Banks taking over the life insurance industry?


1000 Post Club
Austin, TX
I have read some forums where people think the banks are taking over? What about the recent trend for large insurance companies to hire full service financial planners instead of just agents? Is the "life insurance salesman" a thing of the past? The guy who only has a life license, and maybe health, but does not mess with the series 6 and 63 {selling variable} license- is he obsolete? All you have to do is watch TV and it is apparent- the insurance companies want to handle the retirement income of the baby boomers. Seen the Dennis Hopper spots lately? Those are actually pretty good. It seems as though the business is headed towards having a one stop shop, one place to invest, protect, and park your money. And, this same place handles your checking account business- as well.
I believe there is a need for the individual insurance agent, at least for the next few years. At the same time, I would keep some options open in adapting to new ways to do things.

Many P&C agents are picking up financial services. Makes some sense, a P&C agent protects a persons assets, why not help them grow their assets? It also helps tremendously in retention.

Since I've been in this business, I've realized 2 things, people don't want to buy insurance online (yeah, some do, most dont) but they will shop for it online, they quickly get overwhelmed. The second is people don't like banks for anything but banking. They may buy insurance there because it's convenient, but I think most people feel like the bank is to much in control, and people like feeling as if they are in control.

An agent that offers financial services tends to do pretty well, over time. An agent that offers banking, well, I have no idea, though State Farm agents tend to do pretty well.

Banks have had very limited success in the insurance field. The ones who have done reasonably well did so by purchasing existing agencies.

I have a friend who went to work for a bank probably 15 years ago and he has done well. His market is seniors and he sells mostly annuities.

WAMU came to Atlanta a few years back and offered "full" financial services. Banking, insurance, investments, mortgages.

They still offer banking but insurance & mortgages are all but gone. In fact, the local branch I use passes out my business cards when someone asks about health insurance.

I don't see them as a threat.

As for agents who don't have a securities license, you are probably going to be limited. There will always be a middle & low income market for life products but the high end market will continue to be controlled by agents who have a wide range of financial services.
I agree that banks do not post a serious threat. They'll sell their shares of CDs, but are generally not where the sophisticated investor parks his/her money.

Large insurance companies want their reps to be the complete financial advisor to the client. Auto, Home, Life, Health and most and pension planning. A Series 6 and 63 are musts.
21 years ago I came into the business, never even fathomed getting my 6 and 63. Now, when I interview, most captive large companies tell me, "Of course, you are going to have to get your 6 and 63.... it's good you have life and health, but..."

I guess times they are a changin'.
does anybody know of a good place to do business with your 6 and 63?

By that I mean one that doesn't threat you like an employee without the benefits of being one?

A one time I used Safeco for my securities business. They spun that off and after a few years the new company is creating sales quotas for "independent agents" which I disagree with. Anybody out there still that doesn't play that your an "independent contractor, but you have to meet xyz sales" I always felt taking a hefty cut of the commissions was enough.
I'm not sure what you consider "taking over" however, banks are making a huge impact.

I ran the insurance business for a local bank two years ago and we generated approx. $800K in target premium in 10 offices (not all were participating) While it may be true that clients typically do not expect insurance to be sold in banks, it is much easier to cross-sell a new product to an existing relationship.

I still believe there is plenty of business out there for everyone but it makes it that much more important to take care of our relationships so they do not leave.