Bank Broker Insurance Income Falls; Wells Fargo Tops Citigroup

NU Online News Service, June 3, 2:13 p.m. EDT

Wells Fargo & Company has passed Citigroup Inc. in insurance brokerage income, according to a report issued by a bank insurance consulting firm.

Radnor, Pa.-based Michael White Associates in its "Michael White-Prudential Bank Insurance Fee Income Report" also found that bank brokerage earnings fell by nearly 4 percent.

The company said of the top 10 bank holding companies with insurance brokerage firms, Wells Fargo & Co. recorded 2008 insurance brokerage income of $1.6 million, taking the number one spot from Citigroup which had $1.2 million.

Wells Fargo's income increased by 25 percent from $1.3 million in 2007, while Citigroup witnessed a 40 percent drop from a high of more than $2 million in 2007.

BB&T Corp. kept its number three spot with $847,267 in income, up slightly from 2007 when it recorded $842,087 in income.

The report said bank holding companies with less than $10 billion in assets experienced a 6 percent increase in their insurance brokerage income, from $688 million in 2007 to $731 million in 2008.

Bank holding companies with assets between $1 billion and $10 billion performed best, the report said, with more than 8 percent growth in insurance brokerage income. These banks grew from $540 million in 2007 to $586 million in 2008.

The data is based on information from all 7,495 commercial and FDIC-supervised savings banks and 880 large top-tier bank holding companies operating on Dec. 31, 2008.

"BHCs [bank holding companies] with assets greater than $10 billion, and, principally, a handful of them, were responsible for an overall decline for the industry in 2008," Michael White, president of the consulting firm, said in a statement. "This constituted a 3.6 percent decrease from a record $12.26 billion earned in insurance brokerage income in 2007. However, BHCs in total still earned $11.8 billion in insurance brokerage income in 2008 despite the current economic environment."