Banks increased their insurance brokerage fee revenues by 4 percent last year, with Citibank leading the pack with $973 million in brokerage fee income, according to a study.
The report, released by Michael White Associates, LLC, and sponsored by Symetra Financial, is based on data released by all 7,837 commercial and FDIC regulated savings banks.
The data shows that 47 percent of banks in the United States engaged in activities that produced insurance brokerage revenue.
The products include insurance sales and referrals of credit, life, health, property, casualty, title insurance and annuities not sold by securities brokerage firms.
Banks recorded $4.08 billion in 2006, up from $3.93 billion in 2005.
Behind Citibank on the list was BB&T (Branch Banking and Trust Company) with $799.4 million in insurance revenue. FIA Card Services was third, but saw its revenues drop 26 percent, or $66 million, to $190 million.
The report found that banks with over $10 billion in assets continued to have the highest participation in insurance broker activities (71 percent), producing $3.2 billion in insurance fee income.
“The industry’s growth rate of 4 percent last year in insurance brokerage fee income was a decline from the compound annual growth rate of 6.5 percent since 2001,” said Rod Halvorson, senior vice president of financial distribution for Symetra Financial.
The decrease, he said, “reflects, in part, a tendency to locate insurance operations within bank holding company subsidiaries rather than bank subsidiaries. And, it reflects a slowdown in bank platform sales programs that strictly sell fixed annuity products.”