It would seem from our report on bancassurance (page opposite) that for British banks, the concept of cross selling will not extend to the general insurance sector. To life, pensions, loans - of course; but to travel, motor, home and health, no.

This is strange. On the Continent, banks achieve up to 20% of all general insurance sales. Here, the figure is barely half that.

Naturally, long-term savings products will always deliver fatter profits than any general insurance policy. But given the Government has minimised commission levels for ISAs and stakeholder pensions, it would seem short-sighted to ignore the potential that general insurance products offer. Certainly the Government's interventionist approach and the current quite dramatic premium rises in motor and household have prompted a number of IFAs to look again at a greater involvement in general insurance.

There are two major obstacles to cross selling, which help explain why banks have been slow to take the plunge. One is the difficulty involved in getting disparate IT systems to talk to each other. But this, presumably, will become easier - which should allow bankers and insurers to become more innovative in the packages they can put together. For example, free credit insurance to clients who do all their borrowing from one particular bank.

The other problem with cross selling is that general insurance can be a complicated product to sell - which presents staff training challenges, not least the problem of how to avoid irritating customers by constantly pushing product their way.

For British brokers, of course, timid bancassurance is good news. There is already far too much competition at both the personal and commercial lines levels. The last thing they need is massive financial institutions hunting harder in their territory.

But in truth, there is scant comfort to be had. This week, HSBC and Abbey National launch their digital television operation, which aims to sell non-life insurance products. With 2006 now the date when digital TV fully replaces the current system, there are many who believe this is more of a threat to brokers than the web. The wise words in CGU's new Cutting Edge marketing pack (page 12) had better be listened to very intently indeed.


Topics