealers signed up to list boats for sale. The two new sites went live Feb. 15, at the Miami International Boat Show.
Paul Rabe, president and chief operating officer of boats.com, which was established in 1999, said demand has already been strong and that expects the site to sell more than 7,000 loans totaling about $300 million this year. Mr. Relyea said that during last weeks five-day boat show alone, the site processed applications for $2 million worth of loans just at a terminal in the boats.com booth.
Ray Stahl, senior vice president of business development for Inamar, said the company is working to get more of its underwriting process online and to make the whole financing and insurance process easier for consumers.
Within the next four months, Mr. Stahl said, boatsbank.com and boatsinsurance.com plan to integrate their application processes so that consumers will only need to input information once to see financing options and insurance quotes. In addition, the two companies will allow consumers to make their loan and insurance payments together, in a single payment, he said.
Mr. Rabe said he expects boat dealers to be big users of the site, because they can go online with their customers and help them find financing right at the point of sale.
Mr. Chapman agreed that dealers will want to share this site with their customers, because if you can get the thing done all at once, the success of all the pieces is much higher.
Boats.com also plans to co-brand a used-boat auction site with eBay that is set to launch in the spring. The boatsbank.com financing options will be featured prominently on that site, both Key executives said.
