NU Online News Service, Nov. 8, 11:34 a.m.EST

Insurance fee income for bank holding companies set a new recordin the second quarter of this year, rising more than 9 percent,according to the Michael White-Prudential Bank Fee IncomeReport.

For the second quarter of this year, insurance brokerage feeincome, from property and casualty and life insurers, increased $33million to $3.88 billion over the same period last year.

Insurance brokerage fee income over the first six months of thisyear rose more than 14 percent, or $98 million, to $7.86billion.

So far in 2011, more that 62 percent of large, top-tier bankholding companies engaged in insurance brokerage services, thereport notes.

Of the top 12 bank holding companies, in terms of insurancebrokerage fee income, Citigroup Inc. holds the top spot with morethan $1.12 billion in fee income in the second quarter, an increaseof more than 45 percent or $348 million over last year. For the sixmonths, fee income is up 64 percent, or $653 million, to $1.67billion over last year.

Wells Fargo & Co. came in second with $923 million in feeincome, down 8 percent, or $82 million in the quarter. Over thefirst six months of this year, fee income is down 10 percent, or$158 million, to $1.38 billion.

In third place is BB&T Corp. with $493 million in thequarter, an increase of almost 2 percent, or $8.6 million over lastyear. Fee income over the first six months grew close to 1 percentover last year, or $5.8 million, to $715 million. BB&T ownsmore agencies that any other financial holding company, the reportnotes.

Michael White, president of Radnor, Pa.-based Michael WhiteAssociates, a bank insurance consulting firm that compiled thedata, says for the first six months of this year the number of bankholding companies that grew insurance brokerage fee revenue wasabout equal to the number of banks that did not.

Of the 154 banks with at least $1 million in annualizedinsurance brokerage revenue, three had no growth, 74 exhibitedpositive growth while 77 saw declines.

Of these, 36 banks had increases in insurance fees under 10percent and 40 saw declines of less than 10 percent. On the otherhand, 38 banks saw their insurance revenues rise 10 percent, while37 experienced decreases of more than 10 percent.

“Across the country, insurance agencies and brokerages continueto be hampered by a difficult economy, soft insurance markets, andcapital restraint on the part of many potential buyers, therebyinhibiting acquisitions,” says White.

The report, sponsored by The Prudential Insurance Company ofAmerica's Individual Life Insurance business, is based on data fromall 6,805 commercial banks and FDIC-supervised savings banks and934 large top-tier bank holding companies operating on June 30 ofthis year.