More than 60 community banks around Louisiana are joining to sell insurance in rural areas, the Associated Press reported.
Bankers Insurance Center has an agreement to buy one Monroe insurance agency, and plans to buy others in strategic areas throughout the state.
“If we do this right, I don’t see how it can’t be successful,” said Clyde White, chief executive of Ouachita Independent Bank, one of the member banks.
The organizer, Albert Christman of Guaranty Bank & Trust Co. in Delhi, said the group hopes to attract large insurance carriers.
Bankers Insurance has an agreement to buy Troy & Montgomery Insurance, a century-old independent agency in Monroe. Its president, Eugene Montgomery, will act as the new company’s president and chief executive.
He is scouting agencies like his own. “Our job is to build a structure where all the banks can operate easily,” Montgomery said.
Banks have had mixed success in the insurance business since federal law let them enter it in the 1990s.
Ouachita Independent tried unsuccessfully in 2000, White said. “We think the reason this will work is because it will provide us with more purchasing power for more competitive rates.”
Christine Berry, director of the insurance program at the University of Louisiana at Monroe, said, “It’s attractive to insurance companies because they can deal with one corporation instead of 50 different agencies. An agency like Troy and Montgomery gives this new corporation an instant market share and relationships that have already been developed with carriers.”
Christman said banks in Virginia set up a similar venture six years ago, “and now it’s the second-largest writer of property and casualty insurance in the state.”
Troy and Montgomery already employs more than 30 workers.
“We’re absolutely in a growth mode,” Montgomery said. “Our plan is to expand the agency through the new corporation. Eventually I believe you’ll see our staff growing.”
The sale of his agency is scheduled to close Jan. 1, and Bankers Insurance Center will begin writing insurance sometime in the first quarter of next year.
Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Topics Louisiana
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