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

Bank-owned insurance agencies' average total return on prior year value fell an annual 10.2 percent for the period ending June 30, 2009, according to Bank-Insurance Viability Index.

The index report, a product of the American Bankers Insurance Association and MarshBerry consulting firm, said the rate environment and the economic recession negatively impacted top-line growth and agency value during the past 18 months.

About 65 percent of the average bank insurance agency's revenue comes from property and casualty protection products and the remainder from life and health, according to Patrick Linnert, a Marsh Berry consultant..

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

It said, "Over the past 24 months, many bank-owned agencies have implemented short-term cost saving initiatives in hopes of preserving profitability, but instead destroyed organic growth and long-term sustainability."

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

According to the Index, leading banks continue to deploy capital, drive growth, embrace accountability and realize long-term equity enhancement within the bank-owned insurance agency.

The latest Index dissects the financial and operational performance of banks, independent agents and brokers, and high performers. It focuses on the retail brokerage platform and covers such topics as organic growth, new business production, acquired growth, earnings margins, expense ratios, staff investment and staff productivity.

The Washington, D.C.-based American Bankers Insurance Association (ABIA) is the separately chartered insurance affiliate of the American Bankers Association (ABA) and is online at www.theabia.com.

MarshBerry is based in Willoughby, Ohio.

Special Reports /

Bank Insurance Agencies&#039; Total Return Fell 10.2 % For 2009

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