State Farm agents putting on bankers' hats

By JEFF HARRINGTON

© St. Petersburg Times, published January 15, 2001

So far, the game of financial modernization has been rather one-sided in Florida, with a handful of banks buying insurance companies to sell their products.

Come spring, the 800-pound gorilla in Florida insurance wants to turn the tables.

State Farm, the largest auto and property insurer in Florida, plans to train its 800 agents in Florida to sell banking products. You name it: checking accounts, savings accounts, certificates of deposit, money market accounts, home equity lines, mortgages, personal loans, auto loans and auto leases.

The insurer has trained agents in 11 states, including its home turf in Illinois. Florida is one of eight states included in the next round. By year-end, it intends to finish training all 16,000 agents in 50 states.

State Farm has quietly offered banking products since receiving a charter for its thrift in 1998. But untrained agents in Florida weren't allowed to market it and didn't promote it; all they could do was refer any customer who asked to a Web site or toll-free number for more details.

State Farm says it is reacting to customers who want to give the company more of their money. But there are some shortcomings if you want to make the "good neighbor" people your neighborhood bankers.

State Farm agents won't be allowed to accept deposits or approve loans. Instead, they'll steer customers to the Internet or telephone or give them a stack of preaddressed envelopes for deposits. Like Internet banks, State Farm will reimburse customers that use a limited number of ATM networks.

And don't look for the agency to imitate the banks with brick-and-mortar branches. It has no plans to buy any banks or establish any branches.

"We're looking at growing this through our agents," spokesman Dick Luedke says.

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