Can a financial institution sell insurance to its customer base profitably? That's the question asked by ProfitStars in this paper which looks at the structural obstacles to success in bank-owned insurance agencies.
Over the past seven years, banks and credit unions have invested billions of dollars in buying, building or starting property and casualty insurance agencies. The returns from that investment have been decidely mixed, largely due to a structural misalignment between the financial institution and its insurance agency.
This paper explores in detail the findings from the most extensive analysis of financial institution insurance data conducted to date in the industry (representing more than 5000 referrals across 20-plus bank-owned and credit union-owned insurance agencies). These findings provide fresh insights into the business, and point the way for institutions that seek to drive improved returns from their captive insurance operations.
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