Many insurers would agree that financial services convergence-the integration of bank, brokerage and insurance products sold under one roof-has not matured to the degree many had hoped four years after the passage of the Gramm-Leach-Bliley Act.The new director of distribution for The Hartford Financial Services Group's life insurance business, however, believes there is a great deal of untapped opportunity ahead-particularly relating to an insurer's ability to market products at the bank level. The key to the effort: make it as simple as possible for bank representatives to push insurance products out to their customers.

"I'm convinced banks represent a great opportunity for us," says Jeffrey Carleton, recently named senior vice president and director of distribution, for The Hartford's individual life insurance division. "We have established solid relationships with bank partners."

In addition to bank opportunities, Carleton has responsibility for selling life products in wire houses, regional and independent broker-dealers and independent agencies.

Banks in the past took a stab at selling insurance products at the branch level, Carleton explains, but many discovered they lacked the expertise to execute the job. As a result, many banks began acquiring broker-dealers. "Overall, I think that banks are still trying to figure out the best point of entry to engage insurance selling," he adds.

One motivating factor to get banks to more readily adopt insurance programs at the branch level, Carleton explains, is to make life products more simplified. Part of that means providing banks with a program that takes the underwriting burden off a bank's shoulders during application processing and placing the onus on insurers.

"We believe we have a program in place where a bank sales rep would not have to be significantly trained in selling life insurance to build a stable business," states Carleton.

IT at forefront

Making life insurance more appealing to bankers is precisely what Carleton expects to accomplish. Prior to joining the Hartford, Conn.-based company, Carleton had been an executive for Springfield, Mass.-based MassMutual, where he established an expertise in mass-channel distribution.

In joining The Hartford, Carleton has a chance to build on what is already regarded as a highly successful program within banks: The company increased sales of its life insurance products through banking affiliates by 100% in 2003 and then upped those sales figures another 50% so far in 2004.

In 2003, Hartford sold $196 million of individual life, including variable universal life, universal life, whole life and term life. Its bank sales in 2003 were $33.5 million. The company would not disclose how many banking partners are currently in its network.

Not surprisingly, the implementation of technology is at the forefront of the effort: The Hartford is making available to banks an electronic application directed at potential insurance customers and current bank customers. The e-application enables information gathered at the bank to be automatically captured and transmitted from a bank's system into a Hartford database where it can be instantly reviewed.

The upshot, Carleton states, is that "we're able to reduce the typical life insurance transaction, which includes the process of taking an application to getting a policy issued, from 45 days to 30 days."

Here's how the process works: While meeting with a customer about a banking matter, a bank representative determines whether a customer has a particular life insurance need.

The customers that banks are consulting with are ones that The Hartford regards as prime candidates to acquire life insurance. These individuals are what The Hartford calls the "emerging affluent" clientele, who tend to be younger individuals seeking a combination of wealth management and protection services. Internally, this demographic falls within an initiative The Hartford dubs The Foundation program.

After asking a customer a few basic questions, the bank representative captures the information and transmits it to a Hartford database. Once in the system, a sales person from The Hartford conducts a followup telephone interview with the prospect, gathering additional information about the prospect's personal health history and other pertinent data. The information is then routed to an underwriter for rating.

During this process, the bank rep that initiates the lead is able to check the status of the application from The Hartford's Web site. If the policy is sold, banks receive a commission that's based on a sliding scale.

Targeting affluence

In addition to its Foundation program, Carleton says that The Hartford offers another selling program through banks directed at what it call the "affluent" customer base, which typically is an older individual with more assets than a Foundation customer-and with different underwriting circumstances.

To cater to this customer, The Hartford uses its own internal team of 200 sales associates, who interact with bank partners on processing life insurance opportunities.

Carleton believes that one obstacle that has suppressed insurance sales at the bank level in the past has to do with consumer tendencies: Most are not conditioned to perceive their bank as a channel to acquire life insurance. This challenge will be dealt with in tandem with The Hartford's goal to flatten the learning curve for bank reps to more effectively sell life coverage, driven by the e-application solution.

"The best approach to selling life insurance in banks is to adopt a top-down and bottom-up strategy," Carleton concludes.

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