Bank Insurance Sales Up, But Slowing
By Matt Brady
NU Online News Service, Oct. 21, 5:12 p.m. EDT?Banks collected an estimated $78.1 billion from sales of insurance and annuities products in 2003, up from $69.5 billion the year prior, although the growth rate of those sales fell to its lowest point in five years, a trade group reported.[@@]
The growth rate for bank sales of insurance and annuity products was 12.4 percent in 2003, according to the American Bankers Insurance Association's Study of Leading Banks in Insurance.
According to the study, the slowed growth can be mainly attributed to an increase of just 8.2 percent in annuity premiums sold by banks.
Even accounting for their slowed growth, however, annuity sales still accounted for an estimated $51.6 billion, or 66.1 percent, of total bank premiums in 2003.
Other products experienced far more growth. Commercial lines premiums grew 23.5 percent to $14.2 billion, personal property and casualty premiums grew 26.7 percent to $6.3 billion, and individual life-health premiums grew 29.1 percent to $3.6 billion.
Bank participation in insurance sales is also increasing among those banks with more than $1 billion in assets.
Of the surveyed banks, 86.2 percent of midsized banks, those with between $1 billion and $10 billion in assets, are involved in insurance sales, nearly equaling the 86.4 participation rate of larger banks. Of the banks surveyed with less than $1 billion in assets, only 25.5 percent are distributing insurance products.
According to the study, the acquisition of agencies continued to be a driving force behind the growth of bank in insurance. Of the 391 banks surveyed for the study, 49 reported at least one agency acquisition. Of those 49, a large majority, 89.4 percent, said that they are planning additional acquisitions.
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