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Annual Conference Atlanta, GA October 8-10, 2003 Bank Insurance Referrals “The process of merging cultures” Presented by: DANIEL R. MEYLAN, ARM President, Peoples Insurance Agency Profile of Peoples Banks and Peoples Insurance Agency Difference in Cultures Differences in P&L Statements

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Annual Conference

Atlanta, GAOctober 8-10, 2003

bank insurance referrals the process of merging cultures

Bank Insurance Referrals“The process of merging cultures”

Presented by:


President, Peoples Insurance Agency

business and economic realities
Business and Economic Realities
  • Operating Profit is mandatory for insurance agency survival
  • To be profitable, an agency must generate between $85,000 to $150,000 of commission income per full-time employee, depending on location and product mix
  • Commercial Lines Insurance generates higher profit per account
  • Personal Lines Insurance is very profitable if volume is large enough
  • Employee benefit sales typically have the highest profit margins in a commercial insurance agency
business and economic realities7
Business and Economic Realities
  • Life Insurance and Annuities are always profitable with adequate volume
  • Each insurance product (commercial, personal, group, life) requires a dedicated expert in that product to maximize revenue and profit
  • The bank owned insurance agency should communicate their strengths to their bank partners and ask for referrals in those areas
  • Insurance agencies that rely exclusively on bank referrals for new business will fail
our referral program
Our Referral Program

Peoples Insurance Agency, Inc. will track referrals and production by location, by employee and report those results periodically to CEO’s and senior management. (Sample report attached) Referrals may be provided using the forms created for that purpose or by sending the pertinent customer information to Peoples Insurance Agency, Inc. A single person will be the clearing-house for all of the referrals. It will be their responsibility to maintain an up-to-date database of all insurance referrals. When a policy is sold, they will see that the appropriate individual and location is credited for that sale. The objective for Commercial Loan Officers is to refer every new commercial loan document (new, rewrite or renewal) to PIA. Recognition and rewards will be given to those individuals and locations that refer the highest volume of referral revenue or premium. CEO’s will be held responsible for the overall referral objectives in their areas of responsibility. Producers and staff of Peoples Insurance Agency, Inc. will be responsible for contacting each referral and making the best possible good-faith effort to sell an insurance product to individuals or businesses referred by a Peoples Banker. During the course of the year, training will be offered by Peoples Insurance to Peoples Bankers on the subject of insurance and how to look for and qualify quality insurance prospects.

establishing reasonable referral expectations
Establishing Reasonable Referral Expectations


  • Number
  • Revenue
  • Profit
  • Business Segment
  • Line of Business
  • Individual Banker
  • Branch
  • Organization
  • Target Closing Ratio
  • Track Non-Bank Referrals
tracking referrals
Tracking Referrals
  • Who
  • What
  • Where
  • When
  • Outcomes by individual
  • Outcomes by branch
  • Outcomes for the entire organization
tracking referrals13
Tracking Referrals
  • Ownership of the tracking system
  • Time and resource commitment to tracking system
  • Evaluation of the results
  • Accountability for the results
training the banker
Training the Banker
  • Basic insurance knowledge
  • Learning the referral process
  • The insurance sales cycle, what is a renewal date?
  • How to identify an insurance prospect
  • How to introduce a potential insurance prospect
  • How the insurance sales and marketing process works
training the banker15
Training the Banker
  • Insurance competition
  • Insurance service issues
  • Insurance marketplace issues
  • Insurance companies and products available in the agency
  • Qualifying a potential prospect
  • Time and resource commitment to training, bank and agency
training the insurance producer
Training the Insurance Producer
  • Communications with the banker who sent the referral
  • Involving the banker in the sale
  • Building one on one relationships with bankers
  • Referring insurance customers to the bank
  • Participating in commercial loan meetings
ethical issues
Ethical Issues
  • Bank customer may be a poor insurance risk
  • Insurance risk evaluation reveals poor business practices
  • Cancellation or non-renewal of bank customers insurance
  • Best coverage or cheapest coverage
  • Disclosure statements
  • Information sharing
  • Gathering underwriting information from bank client file
compensation for referrals
Compensation for Referrals
  • Part of bankers job description and performance evaluation
  • Bank Manager accountable for insurance production goals for their charter and branch
  • Stakeholders Program-Comprehensive Compensation Incentive Plan
  • Contributions by insurance agency to stakeholders program through agency profits
peoples insurance 18 months of results january 2002 to june 2003
Peoples Insurance 18 months of results - January 2002 to June 2003

% ofBank ReferralsAgency Total

Referrals Received 998Referrals Open (as of 6/2003) 26Referrals Sold 151 10.3%Premiums $728,158 11.8%Revenues $102,378 13.6%Closing Ratio 15.1%

Total Agency

New Accounts Sold 1,459 100%Premiums $6,189,724 100%Revenues $751,389

referral results sept 2003
Referral Results Sept 2003
  • Sept results when available
abc aviation success
ABC Aviation - Success
  • Sr. Commercial Lender introduces insurance producer to commercial borrower
  • Insurance Products Sold: Auto, Property, General Liability, Workers Compensation
  • Account Premium: $175,000
  • Account Revenue: $22,000
  • Time from Introduction to Sale – 10 months
billy s builders the unethical bank customer
Billy’s Builders – the unethical bank customer

Bank customer is large residential homebuilder. Bank is providing construction financing and loans on commercial real estate owned by builder. Insurance producer conducts an in-depth risk analysis and prepares underwriting submissions for insurance marketplace. Borrower has marginal reputation with insurance market due to adverse loss history and a standard practice of misrepresenting payrolls and sales figures to insurance underwriters. Insurance agency declines to offer a proposal.

insurance to bank referrals agency principle or community bank president
Insurance to Bank Referrals Agency Principle or Community Bank President

Bank acquires a platform agency with 2,000 customers in a community where it has no presence. A branch is opened and the insurance agency president, a high profile member of the local community, is named Community Bank President. After 30 months of operation the branch has:

  • $15m deposits
  • 15% of bank customers are agency customers
  • 30% of deposits are from agency customers
  • Construction underway for new bank/insurance facility
  • Understand your cultures
  • Establish a tracking system
  • Train both bankers and insurance agents
  • Establish reasonable goals
  • Build on successes, learn from failures
  • Be committed but be patient