NetBank Inc. has big plans to expand property/casualty insurance sales after completing the purchase of some assets of an online agency.
NetBank already sells insurance products such as life, health, auto, and homeowners coverage through an arrangement with the Fidelity Investments subsidiary Insurance.com. Through that deal, which began in May 2000, users of the bank's Web site can click through to a co-branded site to get quotes.
But the asset purchase last week from NetInsurance.com means insurance sales on a much larger scale, said Douglas Freeman, chief executive officer of the Atlanta online banking company. Within six months, he said, it expects to be selling homeowners insurance in 50 states to customers who apply for loans from NetBank's mortgage operations.
"This is to be our primary relationship for dealing with insurance for our mortgage business," Mr. Freeman said, referring to the three mortgage subsidiaries, Resource Bancshares Mortgage Group Inc., Market Street Mortgage Corp., and Meritage Mortgage Corp. These businesses sell loans online independent of NetBank's main banking site, and they originate about 100,000 mortgages a year.
Starting this month with a pilot program in California, customers who apply for a mortgage through Meritage will be asked whether they want quotes for homeowners insurance. If they say "yes," they can get quotes online from top carriers such as Hartford, Kemper, and Progressive.
Mr. Freeman said NetBank intends to test the process in its other mortgage operations this summer and then do a full rollout by yearend.
The arrangement does not replace the one with Insurance.com, he said, because the product lines and customer bases are different. However, he acknowledged that at some point NetBank might start using the NetInsurance technology to sell products like auto insurance on the bank's Web site.
Mr. Freeman himself comes from the mortgage business; he became chief executive officer in April after NetBank bought Resource Bancshares Mortgage Group, which includes Meritage. NetBank's former CEO, D.R. Grimes, remains the company's chairman.
When he was appointed Mr. Freeman told American Banker that he wanted to expand NetBank's insurance business.
In a deal closed Wednesday, NetBank bought the technology, underwriting relationships, licenses, name, and Web address of NetInsurance.com and formed its own insurance division, which has yet to be named. E. Robeson MacKethan, the founder and former president of NetInsurance.com, has been tapped to lead the unit.
Mr. Freeman said he sees real opportunity for selling insurance online to mortgage customers. "If you go back to NetBank's strategy, we're all about using the Internet to be able to go out and find the very best services and products for our customers," he said.
"What we have to understand is that people want a car or they want a home, they don't necessarily want a mortgage or want insurance," Mr. Freeman said. By offering these products seamlessly when the customers need them, he said, he hopes to help customers achieve their goals.
