First-quarter fee income for bank-owned insurance brokerage firms slipped more than 5 percent largely due to the income drop at two major brokerage firms, Wells Fargo and Citigroup.

In the latest Michael White Bank Insurance Fee Income Report, bank holding companies recorded $1.72 billion in insurance brokerage fees in Q1 of this year, down $90 million from the same period in 2012.

During the period, revenues at Wells Fargo & Co., a P&C broker, dropped 10 percent to $407 million and Citigroup Inc., a life broker, fell 61 percent to $197 million. Wells Fargo and Citigroup are ranked No. 1 and No. 3, respectively, on the list of top 12 bank-owned brokers.

Wells Fargo has attributed the drop in insurance income to lower commodity prices in its crop insurance company and discontinuation of lender-placed insurance commissions.

No. 2 on the list, BB&T Corp.—a mix of P&C and life insurance business—saw its fees increase 37 percent to $335 million. In fourth place is Bank of America Corp., which swung from a $67 million loss in Q1 2012 to $138 million.

Michael White, the bank consulting firm's president, says bank holding companies made real progress in insurance revenues in Q1. Of 256 banks that are on track to earn $250,000 in annualized insurance brokerage income, 168 showed positive growth.

The number of banks with double-digit increases in insurance brokerage fees over the prior year rose from 94 in 2012 to 116 so far this year. The results point to continued, meaningful growth in insurance-fee revenues.

Special Reports /

Bank-Owned Insurance-Broker Revenues Slip for Two Major Players

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