Banks sales of life insurance are often lackluster because their programs lack a clear strategy and a commitment from the top, concludes a new study conducted for Sun Life Financial Services of Canada Inc., Toronto.
Although life insurance in banks has strong growth potential, its current volume is limited, reports the study by Cast Management Consultants, Los Angeles. Cast concludes that product complexity, inadequate sales management and poor training are some of the problems facing banks in selling life products.
“Life insurance sales need to be viewed as a separate business, not just as another item on the banks menu of products,” says Robert Spadafora, president of Independent Financial Marketing Group, Purchase, N.Y., a Sun subsidiary that sells insurance through banks.
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“Simply giving banks access to life products is not going to provide the institution with a winning model,” Spadafora says. For the most part, licensed representatives who sit in the banks lobby tend to be more transactional than relationship-oriented, he notes. “When you get beyond simple term to more permanent insurance, they dont have the expertise to be successful,” he explains.
He notes that because the sales volume of annuities and mutual funds has been outstanding for many bank reps, they may reason, why bother to sell life? Several general approaches to insurance selling have been successful in overcoming these obstacles, the Cast study found. But the consultants say management must be willing to make a long-term investment to make them work. For large banks, one model that appears to work well is teaming up with an advanced agent to help sell high-end accounts, Spadafora says.