I wonder how much they disrupted the insurance agencies when they were acquired…Bank of America is also looking for a buyer…how long until they all jettison the acquisitions that they didn’t understand in the first place…
It’s all about marketing trends and what is the new hot thing to do, not necessarily about sound financial decisions. At one point all banks were scrambling to say they have everything a client could want under one roof… banking, money markets, investments, insurance, etc… Now it’s not fashionable anymore and all our estemed financial institutions are returning to their “core” businesss (banking). Remember CitiCorp’s acquisition of Travelers? Only to sell it to MetLife when they didn’t want to offer insurance products anymore and decided to stick to banking. Webster is just following the trend. Actually they are a little late on this band wagon.
You should not share tears for anyone but the rank and file employees who became bank employees unwittingly. I am certain the overcompensated agency principals were overpaid when they sold out to Webster.
It not only is occurring in the for profit banking industry, but also challenges the credit union industry. Most credit unions that own an agency are also considering divestiture or have done the same. Despite the best of intentions, a number of agencies have never achieved the scale and customer satisfaction to even break even after a decade or two.
The vast majority of credit unions that endorse P&C programs have turned to a third party provider. The provider uses its own field agents and call centers to sell and service, and still provides a royalty back to the credit union that is greater than most credit union owned agencies put to their bottom line.
Exactly my (hidden) point – bank expectations coupled with their seizure of profits off the top of our year-end profits really devastated the agency (personnel) I worked with. The principals, despite the initial compensation, were screwed in subsequent years as commissions were cut again and again. I was also at Travelers during the Citibank era but felt almost no impact at the underwriting level. I’ll be bitter about banks for the foreseeable future (20-25 years!).
I feel sorry for the those caught up in the slaughter, but it is going to be a good thing for us small independent agents. Only private equity, mega-agents and public brokers could afford these agencies.
It will cause some former employee to enter the job market, which is a good thing for agents like me. I also expect that a lot of business that no longer fits, or is too local for these mergers to migrate to the local agencies.
Well, Compass Bank is late to the party. Announced in June and supposedly closing in June is the acquisition by Compass of Schaefer Smith Ankeney in Phx. This is one of the largest and oldest agencies which was still private. Yes the owners get paid off AND DESERVE TO BE PAID OFF! Employees are taken care of with new benefit packages and other good reasons to stay with the agency. If they took ANY risk financially, they would be rewarded too. If not, shut up and take the paycheck.
Not everyone is in it for the “benefits”. Some of us like to sell insurance, deal with customers and make clients who are loyal for the long hall. Likewise, there are customers who want to deal with someone they know – particularly with personal and small business insurance.
I agree that insurance pros, including sales pros, might just want to leave and start their own show, and they know they can be successful seperate from being a division and its managerial heirarchy.
The larger the agency, the more distant from the field they become. Why not just buy insurance on line? It’s still a relationship business, and this is where the banks – and Citigroup got lost.
I wonder how much they disrupted the insurance agencies when they were acquired…Bank of America is also looking for a buyer…how long until they all jettison the acquisitions that they didn’t understand in the first place…
It’s all about marketing trends and what is the new hot thing to do, not necessarily about sound financial decisions. At one point all banks were scrambling to say they have everything a client could want under one roof… banking, money markets, investments, insurance, etc… Now it’s not fashionable anymore and all our estemed financial institutions are returning to their “core” businesss (banking). Remember CitiCorp’s acquisition of Travelers? Only to sell it to MetLife when they didn’t want to offer insurance products anymore and decided to stick to banking. Webster is just following the trend. Actually they are a little late on this band wagon.
You should not share tears for anyone but the rank and file employees who became bank employees unwittingly. I am certain the overcompensated agency principals were overpaid when they sold out to Webster.
It not only is occurring in the for profit banking industry, but also challenges the credit union industry. Most credit unions that own an agency are also considering divestiture or have done the same. Despite the best of intentions, a number of agencies have never achieved the scale and customer satisfaction to even break even after a decade or two.
The vast majority of credit unions that endorse P&C programs have turned to a third party provider. The provider uses its own field agents and call centers to sell and service, and still provides a royalty back to the credit union that is greater than most credit union owned agencies put to their bottom line.
Exactly my (hidden) point – bank expectations coupled with their seizure of profits off the top of our year-end profits really devastated the agency (personnel) I worked with. The principals, despite the initial compensation, were screwed in subsequent years as commissions were cut again and again. I was also at Travelers during the Citibank era but felt almost no impact at the underwriting level. I’ll be bitter about banks for the foreseeable future (20-25 years!).
I feel sorry for the those caught up in the slaughter, but it is going to be a good thing for us small independent agents. Only private equity, mega-agents and public brokers could afford these agencies.
It will cause some former employee to enter the job market, which is a good thing for agents like me. I also expect that a lot of business that no longer fits, or is too local for these mergers to migrate to the local agencies.
It’s morning in America for the smaller agent!
Well, Compass Bank is late to the party. Announced in June and supposedly closing in June is the acquisition by Compass of Schaefer Smith Ankeney in Phx. This is one of the largest and oldest agencies which was still private. Yes the owners get paid off AND DESERVE TO BE PAID OFF! Employees are taken care of with new benefit packages and other good reasons to stay with the agency. If they took ANY risk financially, they would be rewarded too. If not, shut up and take the paycheck.
I also heard that they are trying to sell their premium finance division, Budget Installment Corp(BIC).
Not everyone is in it for the “benefits”. Some of us like to sell insurance, deal with customers and make clients who are loyal for the long hall. Likewise, there are customers who want to deal with someone they know – particularly with personal and small business insurance.
I agree that insurance pros, including sales pros, might just want to leave and start their own show, and they know they can be successful seperate from being a division and its managerial heirarchy.
The larger the agency, the more distant from the field they become. Why not just buy insurance on line? It’s still a relationship business, and this is where the banks – and Citigroup got lost.