four years in the business.

Going into the black took longer than expected and came after the Detroit- based bank ditched the original plan to sell face-to-face to middle-income customers. With the change of heart, Comerica sliced its branch agent force from 48 to 15 and redirected the remaining, seasoned agents to the affluent and emerging-affluent market.

"I think that four years ago, those who were involved in this field thought it would be easier," said Andrea Martin, president of Comerica's insurance operation. "We started out a little too much trying to be all things to all people and trying to duplicate an agency system."

Though many banks once saw life insurance as an ideal first step into the insurance business, the bloom is off the rose. While the lure of selling life policies to underinsured middle-class Americans remains strong, many banks have stumbled badly in this business.

An example frequently cited is that of Fleet Financial Group. The Boston- based bank hired a seasoned insurance executive to build a wide-ranging program, signed on a flotilla of new workers, then abruptly shuttered the program. The process took about two years.

And over-all bank life insurance sales remain insignificant. In the past five years, banks have failed to garner even a single percentage point of U.S. life insurance sales, according to Limra International, a Windsor, Conn.-based insurance industry trade group. The latest study by the Association of Banks-in- Insurance estimated bank life insurance sales at $600 million in 1998, up from $500 million in 1997.

"The real failure of insurance programs at banks must rest with the bankers themselves," said Michael D. White, a Radnor, Pa.-based bank insurance consultant and director of the Financial Institutions Insurance Association. "They've never really tested life insurance."

Banks need to have more patience than Fleet did in building broad-based insurance programs, Mr. White said. First off, life insurance is famous for being a tough sell. And insurance sales mount slowly as revenues build from renewals, he said.

"You start effectively creating an annuity stream for the banks," Mr. White said.

Mr. White predicts that because life insurance generally has better margins than annuities, if banks were to capture just 7% of the over-all market, revenues would exceed those that come from banks' larger share of the annuity marketplace.

Achieving that 7% will take time. Mr. White confesses that banks have not budged from where they were in 1995.

Limra's Robert Baranoff expects banks to make inroads into life insurance sales but also believes any such gains are not near at hand. While many banks have not succeeded in middle-market sales, he thinks that banks that have the products and make the staff selling those products accountable have a good opportunity.

"I think the mere raising of the issue in non-threatening ways by the bank will help penetrate the underserved market to some extent," he said.

"I'm not sure that the banks can overcome these obstacles per se, but I believe they will make inroads nonetheless."

Kim Welch, the director of financial institutions at Hartford Life Insurance Co., a carrier that has relationships with 17 of the 25 largest banks in the business, believes banks are making headway with life insurance.

"What we're starting to see is that our bank programs are beginning to move the needle here at Hartford Life," she said.

From 1997 to 1998, sales of traditional life insurance - excluding credit life, single-premium life, and bank-owned life insurance - grew 100%, and sales are on track to grow 50% this year, Ms. Welch said. She would not disclose actual sales figures.

"Banks represent an enormous opportunity for us," Ms. Welch said. But she added the sales channel remained at an early stage of development.

Mr. White said that bankers who want to be serious about life insurance have to roll up their sleeves and fathom the mundane details of the business. Too often, he said, bankers have not done that.

"You just can't talk about this at the board room," Mr. White said. "Until it's a core business, nothing's going to change."

At Comerica, insurance is only now becoming an accepted part of the bank, said William J. Krause, managing director at Comerica Insurance Services.

There is no shortage of bank executives who say insurance is or will be a core

business.

Theodore A. Johnson, director of marketing for financial institutions at Limra, said many banks were particularly fond of term insurance, which remains a staple for every distribution channel.

Because term carries only a death benefit and no investment component, it is easier for customers to understand and cheaper for them to purchase.

"From what we've seen so far, term is a product that has sold more in a bank environment - it's a little more transaction-oriented and not as complex," Mr. Johnson said. The trend has been driven by a desire to do more direct- marketing sales as well as platform sales, Mr. Baranoff said.

Underwriters have clearly picked up on the trend and continue to develop simplified and inexpensive life products for the bank channel.

Hartford, for example, will soon introduce improved term life insurance for banks that will be even more streamlined, Ms. Welch said. The underwriter is trying to overcome the difficulty of bankers who are reluctant to ask personal health questions by handling all of the "part B" questions itself, she said.

But products like universal life, which pays competitive investment returns, have been gaining popularity in banks as with the industry as a whole.

Comerica is making a strong push to sell the product to its affluent and emerging-affluent marketplace.

Mr. Krause, who reports to Ms. Martin, said that even while Comerica moved from serving a middle market with few competitors to an affluent market with many, Comerica has an edge.

"Because of the relationship that has been established, it makes it a little warmer for us to go in and meet a business owner the first time around," he said.

With a redesigned strategy, Comerica remains committed to life insurance. The program is returning about 10% on revenues but Ms. Martin expects to double that over time.

"I still think it's a good business and I think banks should continue in it,'' she said. n

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