ABA Banking Journal - September 2007 - (Page 50)

INSURANCE SALES top-holder BHCs with $300 million or more in consolidated assets reported participating in insurance activities. In the aggregate, underwriting income was negatively impacted in 2006 by softening of property-casualty premiums and declines in some agencies’ contingent commissions. Otherwise, bankers in the U.S. have had to rethink their ownership models and, down in the trenches, explore new affinities between traditional bank and insurance products as they adjust the selling process. Bradway, who has issued his own benchmark study on profitable banks, admits that while his methodology doesn’t show a strong correlation between insurance activity and profitability (that is, the best performers in his study had little or nothing to do with insurance), his strong performers, like those that made Michael White’s list, also had the traits of operating with distinct purpose, possessed a value-driven sales process, controlled cost, and adopted effective automation. “Banks might tap class B and C construction loans or real estate loans,” says Bradway. “Certainly there is opportunity to cross sell insurance related to those projects,” he explains, adding, “that’s how it’s done.” John Del Santo, managing director of Accenture’s insurance practice, based in San Francisco, agrees that winners have, in addition to such management 101s as top down buy-in, invested to varying extents in CRM, risk assessment, and sales automation. “When you think of it, midsized banks have tended to do well traditionally because they have a deep knowledge of their customer base,” he says, mentioning Union Bank of California as a standout example of a company that is tapping the insurance needs of entrepreneurs. “IT can help the bigger banks compensate for their size to some extent and figure out their segmentation.” Product knowledge required Consider that when it comes to banks moving into insurance, they have had to grapple their way around a rich product set with tricky—and sticky—distribution networks populated by knowledge specialists. Still, banks are doing so because insurance can lead to stronger client bonds with an institution, says Del Santo. Going forward, say experts, the wealth management/retirement stratum will be a keen area of interest for many banks. Michael White notes that many bankers will want to help mass affluent types preserve wealth and engage in estate planning as many, many baby boomers begin to hit retirement. Terence Martin, vice-president and life insurance analyst with Conning Research and Consulting, Hartford, Conn., agrees that this demographic, personal-line niche is showing a green light. “Any bank that can stand out by filling in gaps in mass affluent coverage and let consumers manage their entire profile of risks, protecting their home and key assets, should do well,” says Martin. However tough the competitive tactics and environment, many banks are staying the course and, if not exactly getting religion on universal methods, they aren’t backing away from their commitment to insurance operations. BJ 50 SEPTEMBER 2007/ABA BANKING JOURNAL www.ababj.com/subscribe.html https://www.uboc.com http://www.conning.com http://www.conning.com http://www.bancinsure.com http://www.ababj.com/subscribe.html

Table of Contents Feed for the Digital Edition of ABA Banking Journal - September 2007

Contents Editor's Column Briefing: Why Money Sense is a Top Priority Briefing: Sleight of Mind Briefing: Snapshot: What the First Half Tells Us About the Second Half Briefing: ABA Resources ABA Chairman’s Position Briefing: Get Away and Get Ahead: ABA's Banking Leaders Forum Community Banking: Trim the Fat: Winning the "Battle of the Buck" Community Banking: Pass the Aspirin Cover Story: Meeting the Challenge of the "Unbanked" Bank Marketing: Don't Miss the Boom! On the Job: Time to Power Up Your Presentations? Insurance Sales: The Art & Craft of Cross Selling Tech Topics: The Price is Right? Tech Topics: Security: Protect Information First Tech Topics: Hackers for Hire? You Bet'cha Tech Topics: Case in Point: Tellers Scan, Too, at First Federal Compliance Clinic: Adverse Action Clarified The Economy Banker’s Mart To Advertise/Index of Advertisers

ABA Banking Journal - September 2007

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