Bank Employee Insurance Sales Productivity Measure Rises

The Program Productivity measure of how much insurance brokerage fee income is generated by each bank employee soared in the first six months of the year, a report said.

According to the Michael White-Prudential Bank Fee Income Report, productivity climbed in the first two quarters of 2009 to exceed year-end 2008 productivity by 12.5 percent.

The report said the annualized productivity ratio rose to a new high of $2,674 per bank employee compared with $2,377 at year-end 2008.

It was noted that the bank insurance Program Productivity measure of insurance brokerage fee income per bank employee is a fundamental productivity measure in many businesses. The banks do not break down what percentage of the insurance income is from property and casualty coverage and from life and health.

The report was compiled by the Radnor, Pa.-based Michael White Associates consulting firm and sponsored by Prudential's Individual Life Insurance business, a member of the American Bankers Insurance Association.

Michael White said the numbers per bank employee include all bank workers, not just those involved in insurance sales.

Results were based on data from all 7,402 commercial and FDIC-supervised savings banks operating on June 30, 2009.

"Program Productivity enables us to assess the relative generation of a particular fee income among bank employees, the important human assets in generating customer referrals and the attendant fee income earned from customer relationships," said Mr. White, who wrote the report.

The 12.5 percent increase in Insurance Productivity was the largest since 2003, when the ratio increased 16 percent from $1,778 per bank employee to $2,063 in 2004, according to the MWA report.

Up 33.7 percent overall from 2003 through 2008, Insurance Program Productivity grew at a 6 percent compound annual rate from 2003 through 2008, and at 7.7 percent based on the annualized rate through June 2009.

"The substantial increase in income generated through bank employees was up significantly for the first half of 2009, and on an annualized basis reached a record high," said Joan H. Cleveland, senior vice president, business development with Prudential Individual Life Insurance.

Bank Insurance Program Density has also climbed. On an annualized basis, Program Density reached $140,186 at June 30, 2009, up 2.2 percent from $137,197 at the close of 2008. Program Density(TM) measures the amount of insurance program revenue per domestic banking office. It assesses the relative density of fee income among banking locations, the critical physical assets in generating program income. Up 42.5 percent overall from 2003 through 2008, Insurance Program Density grew at a 7.3 percent compound annual rate from 2003 through 2008, and at 7.1 percent based on the annualized rate through June 2009.