Big Dog wrote:I wouldn't worry about your commercial clients. Unless the bank-owned insurance agency hires an insurance heavyweight (i.e. someone that really KNOWS insurance coverages), the bank really can't compete on commercial clients.
As to "cutting a deal" with an insurer, can you say Spitzer! Insurance carriers will run scared of anything that even smells like this.
Will banks make inroads to personal lines client? Probably. Small commercial? Maybe. Your larger clients. I doubt it. Like I said, unless they hire some "heavyweights", they won't be able to deliver on what a good regional or national broker can provide.
Besides - think of the "quality" of service you get from your bank. As far as I'm concerned, I get better service at the ATM than I do walking into the bank...
Number one: affinity group programs are already a cut deal and that is what the bank is offering. the question arises, how deep of a U/W cut can the bank get the insurer to offer. Nothing illegal with it at all.
Number two: I live in a town of 300,000 people. The city's second largest insurance agency was bought up by a bank. Perhaps a few of the heavy weights stayed...just maybe.
Number three: small commercial is the base for many, many, many medium sized agencies. Personal lines is also a profit center for agencies. Banks are going to only take the business that is a profit center to them, easy to write, easy to service. That side of the business keeps many agencies alive.
The writing has been on the wall since 1984 when the S&L crisis took them all down. It took a while but the banks saw the crack in the wall. No longer are they happy with a 3% spread on their money. Now 23 percent of their profit comes from fees and the credit card business profit is obscene.
Exactly how much business will the banks be allowed to own and run. Answer: however much their lobby can spend to buy the most politicians.