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WHITE SULPHUR SPRINGS, W.Va.-Commercial insurance buyers have a new outlet for purchasing integrated financial services.

Broker USI Holdings Corp. and Chase Manhattan Corp. have formed a partnership that will provide Chase's middle-market banking clients with a broad range of insurance products and services.

The new alliance is likely to serve as a model for other brokers and banks looking to develop partnerships that play to each other's strengths, executives of the two companies said.

The jointly owned venture, called Chase/USI Employee Benefit & Commercial Insurance Agency Inc., will focus on servicing the insurance needs of Chase clients.

The deal gives San Francisco-based USI an ally in the banking community and access to potential new clients while giving New York-based Chase a broader array of financial services to offer its customers.

Chase/USI, which is expected to be operating some time in the fourth quarter and initially will focus on New York, New Jersey and Connecticut, was announced last week during the 84th annual joint conference of the Council of Insurance Agents & Brokers and the Council of Insurance Company Executives at the Greenbrier resort in White Sulphur Springs, W.Va. USI's New York unit, Carpenter &*Pelton Insurance Inc. of Mount Kisco, will work closely with the new entity.

"The genesis of the deal comes from a shared philosophy of bringing integrated financial services to the middle market," said Bernard H. Mizel, chairman and chief executive officer of USI.

"This is the first major example of a strategic move to provide a multidimensional distribution system," he said.

Chase was attracted to USI not only because of that shared philosophy but also because the broker was capable of immediately delivering a range of products, as well as access to major insurance markets, said Dennis Kosovac, president and CEO of New York-based Chase Insurance Agency Inc., which is an existing brokerage subsidiary of the banking giant. Chase Insurance Agency, which specializes in personal and small commercial clients, will assist with the development of Chase/USI.

The existing agency will continue to sell insurance products, but to serve the needs of the bank's middle-market commercial clients, a partner with specialized expertise was needed, he explained.

The partnership is unique among bank-insurance ventures in the breadth of services that will be available to Chase clients, the executives said.

"USI will be able to deliver property/

casualty products, employee benefits services, life insurance, retirement planning and other services," said David L. Eslick, senior vp of sales and marketing for USI Insurance Services Corp. in Cincinnati.

The idea of providing customers with one-stop shopping was a driving force behind the deal, said Mr. Kosovac, noting its business clients have expressed a desire for it.

Eventually the alliance aims to expand beyond the New York metropolitan region to other areas of the country.

Texas is the next potential site for expansion of the joint effort, said Mr. Mizel, noting that both partners have strong operations there.

"The key to gaining strategic advantage in the commercial property and casualty market is scale," Mr. Kosovac said. "This new vehicle should provide that scale immediately, combining USI's product breadth with Chase's expansive middle-market customer base."

In addition, the partnership eventually could lead to Chase marketing banking products to USI's customers, Mr. Mizel said. This could take the form of having Chase personnel within USI offices to market various banking products or services, he said.

As banks and insurers consider forays into one another's businesses, the Chase/USI partnership is a model likely to be copied, the executives predict.

While a bank the size of Chase Manhattan could afford to acquire an agency, as some other banks have done, it was not interested in that model to achieve its aims, said Mr. Kosovac.

To serve the middle market requires specialized expertise and a partner that has access to the major markets, he said.

The cultures of banks and insurance intermediaries are also quite different, he said.

"The complexities of taking a bank culture and managing an entrepreneurial business like insurance brokering is difficult," he said.

Mr. Mizel agreed, noting: "You have to be a heart surgeon to perform heart surgery. You can't take a veterinarian and ask him to do dentistry."

An alliance between the two types of financial services professionals is going to be more successful than if a bank tries to sell insurance itself or buys an agency, Mr. Mizel said.

In those models, the bank won't get its operation to the critical mass needed to be competitive and attractive to insurers "because they lack the leadership, the people to do it," he said.