A new study concludes that life insurers need to do a better job of helping bankers fit life insurance sales into their daily routine.[@@]

The report, sponsored by the American Council of Life Insurers, Washington, offers recommendations from bank and insurance executives and other experts concerned that life insurance sales in banks have not grown as robustly as was expected 5 years ago.

The recommendations grew out of a series of workshops for bankers and insurance executives the ACLI sponsored last year.

Among the concerns that workshop participants raised was a continuing failure by banks to integrate life insurance products into their sales processes and a persistent inability of both banks and insurers to understand each others’ business.

Consultant Carmen Effron, author of the study, says the recommendations are aimed at getting both sides to collaborate more closely in reaching middle-tier and emerging-affluent bank customers, which are seen as potentially the most profitable.

The new study concedes that there may be inherent conflicts in the way banks and life insurers do business.

“The insurance underwriting process and the transaction-oriented nature of the sale at the bank branch often can be at odds with each other,” the study states. “For this reason, it is more incumbent upon the insurer to change processes to support the bank distribution model . . . than expecting the bank to fit into the insurer’s process.”

Among the study’s suggestions:

- Life insurers and banks need to do more joint business planning.

- Insurers should help bankers better understand the profits that can be earned on life insurance.

- Banks should consider making insurance a stand-alone business within their organizational structure.

Effron notes that both banks and insurers had hoped that sales would blossom following enactment of the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which removed restrictions on bank sales of insurance. So far, that hasn’t happened.

“Insurance companies have to be willing to be more flexible to continue to work with banks,” Effron said in an interview. “Banks do things really well if that involves small transactions, and they have their systems and procedures to do that well. Insurance companies must be willing to fit into that structure better than in the past.”