NU Online News Service, Jan. 26, 2:25 p.m.EST

Bank-owned insurance agencies' average total return on prioryear value fell an annual 10.2 percent for the period ending June30, 2009, according to Bank-Insurance Viability Index.

The index report, a product of the American Bankers InsuranceAssociation and MarshBerry consulting firm, said the rateenvironment and the economic recession negatively impacted top-linegrowth and agency value during the past 18 months.

About 65 percent of the average bank insurance agency's revenuecomes from property and casualty protection products and theremainder from life and health, according to Patrick Linnert, aMarsh Berry consultant..

The report pointed to management decisions as the key differencebetween the best and worst agency performers.

It said, "Over the past 24 months, many bank-owned agencies haveimplemented short-term cost saving initiatives in hopes ofpreserving profitability, but instead destroyed organic growth andlong-term sustainability."

The top 25 percent of bank-owned insurance agencies, however,are performing well, despite the external environment, and continueto reinvest and thrive, the Index report found.

According to the Index, leading banks continue to deploycapital, drive growth, embrace accountability and realize long-termequity enhancement within the bank-owned insurance agency.

The latest Index dissects the financial and operationalperformance of banks, independent agents and brokers, and highperformers. It focuses on the retail brokerage platform and coverssuch topics as organic growth, new business production, acquiredgrowth, earnings margins, expense ratios, staff investment andstaff productivity.

The Washington, D.C.-based American Bankers InsuranceAssociation (ABIA) is the separately chartered insurance affiliateof the American Bankers Association (ABA) and is online atwww.theabia.com.

MarshBerry is based in Willoughby, Ohio.