Wells Fargo overtook Citigroup Inc. in 2012 to lead all banks in insurance brokerage fee income, according to a recent report, but overall insurance brokerage fee income for banks dropped 20 percent for the year.

The “Insurance Fee Income Report” by Michael White Associates says insurance brokerage fee income dropped fell to $6 billion for the year.

Citibank Inc. and Bank of America Corp. were responsible for the majority of the fee losses. with a combined drop of over $1.5 billion in insurance brokerage income between 2011 and 2012.

But despite the income drop from a select number of banks, Robert Seda, president of Dowling Hales, a sponsor of the report, says many bank-holding companies that built or acquired insurance-brokerage firms experienced double-digit increases in brokerage income “signaling an improvement in the financial health of their agencies, specifically those agencies focused” in the P&C sector.

Wells Fargo's brokerage-fee income dropped 4 percent on a year-to-year basis to $1.56 million, but generated enough income to grab the top spot among banks. Taking second place was BB&T Corp., which reported a 33 percent increase in fee income to $1.25 million. Citigroup dropped to third, with its fee income falling 45 percent to $1.17 billion.

Rounding out the top 12:

• American Express Co.

• Goldman Sachs Group Inc.

• Regions Financial Corp.

• Morgan Stanley

• BancorpSouth Inc.

• Discover Financial Services

• First Command Financial Services

• First Niagara Financial Group

• Huntington Bancshares Inc.

The report examines data from all 7,083 commercial banks, savings banks and savings associations and 1,053 large top-tier bank holding companies and thrift holding companies. Bank holding companies of over $10 billion in assets have the highest participation in insurance-brokerage activities at 80 percent. These banks produced $5.29 billion in insurance fee income in 2012, down 24 percent from in 2011.

Special Reports /

Bank Insurance Fee Income Declines in 2012; Wells Fargo Tops Competitors

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