In this, our fourth annual supplement on the business of selling insurance through banks, we have put the spotlight on an often ignored player - the customer.

While most bank insurance executives might proclaim that the customer is king, too many programs are still focused around selling products rather than serving the needs of myriad consumers.

You don't have to take Marketing 101 to know that customers come in all shapes and sizes, from computer-savvy yuppies who are willing to purchase insurance on the Web to computer-phobic elderly widows who actually frequent bank branches. And their insurance needs, as well as the ways in which they might purchase insurance, are often quite different.

'We do a significant amount of customer segmentation," says H. Wade Reece, the head of insurance at BB&T Corp., Winston-Salem, N.C., and one of banking's most ambitious insurance marketers. "But I would say that we aren't doing as much as we need to."

In the following pages, we profile different customer segments, describing what types of insurance and annuity products they are interested in and how they go about making purchases.

Five of the six articles focus on retail customers, from unmarried professionals to empty-nester couples, while the last puts the spotlight on the commercial customer, principally the small-business owner.

The commercial customer may well be the more lucrative for bank insurance operations, given that executives purchase insurance products for themselves and their families as well as their companies.

In preparing these stories, we recognize that many banks might take issue with the way we have chosen to segment the marketplace. And some banks, for the time being at least, don't think there's much to be gained by slicing and dicing a marketplace too finely.

For example, Andrea Martin, the insurance chief at Comerica, Detroit, tells us that there are two customer markets right now that are worth devoting special attention to: the affluent and the small-business owner.

Efforts by her bank to sell insurance to more specific customer segments - such as parents with new babies - have met with failure.

Still, she recognizes the importance of honing in on different parts of the customer base. "Segmentation is a good thing," she says.

Clearly, banks insurance executives have much more on their minds than customer segmentation, as our roundtable discussion of bank insurance issues attests. (See page 10A)

In the past year, banks across the country have continued to purchase independent agencies as one way to build a presence in the insurance business. Two panelists, Jack Cussen of Summit Bancorp, Princeton, N.J., and John Biasiello of Commerce Bancorp, Cherry Hill, N.J., represented such banks. And both men are enthusiastic about their efforts to date and their prospects.

But as consultant Ken Kehrer wondered aloud, are banks smart to be buying up what are essentially slow-growth businesses?

Banks are also wrestling with how to promote their insurance programs.

While our panelists seem to agree that mass-market advertising is not the way to go for most programs, some programs have evolved to the point that they are now worth taking to the airwaves. One panelist, Dennis R. Kosovac of Chase Manhattan, recently launched a series of television and newspaper ads designed to let residents in the New York area know that Chase Manhattan is ready to offer a full array of insurance products.

With financial modernization legislation looming, the buzz right now is how might banks enter the potentially large but perilous business of insurance underwriting. And our panelists discussed ways how banks might enter this business.

As for what the future holds for the bank insurance, opinions were mixed. While some view insurance as more of an add-on to help cement a bank's relationship with the customer, others are far more ambitious.

Chase Manhattan's Mr. Kosovac thinks that insurance revenues could comprise one-fifth of a bank company's top line in five years, provided that a bank is "able to integrate the technology, the underwriting, and the distribution (of insurance) into its core businesses."

There are many who hope that he knows from whence he speaks.

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