Mellon Financial Corp. is counting on an industry veteran to lead its sales efforts in insurance.

Kenneth J. Schweiger recently joined the Pittsburgh banking company as a senior vice president and managing director of insurance distribution.

Mr. Schweiger, 51, who headed bank distribution for New England Annuities, a Boston-based subsidiary of Metropolitan Life Insurance Co., is no stranger to the bank channel. He brings to Mellon some 30 years' experience in the insurance industry.

In the new role, Mr. Schweiger is being asked to pull together Mellon's bid to sell a range of insurance products, including annuities, term-life, health, property and casualty and commercial lines. The banking company has expanded its presence in recent years by buying two agencies, Leng Insurance of Pittsburgh in February 1997 and Clair Odell Group, a property and casualty agency based in Plymouth Meeting, Pa., in June 1998.

Mr. Schweiger would only speak broadly about his plans for Mellon's insurance program.

"If you look at the learning curve of products," banks have progressed from fixed annuities, to mutual funds, to variable annuities, he said. "The next frontier has to be life insurance."

Mellon may expand its offerings of life products, Mr. Schweiger said. "I think there are life insurance product structures that are a better fit in a bank environment than others," he said.

For instance, many banks have focused their efforts on inexpensive term life insurance, he noted. But just offering the least expensive product available "undermines the bank relationship," he said.

"A bank in the [insurance] business has to say what value it can add to the process that the customer is not getting somewhere else," he said. Banks selling insurance products have counted too heavily on existing customer relationships, he said. "There's got to be other value added than that their customers trust them."

Insurance consultant Valerie Jordan said banks have to add products if they want to keep customers.

"They're looking at ways to expand their base so the relationship is not one but many layers deep," said Ms. Jordan, president of Jordan & Jordan in Belchertown, Mass. "Then it's harder [for the customer] to leave the relationship," she said.

Mr. Schweiger said that banks would do well to hire more insurance professionals. He would not confirm, however, than Mellon plans to do so. The company currently sells much of its insurance through several hundred licensed branch employees.

Mr. Schweiger, who joined Mellon in December, reports to Dan Tuccillo, senior vice president in charge of consumer financial services.

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