Bank Explains Insurance Growth Strategy

By Mark E. Ruquet

NU Online News Service, April 14, 12:26 p.m.EDT - Old National Bancorp said that as part of acontinuing diversification strategy it plans to acquire the JamesL. Will Insurance Agency Inc., based in Evansville, Ind.

Once the acquisition agreement is completed, the agency wouldbecome part of ONB Insurance Group, a subsidiary of the Evansville,Ind., financial holding company.

The James L. Will Insurance Agency has 22 employees and $2.5million in annual revenues. The agency focuses on property-casualtycommercial and personal lines insurance.

Old National said the acquisition would double ONB InsuranceGroup's size in Evansville, where the bank is based, and complementOld National's expertise in the growing commercial and personalinsurance business.

While other banks are abandoning the idea of joining insuranceservices with their institutions, ONB sees it as a growingopportunity, said Chris Melton, chairman, president and chiefexecutive officer of Old National Signature Group, the non-bankfunction of the financial institution.

"We want to strengthen the non-interest bearing part of ourbusiness, and insurance fits our corporate strategy," noted Mr.Melton.

While other banks purchased small independent agencies andexpected to then incorporate them into the banking services, hesaid ONB decided that to be successful it needed to purchaseinsurance brokers of scale and keep them independent of the bankingbusiness.

"The strategy is that we let the insurance people run thebusiness, I think that is the key part of our strategy," henoted.

"You have to make a commitment to be successful," observed Mr.Melton. "Others thought they could buy one agency and that theywould be successful. That was not our strategy. We are in insurancebecause we think it is a line of business that can diversify us andthat can stand on its own."

The James L. Will Insurance Agency will maintain its name for anunspecified period of time, Old National said, and remain at itscurrent location.

ONB Insurance comprises more than $400 million in premiums.

Old National Bancorp is a $9.6 billion financial holding companyemploying more than 3,000 employees throughout the states ofIndiana, Illinois, Ohio, Kentucky, Tennessee and Missouri.

Mr. Melton said that the ONB aims to see organic growth in theinsurance services of between 10-to-12 percent a year, and doublein size within the next three-to-five years. It also expects tocontinue its acquisition strategy.