As traditional insurance agents watch banks encroach upon their business, they might view Rick O. Bowman as a Benedict Arnold.
For nearly 20 years, Mr. Bowman was an independent insurance agent in Boise, Idaho, feverishly drafting bills for state lawmakers that would prevent banks from trespassing on his turf.
But two years ago he went to work for the insurance subsidiary of Portland, Ore.-based U.S. Bancorp.
These days, working out of a Boise office, the 48-year-old insurance veteran presides over one of the most forward-thinking bank insurance programs in the country. As most banks just begin to focus on their operations, U.S. Bancorp is building on a program that began six years ago, when the bank founded its own agency.
Mr. Bowman said that his insurance operations contribute 2% to the bank's pretax earnings - far more than most programs. And he is working on ways to boost that to more than 10%.
The prominent role played by insurance sales at the $23 billion regional bank serves as a model for other banks trying to stake a claim in this business. And observers attribute much of the this success to its plain-spoken insurance chief.
"Rick Bowman has a lot of experience in the insurance area that U.S. Bancorp has been able to successfully apply," said Bradley Powell, president of the financial institutions division at Jackson National Life Insurance Co.
Under Mr. Bowman's leadership, U.S. Bancorp has tapped the product list of 120 insurance companies to sell life, homeowner's, and accidental death and dismemberment policies.
Mr. Bowman acknowledges that most sales are derived from 15 to 20 underwriters.
But he emphasizes that the real earnings in bank insurance departments will come from selling affordable life insurance to middle- class and lower-income Americans who have been largely ignored by traditional life agents. This is an area that U.S. Bancorp is only beginning to explore.
Mr. Bowman has begun molding a program to sell such products by training nearly 700 platform employees to sell simple term insurance along with traditional branch products such as checking accounts, annuities, and mutual funds.
He hopes that his newly trained army of branch employees will be ready next year to sell a life product called Protect 10.
It is being pitched to banks by Essex Corp., a New York-based company that for several years has been training U.S. Bancorp's platform staff to sell annuities.
The term product, which is underwritten by Continental Assurance Co., offers a $100,000 death benefit. To cover someone 30 years of age, the policy would cost only $8.42 a month - a premium that can be automatically deducted from a policyholder's checking account.
To get the insurance, all the customers have to do is fill out a form in the back of a brochure. There are no medical exams or lengthy applications.
"The platform insurance program is the future for banks," insists Mr. Bowman.
By licensing platform workers to cross-sell term insurance, U.S. Bancorp will avoid the traditional and costly agency distribution system, whose sales have been declining for a decade.
And the sale is so simple it takes only minutes.
Trying to "replicate the efforts of an insurance agent" wouldn't work, said Gerald G. Cunningham, president of Essex.
Other banks are looking at these simplified policies - including Fleet Financial Group Inc., Boston, which has already begun selling Essex's product. And insurance companies are busy devising their own versions.
But even term insurance products that are designed to be sold fast have their limitations, according to industry experts. While Mr. Powell says the product is "a good first step" to getting customers thinking about term insurance, there's a trade-off: the death benefit is small.
U.S. Bancorp received much attention in 1990 when it fought insurance agents in the Supreme Court after forming an insurance agency in a town with the fitting name of Banks, Oregon.
Most people credit Barnett Banks Inc. in its 1995 case against the Florida for loosening the main barriers to banks' selling insurance. The court ruled that state laws can't bar national banks from owning an insurance agency in a small town.
But it was the U.S. Bancorp case five years earlier that got the ball rolling. The Supreme Court ruled in that case that federal law lets banks operate insurance agencies in small towns, but it did not deal with state jurisdiction.
Mr. Bowman, along with the rest of the banking and insurance industry, was watching the case closely. At that time he was starting up Cleveland-based KeyCorp's insurance operations.
He had just crossed over from the insurance agency business, and times were troubled. Whenever he attended meetings of insurance agent associations - groups he once presided over - the reception was less than friendly.
But he didn't get rattled by the dirty looks from members.
"They didn't want to be beside you when the group was around," he says,"but privately they would ask, 'Are you interested in buying an agency? "'
Mr. Bowman got his start in the insurance business as a 25-year-old, shortly after returning home from Vietnam. Along with a partner, he bought Graves Holden Insurance Agency in Boise. He spent $173,000 for the company, which he paid off over 10 years in monthly installments.
He aggressively built up his own practice, and made two unsuccessful attempts to persuade state legislators to pass bills preventing insurance sales at lending
institutions.
"When you're in that culture, that world, you get wrapped up in it," he says, explaining his former anti-banking zeal.
What made him switch sides?
He started realizing that sales generated by stand-alone insurance agencies were stagnating, he says.
At that time, a friend at KeyCorp called him to see if he wanted to start that bank's insurance operations. "At 42 years old, I did my first resume and first job interview." The rest is history.
Now that he has hitched his star to the banking industry, Mr. Bowman is talking in conciliatory terms about banks and insurance agencies.
"We've got to learn to meld these two cultures together and create our own culture, called bank-insurance," he says.
