One hundred and thirty five applications were made between Jan.1, 1997 and May 31, 2001.
Insurance banks have an uphill battle to convince their customers to establish a bank account because it is hard to determine when and why an insurance customer needs a bank account.
The bank products are to be sold by the independent insurance agents that own their own agencies. The article describes how insurers can use the banks' customer base to reach new customers.
Banks have the trust of their customers and that would be a good distribution channel for life insurance, especially in the midlevel or mass market.
Diversification benefits and product complementarities (i.e. mortgage and mortgage insurance, auto financing and auto insurance) seem to be the prime motives.
However, some earlier research also suggests that there are few linkages between bank services ands underwriting services in terms of customers, outlets, or other characteristics that generate efficiencies.
The author acknowledges that the extent to which different business activities are fundamentally distinct induces a tradeoff between diversification gains and loss of efficiency.
The research considers life insurance, property/casualty insurance, securities, and commercial firms as potential matches for firms and concludes that potential diversification gains arise from almost all combinations involving banking and insurance.
Banks could represent 3-4 different insurers therefore the insurance products need to be competitive (for the customer and the representative) and specific for bank employee selling.
Furthermore, stable relationships are necessary and the product needs to be branded and well advertised.