ABA Banking Journal - September 2007 - (Page 46)
INSURANCE SALES The art & craft of cross selling Gaining momentum with insurance sales B By Lauren Bielski, senior editor 46 SEPTEMBER 2007/ABA BANKING JOURNAL www.ababj.com/subscribe.html ILLUSTRATIONS BY MCMILLAN DIGITAL ART anking and insurance after Gramm-Leach-Bliley was supposed to be a natural pairing of risk management products with deposit and credit accounts, but has proven, if not unnatural, then certainly awkward for many U.S. bank holding company owners of agencies or brokerages. “When it comes to the universal provider model in this country, the bloom is off the rose,” notes Deloitte Consulting principal, financial services, Don McNees of the bancassurance delivery system that’s done so well overseas, where banks are, in many countries, the service provider of all things financial. Here, selling insurance effectively is all about specialization and overcoming organizational hurdles. Referrals between bank and insurance divisions, however, are becoming more typical, as we’ll see. And, in a market this colorful and well branded, the division of market isn’t really a big mystery. Try, as a bank, to compete against State Farm, like a good neighbor, or even agencies like Geico (so easy a caveman can do it) and it’s clear that in many areas, the premiums aren’t just there for the taking. Instead, as you’ll see in our quick-take cases beginning on p.48, the specifics of the strategy matter less than being specific in the first place. “It’s really about knowing customers and taking advantage of natural synergies between core banking products and insurance lines,” says Michael White, CEO of Radnor, Pa.-based Michael White Associates. Turf wars and other realities Since GLB and for the time being, anyway, it is the case that the notion of banks underwriting insurance is more “the little engine that might have but didn’t” than a rocketing freight train. Andrew Barile, Andrew Barile Consulting Corp., Rancho Santa Fe, Calif., has examined many deals over the years and consulted on dozens of others. To him and others knowledgeable enough to read the signs, the current industry topography has resulted from turf hostility. Cases in highly publicized point: Citibank’s sale, in 2005, of Travelers and the follow-up, last July, of J.P Morgan Chase, which let go of life insurance and annuity underwriting businesses. More recently, the $155 billion-assets Citizens Financial
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