Though once viewed as inappropriate for many banks, property and casualty insurance will drive insurance sales growth at banks into the future, according to a study.

Bank sales of property and casualty insurance are expected to grow at an annual clip of 60% over the next four years, compared with a 32% rate for all insurance-related products, including annuities and life insurance, according to Datamonitor, a New York-based research and consulting firm.

"The property and casualty area is exploding and will continue to do so," said Jeffrey Chen, a senior financial services consultant with Datamonitor.

The results of Datamonitor's third annual "Banks in Insurance" survey contrasts with earlier thinking about how banks will succeed in the business of marketing insurance.

In recent years, many leading bank insurance executives believed that life insurance policies-not property and casualty-made the most sense for banks. The reasoning was that life insurance generated higher commissions while incurring fewer claims than property and casualty insurance.

By contrast, policies that protected homes and automobiles generated many claims, thereby making the business far more complicated for banks from a customer service standpoint.

But Mr. Chen said this thinking has slowly fallen by the wayside as improvements in back-office technology make customer service more efficient. In recent years banks have found ample opportunities to acquire independent property and casualty agencies across country.

Moreover, Mr. Chen said, "banks are learning to integrate the culture of selling insurance into the overall corporate culture and there are synergies between property and casualty insurance and traditional bank businesses such as automobile and home lending."

Property and casualty insurance generated $1.7 billion in premium sales for banks in 1997, and that number is projected to climb to $4.4 billion in 1998 and $9 billion in 1999, according to Datamonitor.

Though annuities still constitute about 75% of all insurance-related sales at banks, this number will fall off as retail insurance projects gain a larger slice of the pie, Mr. Chen said.

The survey revealed that BankAmerica Corp., Chase Manhattan Corp., Citibank, First Union Corp., and Wells Fargo & Co. were the top five banks in terms of generating revenues from insurance-related activities.

The study also said that the nation's 50 largest banking companies generated $2.4 billion in insurance-related revenue, about 70% of all such bank revenue.

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