The American Council of Life Insurance, along with a number of strategic partners, is undertaking a survey of both insurance companies and banks with the aim of getting information that results in the sale of more life insurance through the bank distribution channel.
ACLIs partners in this venture are the Baker & Daniels law firm, KPMG LLP, and the C.F. Effron Company.
Speaking at ACLIs annual meeting here last month, Michael Lovendusky, ACLI senior counsel, said ACLI has sent out surveys to “thousands of insurers and banks regarding life, disability and long-term care insurance.”
ACLI has set up a bank insurance advisory group whose members include the following insurance companies: Aegon, American Health & Life, Commercial Union, GE Financial, Inviva/American Life of New York, Liberty Life, Marmaid, Nationwide, New York Life, Sage Insurance, Swiss Re and Transamerica.
Part of what this advisory group wants to accomplish through the survey, according to its statement of intent, is “to see where the gaps in perception and reality lie and, thereafter, to identify ways to enhance the commercial partnership” between ACLI member companies and banks.
Scott Harrison, partner with KPMG LLP, said the aim of the survey “is to enhance salesthats the bottom line.” To do this successfully, he said, the survey aims to “investigate the disconnects between banks and insurers.”
Reinforcing the message of enhancing the bottom line, Carmen Effron, president, C.F. Effron Company LLC, said, “Banks sold $37 billion of annuities last year, but only $2.3 billion of life insurance. So, obviously there is great potential.”
Charles T. Richardson, a partner with Baker & Daniels, reviewed some issues that were addressed with banks and what initial survey results have shown.
Among these issues, Richardson said, were the kinds and characteristics of life products that banks want; the value-added services they need; the compensation and revenue they want; what banks key performance indicators are; the regulatory hurdles banks see to their insurance business; and other legal and/or privacy hurdles banks may experience.
One of the initial findings that has become apparent through the survey, according to Richardson, is “the culture shock” that exists between the more transactional nature of banks business and the selling environment of insurance companies.
Another finding is that banks want insurers to “simplify the product and the product cycle,” Richardson said.
Additionally, banks have the attitude of “show me the money,” he continued, meaning that they want to see how insurance “can impact their bottom line.”
Banks are also interested, Richardson said, in what insurance companies can do to generate passion and enthusiasm for their products in the bank environment.
The survey has also shown that banks see the regulatory hurdles as a big problem, Richardson said.
Once the survey is completed and a report on the results is done, ACLI and its partners plan to conduct a bank insurance symposium in 2003.
Reproduced from National Underwriter Life & Health/Financial Services Edition, November 4, 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.