As banks explore the life insurance sales frontier, Charles Schwab & Co. is already staking out a claim.

Beginning July 1, the San Francisco-based discount broker will direct- market nationwide six types of life insurance policy, according to executives at Great West Life and Annuity Insurance Co. The effort is an expansion of a pilot program Schwab began with Denver-based Great West last spring.

"We're buffing out the rough edges, polishing it up, and are preparing to go national," said John Roeske, Great West's vice president of financial services.

A U.S. Supreme Court ruling last year gave national banks permission to sell insurance nationwide from small towns, prompting many to search for ways to fit life insurance into their product lines. The Schwab program, observers said, is likely to emerge as a model that many banks will want to follow.

Schwab is expected to sign an agreement this week to market Great West's policies to its brokerage customers. Unlike some banks-which have chosen to give their customers price quotes from many insurers-Schwab is expected to hawk Great West's policies exclusively.

"In selling insurance, selling a product is more productive" than selling quotes, said Kenneth Kehrer, an insurance consultant in Princeton, N.J.

A Schwab spokesman confirmed Wednesday that the company is in discussions with Great West but added that an agreement to expand the companies' relationship had not yet been signed.

Schwab has been selling Great West's no-load term and universal life policies in California since May. Last fall, the discount broker expanded the program to include 12 more western states.

This summer, Schwab will add several Great West products to its menu, including variable universal life, survivorship universal-which will be sold through investment advisers-20-year term, and possibly a five-year universal product, Mr. Roeske said. Schwab also offers a proprietary variable annuity, which is underwritten by Great West.

To market Great West's policies, Schwab plans to send out statement stuffers about the products and place informative signs and brochures in all its branches, Mr. Roeske said.

According Mr. Roeske, Great West put its sales efforts through banks on the back burner about 18 months ago in order to concentrate its energy on Schwab. Currently, Schwab is the only third-party company selling Great West products, but the insurer may revisit the bank channel soon, Mr. Roeske said.

Banks would be hard-pressed to match Schwab's results, however. Schwab's conversion rate-the number of inquiries that result in a policy sales- averaged less than 10 during the pilot program, Mr. Roeske said. Other marketing avenues require about 40 inquiries to sell one policy, said Mr. Kehrer, who works closely with Great West.

Mr. Roeske attributed Schwab's success to the fact that it only sells one insurer's products. Customers are less likely to be confused, or to walk away without making a decision because they were confronted with too many choices, he said. A simple application process also helps, he said, so Great West has underwriters rather than telephone sales representatives call interested customers.

Still, some bankers said they prefer to offer consumers policies underwritten by several insurers. Fleet Financial Group Inc., for example, sells insurance from four to six providers, said Robert Evans, managing director of insurance services. The Boston-based banking company plans to add two providers to its menu in the next month.

"We think choice is better," Mr. Evans said. A customer is more likely to buy an insurance product best suited for him or her if there are a several providers to choose from. "No single insurance carrier is good enough and has the competencies I want to bring to my diverse marketplace," he said.

Great West eliminated its 6,000 commissioned agents and brokers three years ago, Mr. Roeske said, and shifted its focus to selling life insurance through financial institutions, like Schwab, that are good at retaining customer loyalty.

After Schwab and Great West reach final agreement, the companies will work on completing product design and on developing an advertising program, Mr. Roeske said. They also must file plans with insurance commissions in each state where their program will be offered.

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