Bank insurance sales are taking an interesting turn. They are beginning to incorporate the Web as yet another distribution channel available to a bank’s customers. The traditional bank insurance model generally contained three types of insurance delivery mechanisms:
• Platform salespeople – banks hired either agents or bank employees with insurance licenses, including those selling credit insurance.
• Direct marketed insurance products – sold using statement inserts, direct mail, telemarketing or any combination of the three.
• Third-party sales and distribution via nonbank employees – those representing a third-party organization but working on behalf of the bank.
In the last case, bank employees would identify customer needs and refer their clients to these third-party salespeople. The Internet, especially bank-owned and -operated Web sites, is creating a new distribution channel for insurance products.
One way banks can accommodate this new channel is to partner with an individual insurer such as Progressive or Allstate, which recently launched its own Web site for consumers.
In partnering with a single insurer, banks have a trusted brand name and can provide their customers with the option of maintaining their insurance, along with other bank products, in one place – according to the theory of one-stop financial shopping.
The challenge with this model is that bank customers are presented with a single provider for their insurance, and as insurance products such as automobile, homeowner and term life insurance become “commoditized,” consumers will generally migrate toward the lowest price for each product. Unfortunately, if a bank chooses to partner with a single carrier, its customers are often not given the lowest price choice, thereby limiting the lowest price theory.
Another way for banks to accommodate the growing insurance option via the Web is to research and identify “insurance aggregators and fulfillers.” These companies provide the technology architecture to link a bank’s Web site to a number of insurance carriers that have chosen to “play” on the aggregator’s platform. This brings a desirable option to bank customers: competitive prices through choice, 24/7 availability, and complete fulfillment.
This model should include the private -label option – maintaining the look and feel of your bank’s Web site throughout the process – both online and offline. Aggregators provide online quoting and offline customer service call centers as an extension of your bank’s insurance agency. As technology improves and insurers become more comfortable with the Internet sales channel, online quoting will lead to online purchases – completely online.
Some insurers and aggregators offer online purchase only of auto insurance and limit the purchase of term life and homeowner to offline call center representatives. But using call centers is not new to consumers. They are already familiar with their current bank’s call center to check their account balances, order more checks or dispute an NSF charge.
Bank customers don’t just start quoting and buying insurance on your Web site once it is up and running. This channel is no different than other channels you use to market your insurance products.
Place your URL in communications targeted to your customers. This includes print advertising, checking and savings account statements, stand-alone direct mail campaigns and statement stuffers.
Increase exposure to your existing online customers by advertising on your site’s home page and, more importantly, leveraging other applications on your Web site, such as auto- or home-loan content pages where you can strategically place advertisements that would direct customers to the auto or home quote option on your site.
Consumers are driving the online insurance model. They want information available at a moment’s notice, with the ability to compare quotes from multiple insurance carriers in order to make an informed decision about their coverage options. Providing your own bank customers with these options gives them one less Internet site to visit while allowing them to purchase insurance on their terms.
• Thomas Munoz is vice president of national direct response marketing at KeyCorp Insurance Management Group, Cleveland. His e-mail address is [email protected]