Webster Financial Corp. of Waterbury, Conn., says referrals of small-business customers from its banking operation are helping its insurance subsidiary make more sales.

"The business banker has the relationship, and as part of his review with clients, he'll find that insurance could be a needed product," said John Queirolo, president and chief executive officer of Webster Insurance in Westport, Conn. "That's when we're called in. The way we see it, if we're not going to be your best friend we'll settle for being your second-best friend."

Webster has made $400,000 to $500,000 in insurance sales through business banking referrals this year, Mr. Queirolo said.

Webster Financial has had an insurance business since 1998, but only this month was the subsidiary officially named Webster Insurance. Webster's insurance business and three agencies that the banking company has bought - Damman Insurance Associates in 1998 and Levine Cos. and Follis, Wylie & Lane this year - had 1999 revenues of $14.1 million.

Through the referral program, which has been in effect most of this year, commercial business clients of $9 billion-asset Webster Financial have purchased group health, life, disability, liability, commercial auto and worker compensation.

"Our focus is on being a stand-alone, dominant retail broker," Mr. Queirolo said. "We're going to make our real money as an independent agent, and we do not want to lose our sales skills. Bank distribution is our second piece, and we manage that mostly through a referral network." The referral program does not make extensive use of Webster's 115 bank branches.

Carmen Effron, president of C.F. Effron Co., a consulting firm in Webster Insurance's hometown, said the referral strategy makes sense.

"When you look at small business, the need for insurance is immense," she said. "The small-business person needs all sorts of insurance. It's a matter of economics. You can sell three or more policies to a company, and that's more than you'll probably sell to an individual."

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