Wednesday, February 21, 2001

Banks Turn to Portals to Target $43 Small-Business Insurance Market

North America’s 7 million small businesses will spend $43 billion on insurance in 2001, and banks are increasingly looking to reach this profitable market via the Internet, says a new report from Meridien Research.

“Since shopping for insurance isn’t an everyday occurrence, financial services portals are an ideal delivery mechanism,” said Dave Potterton, research director at Meridien.

“Including insurance as part of a complete package of financial services is just one means banks will use to cement existing small-business relationships and forge new ones. The use of targeted portals lets banks offer a single access point to more sophisticated cash management, brokerage, and insurance services.”

In looking to add small-business insurance services, financial institutions basically have two choices—to merge/acquire or to partner/outsource. Meridien has found that banks are, in fact, employing both strategies, acquiring insurance agencies and entering partnerships or outsourcing arrangements with insurance carriers, agencies, and aggregators.

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