Safeco Corp. wants more banks to sell its insurance products, says Boh Dickey, president and chief operating officer of the Seattle-based insurer.
Though the insurer sells its products through independent agents and vies for space with other underwriters, Mr. Dickey said he thinks Safeco's menu is attractive enough to win out.
Safeco sells variable annuities, fixed annuities, and equity index annuity products through about 50 banking companies, among them Washington Mutual Inc., Bank of America Corp., and Mellon Financial Corp.
But there's room for growth, Mr. Dickey said.
"We would like to be able to add one more large bank," he said. The company is also likely to seek relationships with small regional banks, he added.
Safeco conducts almost all bank sales through Talbot Financial Services, a general agency it acquired in 1993. Talbot still offers lines of insurance to clients from insurers other than Safeco, so the insurer is jockeying with other underwriters for shelf space.
"We'll take our chances," Mr. Dickey said, asserting that Safeco's strong relationship with independent agents and its superior products help boost sales. "We're going to win out if we have the best products."
Safeco is not the first insurance company to try to link independent agents with banks, said Kenneth Kehrer, president of Kenneth Kehrer Associates in Princeton, N.J., a research and consulting firm specializing in bank distribution of investments and insurance.
"It's a challenge, and so far we have not seen any success stories," Mr. Kehrer said.
Because independent agents are not their employees, the insurance company cannot require them to sell their products in a particular way, he said.
"The independent agent might think he knows better - he doesn't have to listen to Safeco," Mr. Kehrer said. "Independent agents don't always do what insurance companies want them to do."
David Weymouth, president of Talbot Financial in Albuquerque, N.M., said the company had $2 billion in sales and net revenue of $72 million last year.
"Banks are a very successful channel for us. We make over half of our earnings helping financial institutions sell investments," Mr. Weymouth said.
Talbot also sells products from Keyport Life Insurance Co. and Transamerica Corp. through the bank channel, Mr. Kehrer said.
Talbot has found a big demand from smaller banks that don't have the resources to create their own investment product menus. Of the 50 institutions the agency works with, about half have assets of less than $2 billion, Mr. Weymouth said.
Safeco's Mr. Dickey said he sees potential to expand the products sold through banks. Insurers have succeeded in selling annuities through banks, he said, but haven't figured out how to sell property and casualty products through that channel.
"We have gone down that road several times and have yet to succeed. If we could find a way, we'd be very pleased," Mr. Dickey said. "But if you're looking for this financial supermarket where people stop in and buy auto insurance where they bank, I remain skeptical.
"Banks don't have the affinity with customers they think they do," he added.
Customers are more likely to seek out independent agents when they need property and casualty insurance, he said. That failure to draw customers to bank branches to buy property and casualty insurance means there will be few if any more mergers like the Citibank/Travelers marriage, Mr. Dickey speculated.
"Perhaps life insurance companies could get bought by a bank, but I don't see too many banks lining up to purchase property and casualty insurers," he said.
