NU Online News Service, Feb. 10, 2:32 p.m. EST
Bank owned insurance brokerage firms saw brokerage fee income over the first three quarters of 2010 rise 7 percent over 2009 to a record $9.7 billion, with a property and casualty firm topping the list, according to the latest market report.
In the latest Michael White-Prudential Bank Fee Income Report, fee income rose a total of $630 million, a record for the industry, the report said. However, third quarter bank holding company fee income was down 6 percent, or $190 million, to $2.86 billion. This is the lowest amount since the 2008 fourth quarter, the report said.
In 2010, over the first three months of the year, 64 percent of large top-tier bank holding companies engage in insurance brokerage activity.
The report, compiled by Radnor, Pa.-based Michael White Associates, and sponsored by The Prudential Insurance Co., is based on data of all 7,020 commercial and FDIC-supervised savings banks and 915 large top-tier bank holding companies operating on Sept. 23, 2010.
Of the top 12 bank holding companies, Wells Fargo came out on top with $1.34 billion in fee income, down $42 million from the previous year.
Citigroup, Inc., rebounded from last year, increasing its insurance brokerage fee over the first three months of the year from $771 million in 2009 to $1.32 billion last year, an increase of more than 71 percent.
BB&T Corp. rounded out the top three with $713 million, an increase of $13 million, or almost 2 percent. The report noted that BB&T, based in Winston-Salem, N.C., owns more agencies that any other financial holding company.
Bank holding companies with over $10 billion in assets had the highest participation in insurance brokerage activity at close to 91 percent. These entities produced more than $9 billion in insurance fee income in the first three quarters of 2010, up close to 8 percent from $8.5 billion for the prior year.
In a statement, Joan H. Cleveland, senior vice president, Business Development with Prudential's Individual Life Insurance business noted that life insurance is showing an increase in sales.
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