Insurers are getting deeper and deeper into the banking game. Although the original impetus of recent regulatory changes was geared at the consolidation of financial, banking, and insurance services, middle market insurers are making their own mark in the financial services convergence story. Insurers such as State Farm and MetLife have developed or acquired banking arms and investment arms within the umbrellas of their other services. The real focus has been on using the banking arms as added distribution channels and as venues for providing a broader slate of services not only for existing insurance customers but also in an effort to attract new customers.

For many people, the opportunity to have one place to do all of their banking, their financial investments, and their insurance is pretty attractive. So we really saw getting into banking as a way to respond to what weve been hearing from many of our customers, notes Fraser Engerman, public affairs specialist at State Farm. The middle market State Farm targets, he adds, traditionally has been underserved by the financial community.

State Farm Bank was created to round out the companys existing offerings to its customers. It is not necessary to be a policyholder to use the banking services, but the company hopes the allure of being able to access banking services and investment services along with insurance guidance and provision will promote more crossover selling of its products.