A decade ago, banks began entering the insurance distribution business with high hopes for cross-sales. Terms like “one-stop shopping” and “financial services supermarket” were often used by banks as the rationale for buying agencies.
The fully integrated model (banking-investments-insurance) was projected to generate cross-sales that would, at least, make agency acquisitions highly accretive for banks and, at best, transform the financial services industries.
But these high hopes have not been fully realized. Banks that have achieved cross-selling success have found it to be meaningful, but not transformational. Cross-sales have provided supplemental agency growth and have helped to secure targeted commercial lending relationships. Both are worthy contributions, but neither is a sufficient reason to acquire agencies.
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