Dale Jansen, the head of Union Bank of California’s insurance subsidiary, says he is again looking for agencies to buy after UBOC Insurance paused from dealmaking last year while integrating the four agencies it had bought in the preceding 26 months.
"Our long-term strategy is to grow the business” through acquisitions, Mr. Jansen said in an interview Friday.
“My original goal was to … have our insurance business grow to 5% of the bank’s total revenue” within three years of the November 2001 deal that got the bank into insurance, he said. UBOC Insurance had $78 million of revenue last year, or about 3.1% of the bank’s $2.5 billion.
“We are probably a little behind schedule,” Mr. Jansen said. “We were focused on integration instead of acquiring more agencies. I thought we would have one or two more by now.” It took time, he said, to coordinate the acquired agencies with salespeople, get paperwork in order, and make sure customers were taken care of.
When considering agency opportunities, UBOC Insurance focuses on the commercial side of the business. “We are looking for larger regional agencies that are focused on commercial property and casualty and the benefits business,” he said. “All of our agencies do a modest personal lines business, but we are focused on the commercial side.”
Geography is also very important to its agency deals, Mr. Jansen said. UBOC Insurance got its start with the purchase of a large Fullerton, Calif., agency, Armstrong/Robitaille Business and Insurance Services, that established it in the Los Angeles area, as well as of John Burnham Insurance Services in San Diego. Though the Union Bank subsidiary of UnionBanCal Corp. is based in San Francisco, he said, its biggest market shares are in San Diego, Los Angeles, and Orange counties in Southern California.
UBOC Insurance also bought near the company’s base with an April 2003 deal for Tanner Insurance Brokers Inc. in Pleasanton in the Bay Area. Finally, Armstrong/Robitaille bulked up with the December 2003 purchase of Knight Insurance Agency in Glendale, near Los Angeles.
The bank entered insurance because “it’s tied to the commercial and small-business banking strategy to offer a broader array of products and services to customers,” Mr. Jansen said.
He said he does not consider insurance a mature business line at Union Bank. “I don’t think three years in the business can be seen as mature,” he said. “We’re still working on cross-selling activities” using enterprise sales teams throughout the commercial side of the bank that meet monthly to identify “good prospects for cross-selling.”
“I’ve been in banking a number of years,” Mr. Jansen said, “and I realize that cross-selling isn’t always easy.” “It takes some time for relationships to develop. We didn’t factor cross-selling into the financial model. Anything along those lines w[as] gravy.”
UBOC Insurance offers business, personal, and life and health insurance products, including group health benefits, general liability, workers’ compensation, employment practices liability, property, professional liability, and executive protection liability.
UnionBanCal is a holding company majority-owned by Bank of Tokyo-Mitsubishi Ltd. Its primary subsidiary, Union Bank of California, has branches in California, Oregon, and Washington.
