Although there's no reason why banks shouldn't be in the insurance business, these two differing cultures can be in conflict. Whether it's attractive interest rates, convenient office or ATM locations, free checking accounts, or even free gifts, banks are used to pulling customers. Constrained by state regulations, selling insurance is just the opposite. Rather than attempting to attract customers, agencies have aggressively gone out to grab them. It's the old story of people crossing to the other side of the street when they see the insurance agent headed toward them.
Culture conflicts are real.
Another twist is the way a bank perceives the role of its insurance agency. A bank undoubtedly views it as a profit center, but the facts suggest that agencies are not as profitable as they were in the past. Commissions are down and a soft market has driven premiums lower. Although agents continue to hope that the market will turn, most experts doubt that it will happen any time soon. Contingency commissions from carriers have saved more than one agency from financial despair, but there's reason to believe that this annual shot in the arm will be less potent in the years ahead.