InsurBanc Helps Agents While Turning A Profit
What's new at InsurBanc? It's making a profit.
"We have broken a wall and have become profitable as of last August. On a monthly basis, we are now making money," confirmed Michael W. Herlihy, the Farmington, Conn.-based bank's chief executive officer.
InsurBanc is the online banking institution set up by the Alexandria, Va.-based Independent Insurance Agents & Brokers of America, insurer W.R. Berkley Corp. and its subsidiaries more than four years ago.
A year after it opened, the bank had $11 million in deposits and $22 million in assets. Today, it boasts over $46 million in deposits and $80 million in assets, doing business in 40 states.
"Things have really come along," Mr. Herlihy noted.
Besides being a full-service online bank for independent agents, its other purpose continues to be to provide loans to agencies for their operations, including being there when capital is required for perpetuation or an acquisition.
What remains unique, according to Robert J. Pettinicchi, chief lending officer, is that unlike other lending institutions, InsurBanc remains a place where agents can go for financial services from an institution that understands their business.
"We are the only bank lending operation where our core competency is to lend money to independent agents," said Mr. Pettinicchi. "That is something we do more of and better than anybody."
The bank has $46 million in loans out to independent agents in 17 states and is working on developing greater relationships with agents throughout the country. It does banking business in 40 states, with the capability of being in all 50.
The banks executives noted that despite its electronic efficiencies, there are still some agents who like to do things the old-fashioned wayespecially when it comes to making deposits.
To accommodate them, InsurBanc has developed limited relationships with four banking institutionsBank of America, Wells Fargo, Wachovia, and Fifth Third Bank. Under the agreements, an agent who has banking services with InsurBanc can go to one of these banks to make a deposit. The deposit, Mr. Herlihy said, will appear in the agents InsurBanc account the next business day.
"While many have embraced technology, many others like the comfort of doing some things the old way," pointed out Mr. Herlihy. "They like to physically drop off their deposit and get a receipt. However, those clients who have fully embraced online banking have raved about it. We listen to complaints, and take them seriously, but the positives outweigh the negatives."
Mr. Pettinicchi and Mr. Herlihy point out that another advantage to doing business with InsurBanc is that despite being an online facility, its level of service is not detached from the customer by automation.
"The fact is that when [an agent] calls, they speak to a [bank representative], as opposed to speaking to a call center or a voice response unit," Mr. Herlihy noted.
"We think this is the best way to do business," explained Mr. Pettinicchi. "We treat independent agents the way independent agents treat their clients."
"We treat independent agents the way independent agents treat their clients," said one official.
Reproduced from National Underwriter Edition, March 10, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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