Synovus Enters Health Insurance

As the economy slows and capital for acquisition receives greater scrutiny from executives, many companies are looking to partner with peers from other verticals, rather than acquire other businesses.

Synovus Financial Corp. ($15.2 billion in assets, Co- lumbus, GA), a financial services company, has partnered with SimplyHealth (Atlanta), an online health insurance distributor, and will offer health insurance products in its bank branches, through call centers and bank constituent Web sites.

Huge Opportunity

"There is a huge opportunity in the health insurance arena for these types of products," which include managed care, prescription, dental and supplemental insurance products, says Joe Majestic, senior vice president and chief operating officer, Synovus.

The trend of partnering and offering other companies' products should continue, says Kyle Webb, director of business development at SimplyHealth. "A lot of banks have been purchasing health insurance agencies," he says. "But with the slowing market and capital constraints, banks are looking for partnerships."

Rather than dive right into insurance, Synovus decided to learn more about the industry before committing to manufacturing its own products, Majestic says. "Underwriting sometime in the future is a distinct possibility. Insurance is much different from banking. We have no plans to manufacture products," he adds.

For Synovus, the technology investment was minimal since SimplyHealth hosts the call center and Web pages. "It is a private-label site," Majestic says. "We didn't really have to integrate any systems."

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio