Magazine article American Banker

Great-West, Keying on Life, Says Bank Deals Open Doors

Magazine article American Banker

Great-West, Keying on Life, Says Bank Deals Open Doors

Article excerpt

Great-West Life and Annuity Insurance Co., finding the annuity provider market too crowded, is concentrating on the wide-open life insurance field in its bank distribution and counting on a big lift from acquisitions that two of its bank partners have made this year.

The Englewood, Colo., company has been selling two simplified life insurance products -- one term, one whole life -- through its bank partners since 1997. It took Huntington Bancshares Inc. as its first bank partner in 1997 and added U.S. Bancorp in 1998 and Fifth Third Bancorp in 2000, said Bob Shaw, senior vice president of individual markets for Great-West.

In January, Milwaukee-based Firstar Corp. bought U.S. Bancorp, of Minneapolis, and in April, Fifth Third bought Old Kent Financial Corp. Great-West is already taking advantage of these deals by adding Firstar and Old Kent branches to its distribution network.

Cherie August, assistant manager of marketing for Great-West, said: "Our research showed that customers are underinsured and that they want the coverage. But they also want a product that can be purchased simply. They want a transaction that can be conducted with ease."

Mr. Shaw said simplified products that are not underwritten are a good fit with bank sales. The bank-branch customer answers a set of questions "that could lead to a sale in 10 minutes."

Great-West is seeking more sales deals with banks, "but we're really focusing on the banks that we have first," Mr. Shaw said.

It has no plans to distribute its annuities through banks, a surprising position given that banks have been successful at moving annuities and are still minor players -- if that -- in life insurance distribution.

Individual life sales through banks were just $422 million last year, against $31 billion through banks for annuities, according to Kenneth Kehrer Associates, of Princeton, N. …

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