VantisLife Insurance Co. plans to increase its assets and distribution by extending its reach with banks, particularly small and midsize ones.
The East Hartford, Conn., company has $700 million of assets under management. Craig Simms, a senior vice president, said it could reach $1 billion of assets in the next five years as it pursues banks with assets under $20 billion.
“Competitors are not going after these banks,” he said. “They want to sell insurance to Wachovia and Wells Fargo and Bank of America. We are way too small to go after large banks like that. We are more than happy to work in this niche.”
Mr. Simms said that VantisLife had distribution arrangements with 10 banks at the end of 2004, and now has 30. He expects VantisLife products to be sold in 60 to 65 banks by the end of this year, and in 70 to 80 banks within five years.
“We want to focus on one channel,” he said. “We want to grow our share in these banks.”
Most of the distribution agreements are with East Coast banks, Mr. Simms said, but the company wants to expand west.
The 77-employee firm started in 1942 as Savings Bank Life Insurance Co. It began looking to expand its business three years ago when it established itself as VantisLife, Mr. Simms said. He said he expects it to have 100 employees within the next three years.
VantisLife started a program at the end of February that helps banks market and sell life insurance and annuity products.
Mr. Simms said the program allows banks to sell from a suite of insurance products —including fixed annuities and life insurance — both through their financial advisers and through licensed representatives on the platform.
“You should only need as much time to set up a life insurance policy as you do to set up a checking account,” he said.
Eighty percent of VantisLife’s sales are made on a bank platform, he said. “We want to offer simple products. These aren’t universal life or variable universal life products.”
Banks can develop a great deal of business by offering basic, no-frills insurance packages for customers with income of $50,000 to $125,000 a year, Mr. Simms said. He said these customers are a real sweet spot for banks.
“This is a volume business and selling products and developing scale is all about volume,” he said. “This is a product suite that we believe banks can sell in volume.”
Ken Kehrer, an insurance analyst with Kenneth Kehrer & Associates in Princeton, N.J., said most small and midsize banks would prefer to work with a single provider that can offer annuities and life insurance. However, large insurance providers tend to be too siloed to offer these products in a single suite.
“Most insurance companies are hampered because their annuity factory is quite separate from their life insurance factory,” he said.
Mr. Simms said he hopes strong life insurance sales will help the company’s fixed annuity sales, which have slumped with the rest of the industry in the past year. VantisLife had $31 million of fixed sales last year. Mr. Simms said he expects only $20 million of fixed sales this year.
“Fixed annuities sold next to zero last year,” he said. “We must sell more fixed annuities through banks, but it is really tough when they can look over and get better returns from a CD. … This is a very cyclical business. Fixed annuities are just down right now.”
Still, by leading with life insurance, Mr. Simms said VantisLife is growing through the bank channel. The firm, whose largest banking customer is People’s Bank in Bridgeport, Conn., is about to sign National City Corp. in Cleveland, Mr. Simms said.
Mr. Kehrer said most banks that successfully integrate distribution of annuities and life insurance lead with the annuity. “Most companies haven’t tried leading with life insurance, but it should work,” he said.
Mr. Simms said VantisLife wants to offer other products, including an income annuity that it plans to unveil in the fall. Effective selling of life insurance through banks takes a top-down commitment from the bank, he said, and “the truth is only a handful of banks are really committed to this right now.”
