Washington–Bank sales of commercial lines insurance have jumped more than 200 percent since the financial sector changes in the 1999 Gramm-Leach-Bliley Act went into effect, according to a new study released today.
The banking sector's involvement in insurance brokering is also increasing, according to the statistics in the Insurance Information Institute's Financial Services Fact Book.
Costs of the I.I.I. publication were underwritten by the Financial Services Roundtable, which recently reorganized and now includes a number of large insurance institutions, both life and property-casualty, amongst its members.
The Fact Book was unveiled as the Financial Services Roundtable hosted its 2006 Economic Outlook panel discussion.
I.I.I. published the information as part of its effort to note the convergence of the financial services industry since the Gramm-Leach-Bliley financial services modernization law was enacted.
The act allowed financial services companies to sell each other's products. Since the bill passed, the book said, "banks have greatly expanded their business beyond their traditional offerings to include sales of insurance and securities. Sales of nonbanking products now make up an increasing part of their revenue."
According to the new Fact Book, bank sales of commercial lines insurance products have increased 222.7 percent, although total sales were still only $14.2 billion in 2003, the Fact Book said.
Those sales constituted 18 percent of total commercial lines premiums, the book said. Personal lines coverage, mostly casualty insurance, has also increased, to $6.3 billion in 2003, constituting 8 percent of total premiums for these lines, the new publication said.
The bank insurances sales statistics were supplied by the American Bankers Insurance Association.
Total bank-produced insurance premiums rose 114.6 percent from 1999 to 2003, the report said, to $78.1 billion in 2003.
MetLife Inc.'s bank holding company had the largest insurance brokerage fee income in 2004–$3.08 billion, the report said. That constituted a 10 percent increase in brokerage income from 2003, and 11.26 percent of the total company's noninterest income, the report said.
In 2004, MetLife's total assets were $356.8 billion, the report said.
The second largest financial services holding company in terms of insurance brokerage firm in 2004 was Citigroup, with $1.62 billion in brokerage income, a 19 percent increase from 2003 results. Those numbers constituted 3.98 percent of Citigroup's noninterest income, the report said.
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