A Ray of LIght for Banks: Record Insurance Sales

American Banker | August 9, 2011

Insurance continued to be a bright spot for banks in the first quarter, as guarantees lured customers and banks ramped up their sales efforts.

Insurance brokerage income at bank holding companies was $3.98 billion, up 19.8% from $3.32 billion in first quarter of 2010, according to the Michael White-Prudential Bank Insurance Fee Income Report. That quarter and the one before it have produced the highest totals ever recorded for holding companies' insurance brokerage fee income, according to the report.

Income grew strongly on a quarter-to-quarter basis as well. First-quarter 2011 income was 10.6% greater than fourth-quarter 2010 income, according to the report.

"I think it's the same thing we've seen since the whole financial crash started, which is the flight to guarantees," said Carmen Effron, president at CF Effron Co., a bank insurance consulting firm.

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Bank Insurance Consultant, Carmen Effron

SNL | July 22, 2011

Insurance gets no respect, that is, within the banking system.

"Having run bank insurance programs here and in Europe, I can say that insurance does not get the kind of attention it needs and deserves because usually it is not big enough in terms of bank's overall revenue stream," said Carmen Effron, a bank insurance consultant and president of C F Effron Co. LLC.

In recent years, Effron, who was formerly president of BankBoston Insurance Agency and president of NatWest Bank's U.S. domestic insurance operations prior to their acquisition, has been helping financial institutions assess bank insurance opportunities and remove distribution channel roadblocks through sales process redesign.

In an exclusive interview with SNL, Effron discusses the challenges of distributing insurance through banks and what she believes is important to running a successful bank insurance program.

Read the edited transcript of the interview

Effron Company Releases Innovative Research Aimed at Bridging the Cultural Divide Between Financial Institutions and Insurers^TM

Google Finance | April 25, 2011

"The Effron Company, a leading consulting firm specializing in financial institution insurance, has announced the release of its latest innovative research. Entitled "The 2011 Bridging the Cultural Divide Study," this is the fourth in a continuing investigation of the elements that are creating barriers to success for financial institutions in offering insurance products, while highlighting recommendations to support the growth of a vibrant financial institution insurance market. The study, performed in cooperation with the Bank Insurance and Securities Association (BISA), was sponsored by Affinion Group, HSBC, VantisLife, Lincoln Financial Group and Prudential.

The Study sent essentially the same robust questionnaire to hundreds of banks, credit unions, insurers and managing general agents (MGAs). Nearly 150 institutions were included in the final research, including: 1/3rd of the top 25 financial institutions; more than half of the life insurers in the financial institution marketplace; and 32 MGAs that support the intersection of financial institution, insurance and investments."

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Lack of Training Impacting Bancassurance Sales

riskinfo.com.au | August 5, 2010

"Gaps in the availability and effectiveness of bank salesperson training is contributing to reduced levels of life insurance business being written through Australia’s major banks, says a recent study.

According to RGA Reinsurance Australia’s 2010 Australia Bancassurance Study, bancassurance in Australia is well-entrenched, but is subject to what the study refers to as ’significant growth challenges.’

The study also identifies a gap in the availability and effectiveness of client data mining technology which, when combined with the lack of sales training, have an impact on prospecting of sales leads and the actual selling of life insurance business.

According to the study’s authors, specialist bancassurance consulting firm, C F Effron, the impact on bank customers of this gap in training and technology translates into a lack of awareness:  ”Bank customers are still less aware than expected that they can buy life insurance through their banks."

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Bancassurance in South Africa is expanding — yet significant cultural gaps remain between banks and life insurers

FAnews South Africa | May 2010

"Banks and life insurers in South Africa agree that bank customers are more aware of bancassurance today than they were three years ago, yet significant challenges remain as the two industries work together to sell insurance through banking channels, according to the 2010 South Africa Bancassurance and Credit Life Study “Bridging the Cultural Divide Between Banks and Life Insurers.™

The study, sponsored by RGA Reinsurance Company of South Africa (RGA South Africa), was conducted by C F Effron Company, LLC, in the first quarter of 2010. It compared and contrasted the opinions of 18 banks and life insurers regarding various aspects of bancassurance. A similar bancassurance study in South Africa was sponsored by RGA in 2007."

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Are insurers and bankers on the same page?

FAnews South Africa | April 2010

"The report is compiled by an independent US-based bank insurance consultancy firm, C F Effron Company LLC. Company president Carmen Effron was on hand to discuss the findings after a survey of South African companies, including 13 insurers and five affiliated banks. An identical questionnaire was sent to participating banks and insurers in which they were asked to respond to a range of statements using the familiar 1 to 5 scale. The average response from banks is then subtracted from that of insurers to reveal a ‘gap’ which indicates how far apart bank and insurance thinking is. A ‘gap’ of more than 1.0 points indicates a significant culture divergence. The overarching objective of the research is to answer the question: How do we make banks and insurers work more effectively together? “They’re two very different businesses – they do things in different ways – but they do have a common purpose,” says Effron."

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White House Policy May Lift Banks' Annuity Sales

American Banker | Jan 27, 2010

Analysts applauded the initiative and said it could significantly increase annuity assets this year and beyond. Carmen Effron of C F Effron Co. LLC in Weston, Conn., called it a "stamp of approval" for the annuity industry.

"Any time you get the government behind a program, it is an enormous boost for business," she said. "Think about what happened with IRAs and HSAs when the government supported them. Any time the government takes an interest in a financial product, there is an influx of information and publicity. People are going to be talking annuities, and this creates a tremendous opportunities for individual annuity carriers."

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Bank Insurance Marketing to the Middle Market Consumer

The Official Society of Actuaries e-newsletter of the Marketing and Distribution Council | January 2010
By Carmen F. Effron

"Forget what you hear about the banks' eminent demise, there are still over 8,100 banks doing business in the United States. To be fair, the top 10 have 50 percent of all the assets and the top three have 33 percent of the assets; however all of the banks regardless of size are dealing with the middle market consumer every day. Are the largest banks in the country distributing insurance to the middle market; the answer is yes.

From the banks' perspective the middle market consumer can be anyone where annual household (HH) income is above $35,000 and up to $150,000. LIMRA uses HH annual income from $35,000 to $99,999 and ages 25 to 64 as the middle market and estimates 41 million U.S. HH fall into this category. President Obama's definition concentrates on defining the highest level of annual income for the middle market as $250,000. In a recent nationalpayrollweek.com survey of close to 40,000 adults, 57 percent said that this top income level is too high and should be lower, while 32 percent of the people surveyed agreed with the Obama standard. Obviously, there is no set classification of the middle market consumer, so for this article we will use the LIMRA definition of middle market."

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