Revenues Grow For Insurance Broker Bank Holding Companies

The report said that so far in 2010, more than 60 percent of bank holding companies engage in insurance brokerage activities.

Heading the list is Wells Fargo & Co., based in San Francisco, with first-quarter insurance brokerage fee income of $531,000, up 10 percent from $483,000 for the same period a year ago.

In second place was Citigroup Inc. with $247,000 in fee income, down 1 percent from $250,000 last year.

Rounding out the top three is BB&T Corp. reporting $225,121, down slightly by less than 1 percent from the previous year's $226,790. The consulting firm noted that the Winston-Salem, N.C.-based company owns more agencies than any other financial holding company.

Both Wells Fargo and BB&T derive a significant portion of their insurance revenues from the property and casualty business.

"The less traditional financial institutions that joined the BHC ranks in 2009 helped the industry achieve a second consecutive revenue record in insurance brokerage," said Michael White, president of the consulting firm, in a statement. "It seemed for every BHC whose revenue production was up, another was down."

He said of the 100 BHCs with insurance brokerage revenue, 38 showed positive growth. Six were steady, and seven registered small declines of less than 2 percent.

"Not bad for a soft market that is in the sixth year of stymieing organic growth," he noted.

Mr. White told NU Online News Service that of the top 12 BHCs with insurance brokerage revenue, three–Discover Financial Services (ranked seventh); GMAC Inc. (ranked eighth) and Goldman Sachs Group Inc. (ranked 12^th)–are new to the list courtesy of acquisitions made under the Trouble Asset Relief Program (TARP).

GMAC, Regions Financial Corp (ranked ninth) and BancorpSouth Inc. (ranked 11^th), derive most of their revenues from p&c business, Mr. White said. Bank of America Corp. (ranked fourth) also has a broad mix of insurance revenues, thanks to its acquisition of Countrywide Financial Corp.

Noting that many people are re-evaluating their life insurance needs, Joan Cleveland, senior vice president, business development and individual life insurance for The Prudential Insurance Co. of America, headquartered in Newark, N.J., said, "While the economy continues to be volatile, it's interesting to note that bank insurance brokerage income has attained record highs for two successive quarters."

The report notes that bank holding companies with more than $10 billion in assets have the highest participation in insurance brokerage activities–close to 91 percent. These companies produced $3.13 billion in insurance fee revenues in the first quarter of 2010–11 percent, or $310 million, more than for the same period a year ago.

The results are based on data from all 7,177 commercial banks and FDIC-supervised savings banks and 951 large top-tier bank holding companies operating on March 31, the firm said.