Banks increased new life insurance sales by around 15% last year, according to estimates by research firm Kehrer-LIMRA.
That is similar to the sales increase seen in 2005, according to Kenneth Kehrer, who helped direct the study. The firm he heads, Kehrer-LIMRA, is a subsidiary of LIMRA International, Windsor, Conn.
Despite the growth, bank customer penetration in terms of sales per household remains low for life insurance products, notes Kehrer.
“The typical bank selling life insurance produced only $1.33 in new life sales commissions per customer household of the bank,” he says.
The 73 banks in the study reported an average profit margin for life insurance sales of 42% on average, compared to a margin in the typical bank investment sales program of 24% last year.
Most banks focus on only 1 or 2 routes to sell life insurance, such as financial consultants, licensed platform bankers, direct response methods, retail agents, advanced agents or referrals to outside agencies. However, some are expanding the number of such channels they use, the study found.