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Wary of buying an additional agency but eager to glean more revenue from commercial clients, a Memphis bank has teamed up with Financial Keyosk Inc. to sell insurance to its small-business accounts.

Union Planters Bank already had an internal agency selling personal lines but wanted to get into commercial lines and decided the best way to that was through the Financial Keyosk model, says Joanne Collins, president of Union Planters Insurance Agency.

The alliance with Financial Keyosk, in Carpentersville, Ill., began with a modest pilot effort that has proved promising, says Collins, a former insurance company executive whom the bank recruited last year to head up its insurance unit.

Rather than acquire an agency with commercial insurance expertise, says Collins, she decided it was far more cost-effective to team up her agency with Financial Keyosk.

Since April, Financial Keyosk has provided Union Planters with two experienced agents, one in Memphis and the other in Atlanta, to help it expand insurance sales from a modest line of personal products sold through its in-house agency to a wide array of commercial lines.

Financial Keyosks agents sell over the phone or right out of the banks local branches, says Collins.

The company uses Internet technology to provide banks as well as independent insurance agents, affinity groups and others with a virtual agency platform.

Its agents are hired locally and can reside anywhere in the country, which means advisors in a bank like Union Planters can get local support from licensed agents trained in local business practices, standards and regulations, notes John Dawson.

Products offered by Financial Keyosk include commercial property-casualty insurance, workers compensation, and group benefits such as life, health, and 401(k) programs, along with a variety of personal lines.

Dawson, CEO of Financial Keyosk, says his company provides an automated system for prospecting, selling, completing applications, receiving quotes and managing agency administration he refers to as Virtual FK.

Its platform offers 20 well- rated insurance companies, whose products are sold through a customer call center staffed with 40 licensed professionals.

“Under our model, we can parachute our producers right into banks, so they act as a bank employee,” Dawson says. “Branches across the Union Planters organization can receive local support from licensed professionals trained in local business practices, standards and regulations.”

For its part, Union Planters offers 200,000 commercial customers in the 12 states where it does business.

Under the pilot program, the two Financial Keyosk reps work through the banks lending officers to cross-sell small businesses on business owner policies, workers compensation and commercial auto products, along with group health and other employee benefit plans, as well as term life insurance.

Financial Keyosk hired the reps, with input from bank agency executives, Dawson notes.

It can quickly hire more as the bank expands the program, Collins says.

That should be soon. Results in Memphis impressed Collins to the point where she is ready to try a similar effort in one of the banks Midwest branches within a few months, she says.

Financial Keyosk offers products from such carriers as the Principal Financial Group, Des Moines, Iowa; Kemper Insurance Cos., Long Grove, Ill.; and Zurich North America, Schaumburg, Ill., a unit of the Zurich Financial Services Group and the parent company of Financial Keyosk.

“For a bank to sell insurance, integrating an agency doesnt pay off,” argues Dawson. “The decision banks have to make is, trade insurance on our own, or outsource? And, if you outsource, can you keep the same quality as inside people would give you? With our model, you maintain control, but the capital requirement is a lot less than with having your own agency.”

Financial Keyosk is off to “a slow start,” Dawson acknowledges, due to a need to hammer out privacy concerns, revenue splits and other contractual issues with clients like Union Planters. He expects, however, to announce additional bank deals soon, including one with a bank on the West coast and another in the East.

“Were happy with the sales potential of banks, and its surging ahead,” Dawson says. “We use the analogy that theres a lot of gold in bank customers, but you have to get through a lot of granite before you get to the gold. It took us six to eight months to get rolling [with Union Planters], but its starting to work. “


Reproduced from National Underwriter Life & Health/Financial Services Edition, July 8, 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.