Four years ago, Dennis R. Kosovac was a rising retail banking executive at Chemical Banking Corp. when his supervisors tapped him to oversee the bank's fledgling insurance operation.

"I thought I was being punished," recalls Mr. Kosovac half-jokingly. "I had been around long enough to know that insurance was a good idea at banks, but something of an afterthought."

But in time, Mr. Kosovac, who became president of Chase Manhattan Corp.'s insurance program following last year's merger of Chase and Chemical, turned a retail banking backwater into one of the largest and most multi-faceted bank insurance programs in the country.

Chase Insurance Agency offers a wide range of insurance-including whole and term life and property and casualty-to individuals and businesses throughout the New York area. The sales network is also broad, ranging from telemarketers to branch workers and professional life agents.

That's a far cry from the scene at Citicorp, Chase's main New York banking rival, which offers credit insurance and annuities but has shied away from consumer insurance lines for the time being.

Chase's insurance business has grown from a $10 million-in-sales operation four years ago to one projected to generate $120 million this year.

Half of that revenue comes from noncredit policies. These numbers place Chase among a small group of banks, including Norwest Corp., First Union Corp., and Banc One Corp., that are generating serious money in the insurance business.

"Chase's main advantage is that it is much closer than other banks in developing the European bancassurance model, which is closely integrating insurance with the other offerings of the bank," says Kenneth Kehrer, a Princeton, N.J.-based bank insurance consultant.

Yet for all of Chase's success in the realm of bank insurance programs, Mr. Kosovac knows the program has a long way to go. A program that generates tens of millions of dollars of revenues is still almost invisible when viewed in the context of Chase's retail baking products such as credit cards, checking accounts, and home equity loans.

Walk into a typical Chase branch and you'd be hard-pressed to find any evidence that the bank offers insurance. While investment counselors are often on-site, the bank's 100 dedicated life insurance agents are spread so thin that they can only set up shop twice a week at most branches. The rest of the time, an inquiring customer has to settle for a business card of an insurance counselor.

Marketing has been limited to targeted direct mail and an occasional promotional screen on an ATM machine. Insurance isn't mentioned in any of Chase's print and broadcast advertising in the New York region.

Mr. Kosovac concedes that many Chase customers aren't aware that Chase offers insurance. But that's because the program hasn't been broad enough to promote aggressively, he says.

"Until you have a comprehensive offering, it's a waste of time to do much marketing," he said. "Right now, we are marketing for specific customers, but we haven't positioned ourselves to accept a broad range of customers needs.

"Next year will be a turning point, a year that will be able to say, "yes, we can do that,'" he said.

Mr. Kosovac's assertion is backed by a slew of initiatives designed to take Chase's program to the next level.

By the end of next year, Chase expects to push the number of branch employees capable of selling insurance policies to almost 1,500, from the present 300.

And the bank is working to upgrade the skills of its 100 dedicated life agents so they can begin selling a wide complement of health, disability, and small-group insurance.

But Chase is also pushing into commercial property and casualty insurance and many employee benefits services-products that the bank can cross-sell to its corporate banking clientele.

In October, Mr. Kosovac announced an alliance with USI Holdings Inc., a leading broker of commercial insurance and employee benefits services. Under the alliance, Chase will focus on its 15,000 middle-market commercial customers, which have annual sales ranging from $5 million to $500 million.

"We are targeting long-standing commercial customers of the bank," said Mr. Kosovac. "Some of those relationships go back over a century."

Chase's decision to partner with another firm is atypical of the bank's strategy of building programs in-house as a way of, as Mr. Kosovac puts it, "controlling the customer service relationship."

But in this case, the task at hand called for outside experts, said Mr. Kehrer, the consultant.

"Lines of insurance sold to commercial companies are very arcane," said Mr. Kehrer. "The needs of the trucking industry are different than the needs of food service. That sort of rules out starting the business from scratch."

Adds Mr. Kosovac,"We're pragmatic and realistic. If there is an opportunity to learn what we don't know, we will do it. But we wouldn't do that to ensure that service levels, confidentiality, and performance standards are met.

"We haven't blindly handed our customers over. The agreements around the alliance are clear about service quality," he said.

For the future, Mr. Kosovac is shooting for 30%-a-year revenue growth in the insurance operations, which he views as sustainable.

"The biggest issue we have is getting a share of customer mind when it comes to banking getting in this business," he said.

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