Banks, Insurers Told to Investigate Joint Insurance-Selling Ventures
Henry, David, American Banker
NEW YORK -- Although their lobbyists are at war, bankers and insurers have a lot to offer one another in joint ventures to sell insurance, speakers at a conference said this week.
They warned, however, that bankers must proceed carefully in selling insurance and must make sure they have good advice, profitable opportunities, and three to five years of patience. Insurance underwriting, they said, is a loser now and offers bankers nothing but expensive trouble.
The speakers generally dismissed rules and laws prohibiting banks form selling insurance as barriers that can be overcome or quickly removed.
"You're going to be giving the banks another service to offer, and you're going to improve distribtion by giving insurance agents another place to sell," said J. Bud Feuchtwanger, president of the Feuchtwanger Group Inc., a New York-based marketing consultant to financial institutions. Insurance sales, he added, give banks more opportunities to charge fees.
Mr. Feuchtwanger was one of 10 people who addressed 175 bankers, insurance agents, and others at a conderence conducted by Executive Enterprises Inc.
The chairman of the conference, Andrew Barile, a reinsurance specialist and chairman of a New York and Bermuda firm that carries his name, said, "It is a forgone conclusion that we will have to find ways of working together whether we are from the banking industry or the insurance industry."
Offering customers insurance can be a way to keep money from going completely out the door, said Edward J. Ganczak, vice president and national sales manager for Goldome Agency Inc., an insurance agency of Goldome Savings Bank of Buffalo.
Bankers don't know how to sell, but those in the insurance industry can teach them, Mr. Ganczak said. In turn, said Mr. Feuchtwanger, banks can offer insurance companies good reputations with and access to customers.
In addition, the information a bank has about specific customers " can really be dynamite in this game," said C. Paul Patsis, a vice president of Colonial Penn Insurance Group in Philadelphia. The company specializes in selling insurance directly to individuals through the mail and by telephone.
Although readily available demographics can provide mass insurance marketers with accurate stereotypes of people who live within a particular city block, they are not as valuable as a bank's customer list, he said. …