Banks' Insurance Revenues Rose Slightly In '07

Year-over-year insurance revenues for bank holding companies rose slightly to less than $44 billion, reflecting the declining rate conditions that have hit the entire industry, according to figures released today.

The findings were released by the bank insurance consulting firm Michael White Associates based in Radnor, Pa., and the Washington, D.C.-based American Bankers Insurance Association (ABIA).

Total insurance revenues for bank holding companies rose 0.5 percent from $43.5 billion in 2006 to $43.7 billion in 2007.

Bank holding company insurance brokerage fee income increased slightly by 1 percent, going from $12.13 billion in 2006 to $12.26 billion in 2007.

In a statement, Valerie Barton, ABIA executive director, said fee income increased from 2001 to 2006 at an annual rate of 19.5 percent. She said soft market property-casualty premiums, changes in bank charters to thrifts that do not report insurance brokerage income, and the sale of some insurance units by the banks contributed to the decline.

"Insurance brokerage remains healthy, and the prospects for a resumption of growth in bank insurance revenues are very positive," she said.

Among the top 10 bank holding companies with brokerage services, Wells Fargo & Company stood in second place with more than $1.5 billion in insurance income, and BB&T Corporation was in fourth place with $853,779.

Mr. White noted that of the top 50 in insurance revenue, "the mean ratio of insurance revenue to non-interest income was 13.4 percent. For those [bank holding companies] engaged in them, insurance activities continue to make meaningful contributions to banking net operation revenues."