Banks Need New Business Model to Boost Insurance Sales Dramatically: Consultants.

Business Editors

BRIMFIELD, Mass.--(BUSINESS WIRE)--May 2, 2001

Banks could sell far more insurance to both affluent and average customers by setting up a two-tiered sales force, say Maria Thomson and Alan Wade of the consulting firm Thomson Management Solutions, Inc. They developed their new business model, adapted for the American market from best practices of successful British "bancassurers," following a fact-finding trip to Western Europe.

Upper-tier advisers, serving high-net-worth and corporate clients, would have securities and insurance licenses and perhaps the Certified Financial Planner(R) designation, they write in a recent article in the National Underwriter.

Lower-tier advisers, licensed for insurance only, would provide basic financial advice, sell insurance products to other bank customers and serve as bank customer service representatives. They'd refer clients needing more advanced services to the elite group.

The lower-tier group "can be trained to provide advice on a full range of financial products, especially with the help of well-designed software and advanced sales support from the insurer's home office," Thomson and Wade write.

Their counterparts in British banks perform CSR duties, develop comprehensive financial plans, process loan applications and sell various products, including mutual funds, term life, critical-illness insurance and the British equivalent of IRAs.

"Amazingly, they learn to do all this with as little as two weeks' training. With the help of proper software aids, we have no doubt that middle-market advisers for U.S. banks could be set in place offering a wider range of insurance products than available now.... Senior sales personnel in the bank could provide any assistance required for advanced products, securities or complex financial situations."

Such a system could be structured to meet all state and federal regulations.

Insurers would have to provide streamlined insurance products and efficient point-of-sale application processing to make the two-tiered model work in banks, they point out.

"What's Needed To Create The 'Ideal' U.S. Bancassurance Model?" can be found online at www.nunews.com/archives/lh_archive/2001/l04-02/l200114whats.asp.

Thomson Management Solutions, Inc., (www.tmsolutionsinc.com), a national consulting firm based in Brimfield, Massachusetts, helps insurers and banks develop effective bank insurance operations. For more information, contact TMS at [e-mail] or 413-283-5316.