Magazine article American Banker

ABA Finds Banks off to Slow Start in Insurance Sales

Magazine article American Banker

ABA Finds Banks off to Slow Start in Insurance Sales

Article excerpt

The latest survey of banks that sell insurance has found few that are declaring victory.

Of more than 240 banks that responded to a national survey of bank insurance services, three-quarters said their efforts were moderately successful or unsuccessful. The remainder described their programs as successful.

But the American Bankers Association Insurance Association, which commissioned the study, said it is optimistic. Two-thirds of those surveyed had two years' experience or less at insurance sales.

"When you look at this phase of the banking industry in insurance," said Larry P. LaRocco, managing director of the ABA's insurance unit, "you're seeing there are growing pains going on that are similar to those that accompanied mutual funds. It's not all smooth."

The ABA's insurance association, which has 13 big-bank members, is itself just spreading its wings. This is the first study from the two-yearold group to go beyond legislative and legal issues related to bank insurance sales.

Mr. LaRocco said the survey, done by American Brokerage Consultants in St. Petersburg, Fla., will be repeated annually to provide benchmarks for banks of all sizes.

The initial findings showed that those new to insurance are broadening product lines and experimenting with delivery channels, he said.

Sixty-five percent of banks surveyed said they relied on internal distribution, and 30% said they use third-party marketers or relationships with outside insurance agencies.

The most successful way to sell was still the old-fashioned house call. …

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