Cross-marketing between banks and insurance agencies remains largely virgin territory. Most of the potential has not even been charted, let alone mined.
In working with banks as partners, owners, or co-venturers, insurance principals should recognize the pros and cons of the affiliation to neutralize the negatives and build on the positives.
The positives include:
- a relatively large list of potential prospects
- the bank's reputation for financial strength, responsibility, and stability
- potentially greater size and volume that can be brought to bear when dealing with carriers
- efficiencies of scale
- the possibility of building a wider base of general and specialty lines (for example, Marine, Surety, estate planning, and charitable contributions) and producers dealing with them
The negatives include:
- customer concern that personal service deteriorates as agency size increases
- customer anxiety that the bank will use subtle coercion if insurance is not bought there
- inexperienced banking officers making major insurance decisions
- bank executives who consider the insurance operation a minor profit center and deny it the support it deserves
Addressing the pros and cons of the affiliation in many cases reveals the different, though related, functions of both participants. When each operation respects the other's function, the bank-insurance relationship thrives. The operations should be connected and close, but not homogenized or cannibalistic. And just as the bank may give valuable leads to the insurance sales force, so might the insurance operation bring important new prospects to the bank (for example, to obtain premium financing).
To demonstrate the potential for bank/insurance synergy, let's first consider seminars, still popular as proven workhorses of prospecting. Say P/C agency 'A' works closely with bank 'B.' B's mail stuffers invite its customers to seminars (free, but reservations required) presented by A. The noncustomer public is also invited through such media as press releases, radio spots, and public service announcements.
The seminar should remain generic-not self-promoting-until the end to illustrate how some common pitfalls may cause problems in P/C coverages (for example, gaps in coverage, or omitted or underinsured coverages); how little-known premium credits may be earned; how great differences in premium exist; and how a no-fee, no-obligation review can benefit each attendee. Illustrations should fit the audience. If it's a narrow-interest group such as physicians, then that group's specific needs should be addressed. On the other hand, if the audience is a mix of business, professional, and Personal Lines prospects, then the seminar illustrations should be of a similar mix. The seminar program should also include Life/Health topics, which are high on almost everyone's list of needs and interests.
Close the seminar with a presentation of the agency's strengths-such as the carriers it represents, its personnel, and its local involvement in civic affairs-and its commitment to earn business and loyalty through professionalism and dedicated service. Distribute brief seminar-evaluation forms with an option to request an appointment.
A seminar featuring travel to one or more sites, whether it's a nearby attraction or a tour half a world away, also can be highly effective. After whetting the attendees' appetites, the insurance presentation can illustrate how potentially significant savings achieved through the agency's professionalism can help fund such excursions. Life insurance is particularly dramatic: In some cases, the savings may be enough to fund most or all of the featured trips.
A charity may sponsor or co-sponsor the seminar, with the admission fee going as a contribution to the charity. The agency's Life specialist will discuss how donors can benefit by making planned gifts to charity, improving both their income tax and estate tax positions. A professional review of all coverages-P/C, Life, and Health-is offered, and the services of the bank's trust department may be offered where appropriate.