Life insurers continue to face resistance in their quest to sell more polices at banks, a condition largely marked by a lack of technology standardization between banks and insurers, as well as a lack of simple awareness on the part of bank customers.This ongoing struggle was detailed in a recent study by Washington, D.C.-based American Council of Life Insurers (ACLI). The report, titled "Catalyst for Change: Next Steps in Bridging the Cultural Divide Between Banks and Life Insurers," offers specific proposals designed to support the growth of a vibrant bank insurance marketplace. "Creating the successful bank life insurance blueprint involves a series of detailed and precise actions, procedures and processes," states the report, which offers 21 marketing and distribution recommendations for enhancing life sales in bank branches.

The recommendations were derived from three ACLI-sponsored workshops in 2004 with senior executives of banks, life insurers, consultants, professional advisors and industry experts.

The common thread and organizing principle of the workshops, the report reveals, was "to bring people together to talk about the nuts-and-bolts of selling life insurance to the middle-tier and emerging affluent retail market."

ACLI's report expands upon findings originally chronicled in a 2003 ACLI Bank Insurance report, which found a lack of IT systems integration between banks and insurers at the point-of-sale-a hurdle that still exists.

In short, bank representatives do not understand the life insurance needs of their customers because profiling is often an exercise in futility.

ACLI states that a viable solution would be to standardize bank/insurer processes, an effort that could be supported by browser-based technology.

Using such technology for customer profiling ensures that appropriate questions are asked in the initial stages of a customer consultation and mitigates redundant data entry.

Moreover, the integration of a centralized database that houses bank customer information could be accessed by a bank representative during a consultation with a customer and improve cycle-time efficiencies, the study concludes.

For example, The Hartford Financial Services Group increased individual life insurance volume through the banks by 100% in 2003 and 50% in 2004.

The Hartford, Conn.-based insurer attributes the results in part to the development of an integrated electronic application tool that captures customer information at banks and then routes the information to the insurer's database for further processing.

The result is that new business can be processed in 30 days rather than the customary 45 days, says Jeffrey Carlson, senior vice president and director of distribution for the Hartford's individual life insurance division.

Moreover, bank reps can monitor the application process from the Hartford's Web site (see "The Hartford Takes New Exec's Selling Strategies To The Bank," December 2004).

Consumer awareness

One revelation of ACLI's report is the lack of overall consumer awareness that life products are even available in the bank branch.

ACLI referenced a study by LIMRA International, Stamford, Conn., that noted if customers were universally aware that life products are available, life insurance sales could increase as much as 75%.

Low- to middle-income families, affluent singles and dual income/no-kids segments are among the market segments that would acquire life products from a bank, according to ACLI's report.

Another imperative according to the report is a "joint business plan" for banks and insurers to achieve a "vertical buy-in" of life products at banks. This would be useful to clarify roles and expectations, define success criteria and identify important economic drivers to market life insurance at the bank level, the report states.

Overall, the report places the onus on insurers to go deeper into the bank management structure and ensure that the insurance process not only fits into the banker's daily routine, but also supports and enhances the incentive, reward and referral process already in place, particularly if multiple channels are will be used to sell the product.

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