It's a marriage made in heaven when a bank buys an insurance agency.

Or at least it seems that way.

On the agency side, the principals have the opportunity to cash out when values are declining. For those wanting to remain in the business, a bank offers an infusion of capital.

And it's become fashionable -- even trendy -- for banks to own insurance agencies. Big banks are buying big agencies, and smaller banks are grabbing the smaller ones.

There are good reasons why bankers and insurance agents should join forces. One-stop shopping offers consumers what they want more than anything else today -- convenience.

And who can forget the biggest prize of all: the bank customers who will be given the opportunity to buy homeowners, auto, disability, life, boat, and business insurance, as well as equity products, from the bank-owned agency. At the same time, insurance agency customers will be presented with an array of banking services.

Insurance agencies have long been in close proximity to banks. Once customers had their mortgages approved, the bank president would tell them, "You're going to need insurance on that new house. Why don't you go upstairs and see Tom." Grateful for the loan, the customer would march up one flight and buy homeowner's coverage.

But the differing cultures of banks and insurance agencies can be in conflict. For example, banks have long used "attraction techniques" -- such as attractive interest rates, convenient office or ATM locations, free checking accounts, or even gifts -- to lure customers.

Constrained by state insurance regulations, insurance agency selling is just the opposite. Instead, agencies have aggressively gone out to grab customers.

Culture conflicts are real. For example, how will bank customers react when they are approached by the insurance side of the house? How will they feel about the insurance people having access to their financial records? Are bankers betraying a basic trust, even though everyone is part of the same organization?

In other words, there's a certain reality to getting in the insurance business: It's not about owning an insurance agency; it's about selling insurance.

Another twist is the way a bank perceives the role of its insurance agency.

Though a bank undoubtedly views the agency as a profit center, the facts suggest that agencies are not as profitable as they were in the past. Agency commissions are down, and a soft market has driven premiums lower and lower.

And though agents continue to hope that the market will turn, most experts doubt that will happen soon. Contingency commissions from carriers have saved more than one agency from financial despair, but there is reason to believe that this annual shot in the arm will be less potent in the years ahead.

There is more than enough room for improving agency productivity, but that has become extremely expensive. A number of bankers are finding themselves bankrolling necessary system improvements.

If banking and insurance are to enjoy a mutually beneficial relationship, a special environment must be established.

Banks cannot view the insurance organization as an outsider.

For example, one bank refused to permit the in-house insurance agent to approach customers obtaining mortgages. The bankers were clearly uncomfortable, fearful that it would be seen as too pushy. Everyone at the bank was surprised when few insurance policies were sold to mortgage borrowers. And the bank's customers were confused by the presence of the insurance agency operation -- because no one had the courage to talk about it.

Make the banking-agency relationship seamless. It appears that one of the major mistakes some banks make is assuming that the ideas of buying insurance will "ooze" into customers' consciousness. Allowing insurance people to mine the bank's customer base is essential. There's no way to meet customer needs if there's no way to have direct access to customer information.

Sharing customer information is crucial to designing products and programs to fit specific customers. Selling insurance has nothing to do with sending out thousands of statement stuffers, the antithesis of a personalized communication. It's an antiquated, useless technique. The issue today is focusing on individual customer needs.

If a bank can add value to its relationship with its customers by helping them reach their financial goals and lifestyle objectives, it is doing its job. But this cannot be accomplished without the right data.

Marketing must precede selling. Some banks seem embarrassed to be in the insurance business, so they try to hide it. This approach only causes confusion and doubt.

People don't change their behavior quickly, and customers will tolerate even poor service rather than make a change. So there's no reason why they should jump to buy insurance from a bank just because it bought an insurance agency.

Cultivate customer interest and let them become comfortable with the services and products now available to them through the bank.

Stop thinking "lobby." A major mistake is viewing the bank's lobby as the place to sell insurance or financial products.

What percentage of customers visit a lobby today? Fewer and fewer by design. It's expensive to provide face-to-face service. Besides, customers in a teller line may not be the best customers, though they may be the ones who take up the most time.

In other words, it seems that some banks entering the insurance-financial services field tend to look for sales from the customers they see. It's only by focusing attention on customer data that the insurance sales task will be accomplished.

Customers will see the selling of insurance and financial products by a bank as valid if they feel that everyone involved is trying to understand and meet their needs.

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