A new insurance subsidiary is offering life and disability insurance to wealthy customers of S&T Bank of Indiana, Pa.
S&T Insurance Group was formed "to complement our overall strategy of offering all financial services," said Bill Klumpp, senior vice president for strategic planning at the $2.2 billion-asset bank. "Offering insurance is an obvious fit."
The bank, the principal subsidiary of S&T Bancorp, operates 39 branches in seven Pennsylvania counties.
S&T is selling the insurance lines almost entirely on a referral basis. It will not market them at the branches, said Ernie Draganza, vice president of insurance and risk management.
"The referrals will come from our wealth management and commercial groups," Mr. Draganza said.
"If clients' financial planning is going to be well-coordinated and well-managed, they need to have as many options as possible," he added. "Offering life insurance is part of the financial planning."
The bank would not refuse to sell to people who "came in off the street" to buy insurance, Mr. Draganza said, "but we're not expecting that to happen."
S&T's strategy is unusual but may work, said Carmen Effron, president of consultant C.F. Effron Co. of Westport, Conn.
"They are going to help their clients," Ms. Effron said. "They understand their clients and are going to offer them another product."
The bank is offering only life and disability products at this time. "Property and casualty lines aren't the best sellers at banks," Mr. Klumpp noted. "We'll let these products develop and add other products as they make sense.
"This is certainly only our first step, but we're going to take our time and try to get this right, " Mr. Klumpp said. "Many banks have ventured into insurance, but for whatever reason, there haven't been many success stories."
All policies sold through S&T are underwritten by Guardian Life Insurance Co. of New York.