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By STEVE TUCKEY, who has written on insurance issues for a decade for several national media outlets

From the stocks and socks debacle of the 1980s to the Citigroup implosion of more recent times, the concept of cross-selling as a surefire path to bottom-line bonanzas has taken some hits over the years.

Wayne Walkotten, senior vice president for the Cleveland-area based MarshBerry consultancy, estimates that about between 2 percent and 4 percent of a bank's insurance revenue comes from referrals from its own banking operations.

"Conceding the fact that cross-sell activity has not yet driven wallet share, these leading banks look at cross-selling more as a long-term opportunity than for immediate results," he says.

Nonetheless, insurance has served as a sound financial investment for banks and realizes some of the strongest financial and operational performance of any distribution segment, according to Walkotten.

"It thus has been gradually integrated into bank culture and retains the commitment of bank executives," he says.

While the business still thrives, it has slowed down in recent years, according to statistics provided by Michael White Associates in conjunction with the American Bankers Insurance Association.

For the first six months of 2008, banking insurance brokerage fee income came in at $3.45 billion, down 1.7 percent from $3.51 billion in the prior year.

White does not keep any statistics on cross-selling activity, but did acknowledge that the leader in that area is Wells Fargo & Co., which grew out of the old Norwest Bank, based in Minneapolis.

"They (Norwest) were the first bank to think of their branches as stores in which products are sold and pioneered the concept of taking stock of all of their customer's financial needs," he says.

February 20, 2009

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