NEW ENGLAND, THE INSURER THAT WANTS TO BECOME A BANKER, TOO: IT ADDS CREDIT CARDS, EQUIPMENT LEASING, IN BRAND-BUILDING FORAY

New England Financial is aggressively courting individual consumers and small businesses with a line of banklike products.

The Boston-based insurer, formerly known as the New England, recently struck a deal with BankVest Capital Corp. of Marlboro, Mass., to provide lease financing for general business equipment to small businesses. New England Financial, which has $2.5 billion in total assets and a sales force of 2,500, is also developing a home-based banking product, which it hopes to roll out to consumers late this year.

The company, a unit of New York-based Metropolitan Life Insurance Co., says the initiatives are part of an aggressive strategy to position itself as a multifaceted financial services company. Its sister company, Nvest, owns fund families with assets of $40 billion.

The New England bought New York brokerage Nathan & Lewis Securities Inc. for $38 million in February, and last month it made a foray into the credit card business. The cards, which are being offered to 555,000 U.S. consumers in a direct mail campaign, are being issued with Wilmington, Del.-based First USA.

“The credit cards will be a big help in our effort to brand our name in the minds of consumers,” says Gerald Hayden Sr., vice president of New England Financial’s banking products group. “Our new brand is directed at positioning our financial representatives to provide value-added advice and service throughout an individual’s or small business’s financial life cycle.”

Not an easy sell

But offering financial services is one thing; getting consumers to buy them is entirely another. Mary Anne Godbout, an insurance consultant at Conning & Co. in Hartford, Conn., says New England Financial — and other insurance companies peddling bank-type products — face an uphill battle.

“Consumers naturally think of their banks when they need credit cards or loans,” she says. “They don’t automatically think of their insurance company.”

New England Financial is also likely to find its push into banking hampered by the reputation of the industry. Sales abuses, fraud investigations and massive lawsuits have soured consumers’ view of life insurers. Such industry giants as Prudential Insurance Co. of America and John Hancock Mutual Life Insurance Co. have been tarnished by allegations of deceptive practices.

“People just don’t view insurance companies all that highly right now,” Ms. Godbout says.

Undaunted, New England Financial plans to launch a pilot of its small business lease program in the next 60 days. Leases will be made available first in New Jersey, Massachusetts and Minnesota, says Mr. Hayden. If it works, the program will be rolled out across the country.

a foot in the door

“Leasing will become a good door-opener,” Mr. Hayden says.

The company is also putting the finishing touches on a home-based banking product, which it expects to introduce this fall. While details are sketchy, it will be called e-navigator. Its users will be expected to open a money market account at Reich & Tang Mutual Funds of New York, with $7.5 billion under management. It is owned by Boston’s Nvest, which, in turn, is 47% owned by New England Financial’s parent, MetLife.