Mellon Bank Corp. is teaming up with Jackson National Life Insurance Co. to offer term life insurance.
The banking company is training about 170 branch employees to sell term insurance and expects to have 370 selling the Jackson SimpleLife term product within a year.
"It's an opportunity that's too good to miss," said Philip Kocher, the president of Mellon Insurance Agency.
Mellon chose Jackson National because of the popularity of its SimpleLife product and the Lansing, Mich., company's strong service record, Mr. Kocher said.
Jackson National stood out in service to customers calling its headquarters and to Mellon employees calling wholesalers based at the institutional marketing group in Atlanta.
"We could get someone on the phone quickly and easily," Mr. Kocher said.
Applications take about 15 minutes to complete at the branch, Mr. Kocher said. That speed is crucial to making the process economical, he said.
To give additional support to platform employees, five life salespeople will become internal wholesalers, he said.
Mellon's partnership with Jackson comes a year after its acquisition of Clair Odell Group, a Plymouth Meeting, Pa., property and casualty insurance agency.
"Using bankers to sell products is a competitive advantage that banks have," said Kenneth Kehrer, a Princeton, N.J., consultant. The salaried staff members already have relationships with customers, he said, and their other duties make the additional sale of a low-margin product such as term insurance possible.
Only direct mail and platform sales of term insurance are cost-effective for banks, he said.
Previously, the bank had sold minimal amounts of other life insurance policies offered by Hartford Life Insurance Co., First Colony Life Insurance Co., and Safeco Corp., Mr. Kocher said. Those products will remain on the menu, he said, but he felt it was important to build a significant term insurance sales effort.
Mellon customers have access to investment products through the Dreyfus Corp. subsidiary, which manages about $114 billion of mutual fund assets.
And the banking company wanted to round out its product offerings, Mr. Kocher said.
He would not reveal Mellon's term insurance sales objectives but said the business would be profitable.
"Clearly this method of delivery is very viable," said Bradley Powell, the president of Jackson National's institutional marketing group. But like Mr. Kocher he was silent on the initiative's sales potential.
Mr. Powell said he expects it will be a significant chunk of business based on Mellon's commitment to insurance.