Insurance Helps A Bank Capture The Small-Business Client

At First Tennessee Bank, one of our cross-selling strategies is to offer insurance products to small businesses and other commercial accounts.

Because the banks commercial relationship managers have developed a trusting and loyal customer base of business owners, they are the key players in integrating insurance with the banks other financial services.

Educating these RMs about the needs of their commercial clients and the potential impact of death or disability on the clients business and family–and, sometimes, the banks loans as well–has enabled the RMs to understand the basics of why people buy insurance. This has helped them to have simple, common-sense discussions with their business clients to uncover specific needs where the bank can offer solutions.

To have a successful relationship with a commercial account, the bank must overcome a number of challenges. The primary challenge is to earn the trust of the RM in the banks ability to both offer competitive products and, more importantly, to add value to the relationship with the business client–whether the client buys an insurance product or not.

Management support at all levels in the bank is needed to break down any barriers that may limit the relationship manager’s access to business customers. Financial planners and investment officers must then work as partners with the RM to address the business clients insurance needs.

A successful tactic is to have the RM introduce–and not simply refer–the insurance specialist to the client. Actively involving the RM assures the client that he is not simply being subjected to a hard sell, but rather is dealing with a professional who can affect the success of his business and the financial well-being of himself and his family.

After a few joint appointments, the RM will start sending sales leads to the banks insurance specialist–such as the client with an unfunded buy-sell agreement; or one who wants to talk about the impact of estate taxes on her family business; or one who, because of limits on contributions to his 401(k), is very interested in talking about a non-qualified plan.

The payoff from this approach, then, is seeing the RMs go from simply referring clients without knowing their needs to actively prospecting them for added business. That is a major tactical change.

In the past, our insurance specialists waited for an insurance sale opportunity to present itself while RMs were in front of their clients. This year, the insurance specialists are going to the RMs, describing the prospect as the center of the bulls eye and then going over the RMs client list to determine who may benefit from a face-to-face meeting.

Joint calls by the RMs and insurance specialists establish rapport among clients and build their confidence that they can trust their banker to address their insurance needs.

Products and services available through many banks enable them to provide products for retirement plan distributions, 401(k) plan administration and funding and employee benefit packages. Our insurance agency, recently expanded with our banks acquisition of a commercial insurance agency, can handle personal and business insurance solutions at all levels.

Banks are becoming one-stop shops for financial services. By employing insurance experts within their communities, they can break through old barriers to the cross-selling of insurance products.

Our bank has focused on finding successful insurance agents with 10 or more years of experience with designations of CLU, ChFC, and CFP. The complexity of insurance programs for business owners requires this caliber of producer, to establish the credibility needed to open doors and close sales.

Employing professionals committed to their clients from an “All Things Financial” perspective has enabled our bank to tap into its commercial customer base. The banks insurance specialists develop solutions that benefit the employer, its employees and the financial institution, ultimately strengthening the relationship between the client and the bank.

Jeff Boone, CFP, is vice president and national sales manager of insurance products for First Tennessee Bank, Memphis. His email address is jnboone@ftb.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 18, 2002. Copyright 2002 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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