Zurich Financial Services, the Swiss-based Group that owns Farmers Insurance, announced that it had concluded a strategic alliance with Bank of America “to develop and market integrated banking and insurance solutions to a combined customer base of 37 million households.”
The deal with B of A follows just days after Zurich reported it had reached a similar arrangement with the Bank of Scotland for the U.K.
Plans call for the first phase to begin by July of this year. During this preliminary period “Farmers agents will provide advice-based insurance services directly from selected Bank of America banking centers. In addition, Farmers agents will market Bank of America products and services to its customers,” according to the announcement. As examples of the type of cooperation envisaged, the companies said B of A customers would be eligible for discounts on Farmers insurance products, real estate customers would be able to get quotes on homeowners’ insurance and Farmers would market its personal lines products such as auto and renters insurance. Farmers meanwhile will offer its customers the full range of B of A’s banking services.
The alliance between America’s largest retail bank and its third largest personal insurance provider is a major step towards the implementation of the “bancassurance” model, common in European countries. “It will leverage the large distribution networks of both organizations,” which includes “4,400 B of A retail banking centers, 13,000 ATMs and the Farmers network of 17,000 exclusive and independent agents.”
The two companies are aiming at more than convenient marketing plan.
“It is different from other alliances or partnerships in the marketplace in that it is not simply about cross-selling to each others’ customers,” said Cathy Kenworthy, B of A’s Insurance Services Executive; “we are dedicating resources from both companies to develop a total customer view for the delivery of integrated products and services.”
Rolf Hueppi, Zurich’s CEO, was equally expansive. “The United States is our largest market in the world,” he stated. “We believe this alliance between Farmers, our North American retail brand, and Bank of America, will become the model for similar opportunities worldwide.”
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