Magazine article American Banker

Wells Fargo Bails out of Big Push to Sell Insurance to Noncustomers

Magazine article American Banker

Wells Fargo Bails out of Big Push to Sell Insurance to Noncustomers

Article excerpt

Wells Fargo & Co. has scrapped an effort to sell life insurance to prospects outside its customer base.

Wells, one of the banking industry's most aggressive marketers of investment products, disbanded a two-year-old program under which it tried to sell term, whole-life, and long-term-care policies by telephone. The bank had bought lists of prospects, then s ent them marketing materials that included a toll- free telephone number to call.

San Francisco-based Wells will continue to sell insurance via mail and phone to its own customers, said Michael Patriarca, president of Wells Fargo Insurance Services. But it is planning to simplify its product menu.

"It's tough sledding right now, but it will come," Mr. Patriarca said.

Wells- which launched its direct-mail insurance effort in 1992-is one of the first banks to acknowledge a setback publicly. Its retreat comes as many banks are developing marketing programs that involve sending insurance solicitations through the mail to targeted audiences.

Now, many of these banks are likely to revisit their strategies because of Wells' lofty stature in the industry.

"There are those bankers who will point to Wells and say, 'Even they can't make it work,' but they shouldn't read that much into this," said David Kaytes, a managing vice president at First Manhattan Consulting Group, New York. He called Wells' attempt to sell insurance to noncustomers an "experiment" that would not deter it from trying other strategies.

"It's an example of the learning process banks are going through," he said.

Wells halted its effort to sell policies to consumers outside its customer base on Jan. 6, a spokeswoman for the $108.8 billion-asset banking company said.

The move affected 19 salespeople. Mr. Patriarca said most of them have found posts in other areas of the bank.

A former regional director for the Office of Thrift Supervision and deputy comptroller in the Office of the Comptroller of the Currency, Mr. Patriarca called Wells' effort to go outside its customer base "a complex and interactive process that wasn't cond ucive to a direct mail telephone sale. …

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