Life insurance is starting to see some success in banks, but it remains a difficult sale compared with conventional investment products for bank reps, primarily because it takes longer to wrap up and involves probing into people's health issues. But the effort may be worthwhile for programs that want to expand their product mix and increase revenue. "Life insurance is the final frontier for bank investment programs," says Bruce Stava, who runs a successful life insurance sales program at First Bank, based in Creve Coeur, Mo. "It's an untapped opportunity, but most bank programs haven't figured out how to get enough out of it."

Some banks have cracked the code, though. Here are six bank-based life insurance programs ranked highest by Kehrer-LIMRA, based on the amount of insurance revenue generated per bank customer household.

Life insurance is a relatively small piece of bank revenue compared with investment sales, which is already small-which is usually about 2% of deposits and checking, but was 8% last year due to the horrendous market. But there's a lot of room for growth, says Rich Hotham, vice president for financial institutions at Liberty Life Assurance. "Industry statistics show that the middle market is underserved, and the best source for delivery is through the financial institutions they have relationships with, through checking, savings, CDs and loans."

Perhaps most important, "it makes a customer that much stickier to the bank," says Scott Stathis, managing director and COO at Kehrer-LIMRA. "Insurance is more of a relationship sale, so it has good prospects for cross-sell and increases household profitability."

According to Kehrer-LIMRA, the top insurance programs in the country are BB&T, Astoria Federal, UMB, First Bank, Trustmark and First United Bank & Trust, in that order. These banks represent a range of program types. Both national giant BB&T and community bank First United Bank own insurance subsidiaries that employ certified life agents who do nothing but sell insurance. Much smaller Trustmark also uses insurance agents. Getting licensed bankers and financial consultants to add life insurance to their already jammed roster of things to do can be more challenging. UMB, Astoria Federal and First Bank have all succeeded because of a number of best practices. Chief among them is making sure that selling life insurance is not merely an add-on option, but a specific sales goal on which salespeople's performance is judged.

"The key thing is we view insurance as a standalone goal and demand accountability as a separate goal," says Frank Berkowitz, director of retail financial services at Astoria Federal in Lake Success, N.Y. "Other institutions commingle it with other goals, and it's a longer sale, so I think people tend to not do it." He explains that the bank started out with five primary sales goals and life insurance was one of them, right up there with consumer and business checking. "There's a lot of focus and accountability based on insurance sales," he says. "They're held to this from a performance perspective."

You need to manage the expectations of both the reps and their managers, says First Bank's Stava. "I build it into managers scorecards that I want to see 'X' amount of insurance activity."

To help reps meet those goals, top banks programs deploy a lot of training and support for insurance salespeople. At UMB, bankers are licensed to sell basic life insurance and fixed annuities. Each agent goes through the exact same training and over the course of the year receives one-on-one attention from the head of the program, additional mentoring meetings and quarterly trainings, says Markus Bigbee, senior vice president and vice president of retail sales at UMB's insurance division in Kansas City, Mo.

Every licensed banker participates in courses that cover sales skills, suitability, regulations and products. There are ongoing conference calls, emails and a program of visits from the six external insurance wholesalers as well as access to six internal wholesalers. Reps aren't judged by sales goals per se. "It's not that you have to sell a certain amount of insurance, because the needs of the customer have to come first," says Bigbee. "We're looking at whom life insurance was presented to and how consistently."

Mentoring is ongoing, says Bigbee. "If you take that salesperson and don't give them good training or support you will extinguish that behavior pretty quickly," he says. "If they feel inadequate, they're not likely to keep doing it."

TOP-DOWN SUPPORT

While training and mentoring mark top-flight programs, they won't survive without support from the corner office. "There has to be a partnership with the bank management team," says Hotham. "There are competing priorities at every level. If there isn't support at the top how do you influence reps to promote insurance?"

Commitment from the top also facilitates cross-sell between different bank units. At First United, life insurance agents work on geographic teams, each of which has a trust and investments officer, mortgage banker, commercial lender and cash management specialist. At monthly meetings each of these six to eight team members is required to bring a client referral to set up a joint call with another team member. Top executives, including the bank's CEO, sit on teams, says Val Teagarden, president and CEO of First United Insurance Group. "When you have an executive on the team it puts more teeth into the game and everyone sitting there is responsible for making it a success."

With the exception of Trustmark, which only sells insurance to affluent clients, all of these programs use multiple distribution channels and leverage technology to simplify the sale. Clients needing term or single-premium insurance are often handled by platform reps or in the case of BB&T, clients with life insurance needs up to $1 million are handled by a call center. "Ninety percent of the sales handled by the service center are term insurance sold by licensed agents," says Jim Farmer, chief financial insurance executive officer at BB&T Insurance Services. The more complex sales are handled by advanced agents in the local agencies.

At First Bank, insurance is sold at all levels. Platform reps handle term and single-premium, financial consultants sell premium and permanent life insurance, and the trust and wealth management channels sell life insurance for estate planning, small businesses and more complex situations.

Stava finds it most economical to "in-source" his life insurance program. He uses a bank general agency, which provides several regional insurance agents who specialize in working with banks and sit alongside brokerage reps and wealth managers in complex cases. "General agency is simple and cheap," says Stava. "Having internal dedicated specialists is expensive and you have to split commissions and support infrastructure." The client belongs to the rep or advisor and the insurance agent serves as the subject matter specialist. That way the advisor has access to highly experienced agents who can compete for multimillion-dollar clients against career insurance agents. Plus, the brokers he works with have relationships with 15 to 20 life insurance providers so that First Bank has access to a wide range of product options.

Whatever your program looks like, chances are your clients and your bottom line will benefit from adding insurance to the mix. Somewhere in the middle of these best-practice examples may be a strategy that works for you.

This story has been reprinted with permission from Bank Investment Consultant.

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