Stepping Into Each Other's Ring

Banks are making profits in the insurance market at the same time insurance companies are putting on banking caps.

A study by Datamonitor says bank activity in the insurance industry is growing at a compound annual growth rate of 31.5 percent. According to the study, insurance premiums sold through banking channels will reach $40.2 billion this year, $29.9 billion of which will be annuities, which Datamonitor calls "complementary to banks' core businesses in retirement and asset management."

The study found that the Top 50 banks in the country took in 70 percent of total bank insurance revenues in 1997.

Vice-versa
Meanwhile, Allstate Corporation, the parent of Allstate Insurance, the nation's largest publicly held personal insurance company, announced that Allstate Federal Savings Bank has opened its doors at the parent's Northbrook, IL, headquarters.

Initially, the new bank will provide electronic commerce services to the insurance company in the form of automated clearinghouse transactions for pre-authorized customer premium payments. It also will invest $15 million in redevelopment of urban communities, forming strategic alliances with community banks, financial institutions and development organizations. Plans for next year, however, include introducing personal trust and financial planning services; and the bank says it will be looking at what else customers need and regulators will approve.

Copyright © 1999 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 9, No. 4, 5/99