PNC May Sell Proprietary Insurance via Telemarketers

PNC Bank Corp., one of the banking industry's leading sellers of investments, is mulling plans to telemarket a variety of life and property insurance policies.

Richard L. Spickard, PNC's vice president of consumer insurance, said the company is considering using its 750 telephone representatives to market life insurance. He added that PNC is developing proprietary insurance products specifically for the marketing push.

"We are looking at specific product offerings and how to better utilize their features" in proprietary offerings, Mr. Spickard said in a recent interview.

Right now, the $72 billion-asset banking company sells life, health, auto, and some homeowner's coverage to its customers in Pennsylvania and New Jersey, and in an additional 28 states through its Delaware agency.

PNC also sells term life insurance through direct-mail solicitations - as other big banking companies such as First Union Corp. and NationsBank Corp. are also doing.

Mr. Spickard would not discuss details of the new products or when they might be rolled out. But industry experts suggest the new line will be variable-rate products that wrap around PNC's $30 billion-asset Compass Capital Funds family.

Valerie Jordan, president of Jordan & Jordan, a Belchertown, Mass., consulting company, said an emphasis on proprietary products could give the company a steady stream of fee income, and add to the services PNC can offer under its own brand name.

"From a strategic standpoint they can use their existing (telephone) staff," she added. "It's a way of getting into the business faster without having to recruit a bunch of new reps."

But one observer said PNC's effort could carry a hefty price tag.

"It's going to be a an expensive effort to license all those people and put them on the phone," said Michael A. Prairie, a manager of Charter Oak Marketing & Financial Group, a Farmington, Conn.-based consulting firm.

And while Mr. Prairie agreed that hooking up with one insurance underwriter to develop proprietary products is a good long-term move for PNC, he said the bank "may tick off some of the main carriers" whose products PNC currently sells.

Those companies include: ITT Hartford Life Insurance Co., Minnesota Mutual Life Insurance Co., CNA Financial, Chubb Corp., and Union Security Life Insurance Group.

Mr. Spickard said the list of vendors will likely be expanded as PNC increases its sales effort. He would not disclose what company will underwrite PNC's new products, or which are likely to be dropped or added.

He added that PNC will focus exclusively on selling insurance to the 3.3 million households it serves, instead of competing head to head with independent life insurance agents in its markets. The banking company has no plans to acquire more insurance agencies beyond the three it currently owns, he said.

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