BISA Magazine - Quarter 1, 2015 - (Page 15)
aybe the whole bank
needs to be rethought.
"Banks have not been
successful in marketing life insurance products," said Marc
A. Vosen, president and CEO of Key
Investment Services, the retail investments unit of KeyBank (Cleveland),
even though the industry has been talking about it for the past 10 years and
longer. "The needle hasn't moved."
"If you look at life sales in banks and
you strip away single premium whole
life insurance (SPWL)" - just an annuity with a death benefit, in the view of
many - "and you strip away instantissue term life," then the share of program revenues from what is left (i.e.,
recurring life insurance) "is less than 1
percent, which is terrible," Vosen said.
"Investment professionals are not
insurance professionals," Vosen stated.
"They don't want to be insurance professionals, and they don't know how to
be insurance producers."
Needle Hasn't Moved
Life insurance began gaining traction in
retail bank investment programs about
10 years ago, according to consultant
Frank Berkowitz, but in the past two
years, it has stalled; indeed, it began declining, according to recent Bank Insurance and Securities Research Associates
(BISRA) numbers. That is disturbing,
according to Berkowitz, who conjectures
that many institutions are giving up.
The needle hasn't moved? "That is a very
fair statement," answered Berkowitz,
who used to run the investments and
insurance program at Astoria Federal
Savings and Loan (New York), where
he was considered one of the more
successful life insurance practitioners.
Overall, "you can't argue with the
numbers," agreed Robert J. Mittel, vice
president at Prudential. That said, "We
do see results among some depository
institutions that have committed to best
practices." Insurance now accounts for
20 percent or more of brokerage program revenues at institutions like First
Tennessee, First Niagara and Astoria
Federal; and this goes beyond SPWL
and instant-issue term life, Mittel said.
These are institutions that have been at
it for some years, he added; 18 years or
more in some cases.
Berkowitz isn't quite willing to give
up, either. Banks cannot lose sight of
the big picture. Banks want to become
their clients' trusted advisor, after all,
"but if we go through that whole [financial planning] process, and identify
needs, and if we're not also doing life
insurance, then we're doing that client
"Financial advisors are often kicking
and screaming about life insurance,"
added Berkowitz, "but you have to
make them do it, because it's the right
thing for the customer."
Licensed bank employees (LBEs) can
sell inexpensive life insurance policies,
Table of Contents for the Digital Edition of BISA Magazine - Quarter 1, 2015
BISA Magazine - Quarter 1, 2015