Nationwide Financial Corp. is reorganizing its life insurance sales unit to ramp up business through banks and other large distribution channels.

Though most of its life policies are still sold through financial planners, banks are growing in importance for Columbus, Ohio-based Nationwide, said Richard A. Karas, president of NFS Distributors Inc., the sales subsidiary.

"We are starting to make significant inroads in the banks selling variable life insurance," he said. "As they look at insurance products as becoming a larger and larger part of their overall revenue stream, life insurance fits that niche perfectly."

Nationwide is the fifth-largest U.S. provider of variable life insurance products. It had $325 million of variable universal life sales in 1999, including $20.7 million through banks - against $12.5 million in 1998.

There is little research on the amount of variable life sales through banks, but Nationwide spokesman Jeff Botti said the company believes it is at or near the top.

Michael D. White, president of the banking and insurance consultant Michael White Associates in Radnor, Pa., said, "You can't wing it." Insurers, he said, "need to be attentive and knowledgeable in that marketplace. They need to be able to talk the bankers' language."

They also have to devote resources if they are to succeed in selling through banks, Mr. White said.

The restructuring of NFS Distributors follows the retirement on July 1 of Bradford K. Cook, who had led Nationwide's variable life sales operation for 10 years. Peter Golato will lead the brokerage life sales as vice president, and focus on serving banks, independent financial planners, and wire houses that sell variable life insurance.

Troy Anderson has been named vice president of corporate-owned life insurance. He will be responsible for sales of corporate-owned and bank-owned life insurance policies, which are purchased by employers as benefits for key employees.

"Corporate-owned life insurance policies, for the most part, are nonqualified, deferred-compensation programs for highly compensated executives," Mr. Karas said. They are a large growth area for NFS, he said.

Mr. Golato and Mr. Anderson report to Mr. Karas.

He said the two new units will give each area - variable life and corporate-owned life - internal recognition within the company, and help Nationwide better track growth in multiple channels, he said.

Mr. Karas said variable life has not been as successful a product as variable annuities, in banks and elsewhere. "We started out in variable life as we went public in 1997, saying it was going to be the product of the 90s. It turned out that variable annuities were really the product of the 90s."

One issue is time. Nationwide is trying to accelerate application processing so that underwriting a variable life policies will be completed within six days in a majority of cases - instead of 30 to 60 days.

But that trend is changing as people learn about the relatively new product, he said-so much so that Nationwide believes there are not enough producers to supply the demand for variable life policies and is seeking new outlets.

Nationwide is focusing wholesalers and specialized support in the banks to help them effectively sell these life insurance products, Mr. Karas said.

But marketing through banks is demanding, Mr. White said.

"Not much of it's been sold," he said. "To the extent that life insurance has been sold through banks, it's usually been some type of single-premium product" such as an annuity.

"You don't have any great, stellar performances out there," he said. "Part of the reason is that either the third-party provider or the bank, if they have their own internally managed program, has largely been investment-product-oriented. They've been hiring your classic stockbrokers, not somebody who deals with financial planning."

Insurers need a system for selling variable life through banks, including a marketing plan and a willingness to help banks hire or train people, the consultant continued.

"It's a matter of winning hearts and minds," he said. Insurers and banks must demonstrate to salespeople at all levels that they are "leaving significant money on the table" when they fail to make insurance sales.

"The rank-and-file bank employees," Mr. White said, "do not have a real basic understanding of what is happening in the financial services industry."

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