A leading American bank is working to bolster its insurance division to escape low profits in its lending business.
Wells Fargo is planning to substantially expand its insurance division in coming months in an effort to make up for low interest rates that have cut into its lending business profits.
The San Francisco-based bank announced that it has hired or reallocated 50 executives to its insurance business and plans to reach out to its middle-market clients. The Wells Fargo insurance division currently accounts for about 4% of its non-interest income and 2% of revenue.
“We really want to grow the business and figure out how to leverage the existing Wells Fargo banking relationships and the power of the brand and the stability of the company,” Laura Schupbach, head of Wells Fargo Insurance, told the Wall Street Journal.
Specifically, Wells Fargo is hoping to increase the number of carriers with which it places. Schupbch said the bank currently works with “several hundred” insurance carriers and is hoping to contract with about 200 more.
It is also aiming to increase its insurance customers from about 10% of its current wholesale customers to 20% to 30%.
And, by leveraging its position as a mortgage lender, Wells Fargo hopes to boost its homeowners sales by offering an insurance quote alongside mortgage approval.
To meet those goals, the bank has engaged in some heavy poaching in the insurance industry. It has secured about 25 new hires from groups like Aon, Marsh & McLennan, Travelers and USI Insurance Services.
The ambition represents a turnaround for the bank, which sold several of its smaller insurance offices in recent years and fell from the world’s fifth largest insurance broker to the eighth largest.
The division currently employs about 5,000 people nationwide and places $9 billion in risk premiums every year as a broker.
