KeyCorp to Sell Insurance to Small Business

KeyCorp, a $72-billion bank holding company based in Cleveland, announced alliances with property-casualty insurer USF&G; Corp. and three managed health-care insurers, including Kaiser Permanente, aimed at selling insurance to KeyCorp’s 370,000 small-business customers. KeyCorp executive Roger Dunker said the company seeks to carve out a dominant position in a market it believes is underserved. Dunker said studies have shown that of the smallest companies--those with fewer than 25 employees--only 28% have employee health plans. In the next tier of the market--firms with 25 to 99 employees--54% have health plans, he said. Kaiser Permanente said in a statement that KeyCorp is believed to be the first bank-based financial company offering managed-care insurance coverage tailored to small businesses. KeyCorp generally defines a small business as one having less than $3 million in annual sales, credit needs under $300,000 and deposits under $100,000. The program is starting out in northern Ohio but will eventually extend to each of the company’s markets. He said the aim will be to partner with the top three managed-care providers in each market. KeyCorp has a presence in 46 states, although it is most visible in the northern tier of states stretching from the East Coast to the West Coast.