Magazine article American Banker

Survey: People Link Insurance to Getting Bank Loan

Magazine article American Banker

Survey: People Link Insurance to Getting Bank Loan

Article excerpt

As banks bolster their insurance programs, most people surveyed by an insurance group indicate that they would feel pressure to buy policies from the same banks they borrow from.

About 61% of the 1,996 people questioned said they strongly agreed, agreed, or probably agreed with the statement: "If banks sold homeowners insurance people would be expected to buy their homeowners insurance there to get a loan."

The finding, which seems to confirm a fear expressed by some in the insurance industry, was part of a quarterly Public Attitude Monitor done by the Insurance Research Council, which also found that few customers are buying insurance from banks.

The last time the question on pressure was posed -- in 1992, well before bank insurance programs were generally available -- it produced a similar result. "With the passage of financial services reform, we decided to repeat it," said Elizabeth Sprinkle, the council's senior vice president.

The group is the research arm of the American Institute for CPCU, an insurance industry educational organization that trains and certifies candidates for the "chartered property casualty underwriter" designation.

One expert on banks in insurance disputed the study's finding, saying that many other studies have shown consumers who actually bought insurance through a bank do not feel pressured.

"Those that have bought insurance from banks have resoundingly rejected the accusation of opponents of bank insurance that they felt coerced," said Michael D. White, president of Michael White Associates, a Radnor, Pa., consulting firm.

Mr. White also criticized the survey questions' wording, which he said was vague and unclear. Studies should ask people directly whether they feel coerced, whether they know that coercion is illegal, and about their actual experiences with banks in insurance. "If that question was intended to find out whether or not consumers are concerned about coercion, it's ill-conceived and doesn't adequately convey enough information," he said. …

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