Michigan's two largest banking companies have bought small agencies specializing in property and casualty policies.

On April 9, Kalamazoo-based First of America Bank Corp. announced it had purchased the Huttenlocher Group, a family-owned agency in Waterford, Mich.

The next day, Comerica Inc., based in Detroit, said it had bought Fairlane Associates, Dearborn, Mich.

Both agencies have individuals and businesses as customers.

In buying property and casualty firms, the two banks are defying convention.

Though banks nationwide are expanding insurance marketing efforts in the wake of favorable state laws and court rulings, most of the attention has been focused on life insurance, which pays fatter commissions than other lines.

Executives with Comerica and First of America defended the purchases, though neither would disclose terms.

"Unlike life insurance, homeowner's and automobile insurance aren't discretionary for a consumer or a business," said R. William Shauman, executive vice president, trust and financial services for First of America.

"While these lines don't have the high margins of life insurance, they are an essential buy" for those who own houses or cars.

Mr. Shauman, whose bank has purchased two other insurance agencies in the past year, argues that most banks have their priorities backward: They should be focusing on property and casualty before marketing life insurance.

But Andrea Martin, president of Comerica Insurance Group, has a different reason for purchasing Fairlane, with its eight full-time agents.

After all, Ms. Martin's bank has made a serious effort in the past year to market life insurance through its purchases of two separate life insurance agencies.

In her case, the attraction of property and casualty insurance are the synergies between this business and the bank's small-business lending unit.

"We are one of the top 10 small-business lenders in the country, and this new insurance agency serves mostly small businesses," she said.

Kenneth Kehrer, a Princeton, N.J.-based bank insurance consultant, said both banks have minimized the risks in the property and casualty business by buying established agencies.

"These banks have leapfrogged over a lot of problems by buying established agencies that have their own insurance carriers and their book of business," he said.

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