Magazine article American Banker

Insurer Great West, Disappointed with Banks, Pushes Sales Via Schwab

Magazine article American Banker

Insurer Great West, Disappointed with Banks, Pushes Sales Via Schwab

Article excerpt

Disappointed with banks as a source of insurance revenues, Great West Life and Annuity Insurance Co. is channeling its promotional energies elsewhere.

It may be a sign that banks are not producing the new wave of insurance revenue for which many in the industry had hoped.

Great West has curtailed its marketing to 12 bank clients and is focusing instead on an arrangement it announced in April with the discount brokerage giant Charles Schwab & Co.

The insurer decided it did not have the resources to pursue bank sales while also being the exclusive insurance provider through Schwab's network.

"There are very few success stories distributing life insurance through banks," said Dennis Low, executive vice president of financial services at Denver-based Great West.

The $15 billion-asset company is going against the industry grain. Many insurers still view banks as their path to reversing a decade of declining sales. Insurance underwriters are jostling for position as regulators loosen restrictions on bank insurance sales.

Great West jettisoned its third-party marketing subsidiary, BancSource Insurance Services Inc. of Edina, Minn., which had been selling annuities through banks for two years. Marquette Bancshares of Minneapolis, Great West's lead bank client, took over BancSource's sales staff in January.

Mr. Low, who oversaw the department that targeted banks, is now concentrating on the Schwab program. The companies are spending $3 million on an advertising campaign in California, where their offering is still in a pilot phase. …

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