Bank Insurance Brokerage Fees Reach Record High

Insurance-brokerage fees for bank-holding companies were up more than 14 percent over the first three quarters of 2011, but the two major bank-owned P&C brokers saw their fees drop over the period.

The Michael White-Prudential Bank Fee Income Report, released Feb. 7, says insurance-brokerage fees came in at a record $5.89 billion over the first three quarters of 2011, an increase from the previous year’s $5.14 billion.

For just the third quarter, fees rose 57 percent over the same period in 2010, or $730 million, to $2.01 billion.

The results were the highest-ever third-quarter results, the report says, and rank as the third-highest quarterly amount in insurance-brokerage-revenue history.

Through the first three quarters of 2011, Wells Fargo & Co. ranked second on the list with brokerage-fee revenue of $1.26 billion, which is down close to 6 percent from 2010.

BB&T, ranked third, saw its insurance-fee income drop less than 1 percent to $707 million.

Number one on the list is CitiGroup, which engages primarily in life and financial-services brokering. CitiGroup reported its brokerage-fee income rose 25 percent to $1.66 billion.

The results were compiled from data from all 6,740 commercial and FDIC-supervised banks and 927 top-tier bank-holding companies operating on Sept. 30, 2011.

Michael White, president of Michael White Associates, says overall, bank-holding companies grew their revenues “in a meaningful way.”

White says that an examination showed that of 155 banks with at least $1 million in annualized insurance-brokerage income, four had no growth during the first three quarters of last year. Eighty banks had positive brokerage-fee growth, and 71 had declines.

“These changes signal improvement among bank-holding-company agencies and offer hope that the economy is finally beginning to improve a bit—and the P&C insurance markets are starting to harden,” he adds.

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