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Banks Push Reps For More Profit Per Customer

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Insurance companies and banks have to provide support, focus and direction to their financial advisors to boost sales of their more profitable insurance products, such as single-premium life insurance, say executives in the industry.

Bank customers are used to doing business face-to-face, so theres a natural trust level there that can be built into added sales of profitable insurance products like single-premium life, according to experts.

“The perspective you have to give is that the rep is selling the customer a relationship,” says Carmen F. Effron, president of C. F. Effron Company, a Westport, Conn. bank-insurance consulting firm.

Training is the master key that opens up more of these sales, adds Robert J. Mittel, senior vice president, Dime Insurance Group, a division of New York-based Dime Bancorp. It is what turns financial and insurance reps away from seeking the easy, one-shot sale towards the more complicated one.

Typically, the single-premium sale takes three appointments before the sale is made, Mittel notes.

Once the rep makes her first single-premium sale, the battle is basically won, he says.

“In 90% of cases, that first sale is the minimum,” which in Dimes case is a $10,000 premium, he observes. “But over time, the average gets better and better.”

Perhaps 70% of reps who make that sale will become repeat sellers of single-premium products, he estimates.

Typically, the most successful reps in selling profitable insurance products have a strong commitment to needs-based selling. The bank has to reinforce that with incentives aimed at achieving specific goals in selling single-premium products or any other high-profit insurance or investment products it wants the reps to sell.

“You have to have incentives aligned with sales goals,” Mittel notes. “Incentives that are set up to reward activities [e.g., cold-calling prospects] are no good.”

To encourage reps to sell more single premium, Cal Fed Investments, a subsidiary of California Federal Bank in Sacramento, focuses on products with long-term care features, says Rachel Zaragoza, the subsidiarys vice president and product and marketing manager.

“We did co-branding with Glenbrook Life and Annuity Company [a division of Allstate Group, Northbrook, Ill.], and reps found it an easy product to sell.”

The important thing about selling more single-premium products is to convince reps to incorporate it into their sales process as they speak with customers.

The next step is to promote the product to the salespeople, she says.

Cal Fed takes a consistent approach to promotions. It focuses on one or two products at a time, then beats the drum through incentives, reminders and performance measurement of individual reps.

An important part of the approach is a continuous stream of information about how well the reps are doing. This is designed to motivate them through the whole two-month promotion.

“We send them a ranking report every other week, so they can see how theyre doing in comparison to other reps. And we give them a prize or gift for every sale [e.g., a baseball cap or T-shirt].” The gifts increase in value with each additional sale by a rep.

“Every time we had a promotion, our insurance sales definitely increased,” Zaragoza says.

When it first promoted the Glenbrook single-premium product under Cal Feds own private label, sales for the product tripled, she reports. Within two months, the company sold more than $3.8 million in premiums.

Last May, management focused on a long-term care product, Money Guard from First Penn Pacific Life Corp., Schaumburg, Ill. That promotion brought in $680,000 in revenue within two months.

“Our overall revenue last year was 10% in insurance, and this year were up to 14%,” says Zaragoza. “Just by making it simple and easy to sell, were definitely increasing insurance sales.”

Another dimension to single-premium products is that they represent a way for banks to get securities brokers interested in selling insurance, notes Valerie G. Jordan, president of financial service consulting firm Jordan & Jordan Associates, Belchertown, Mass.

“The ability through one payment to get all the coverages the customer wants makes it a smooth transition into insurance from securities and investments,” observes Jordan.

Making single-premium products attractive to brokers in banks is a promising route to more profitable insurance sales for carriers, she says.

“You have to train your agent to put together a program specifically aimed at brokers so that they will be able to talk about single-premium products. You need to make the comparison to the single-premium annuity and explain the benefits that a single-premium insurance product can fulfill for their clients–estate settlement, retirement, education or whatever their insurance need. And you must illustrate how it fits the need. “

Insurers and banks also need to provide broker-dealers a training program targeted specifically to them. And they must tune their sales process to the needs of the broker, she argues.

Brokers want the sales process to be fast, because they are still transaction-oriented, rather than relationship oriented.

“They dont like to wait for their money,” she says. “Make the sale easier, whether through a simplified application or streamlining of administration so the testing thats required from the underwriting standpoint is easily accomplished.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, October 22, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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