Small Business Is The Next Big Thing For Banks
By Valerie Jordan
Bank insurance programs are experiencing high activity as banks seek new ways to increase their revenues.
From this highly charged environment, the next segment of bank insurance customers is emerging. This segment–the small business and commercial customer–provides an unrivaled opportunity to combine an array of property and casualty products/services with those from the life side to fashion a single enterprise solution.
There are about 25 million small businesses in the United States, representing 99% of all employers. They employ over 53% of the private work force, totaling over $1 trillion in payroll. These firms typically have 10 to 50 employees, are privately held/family-owned and represent up to $25 million in annual sales.
There are two key points for bank-insurance reps to remember about these businesses: Many of them do not have an insurance agent; and all of them use a bank. What a prospecting gold mine for a bank insurance agency!
A bank agency can offer a single enterprise solution to small businesses via three different sales initiatives.
First, by using employee benefit programs (group and voluntary), an employer could get a customized suite of products aimed at many of its noninsured and underinsured employees.
Second, owners could offer benefit programs aimed at key employees, boards of directors and, most importantly, themselves.
Third, these programs could be tied to other profitable bank products such as savings and checking accounts and payroll deduction services.