Banks Boost Income from Insurance Brokerage

February 10, 2011

Banks earned less in insurance brokerage fees in the third quarter of 2010 than the previous year’s third quarter. However, overall for the first three quarters of 2010, they tallied a record $9.73 billion in insurance brokerage fee income.

The amount reported through the end of the third quarter was up 7.0 percent from $9.10 billion for the same period in 2009, according to the Michael White-Prudential Bank Fee Income Report.

For the third-quarter 2010 alone, bank holding company insurance brokerage income was down 6.3 percent to $2.86 billion compared to $3.05 billion in third quarter 2009, hitting the lowest amount since fourth quarter 2008.

Results are based on data from all 7,020 commercial and FDIC-supervised savings banks and 915 large top-tier bank holding companies operating on September 30, 2010.

Bank holding company insurance brokerage fee income consists of commissions and fees from sales and referrals of credit, life, health, property, casualty, and title insurance.

Among companies with significant banking activities as of Sept. 30, 2010, Wells Fargo & Co. topped the leader board with insurance brokerage earnings of $1.34 billion. Citigroup Inc. ranked second nationally with $1.34 billion; and BB&T Corp., which owns more agencies than any other financial holding company, ranked third with $712.8 million in insurance brokerage revenue over three quarters.

Bank holding companies with more than $10 billion in assets continued to have the highest participation (90.9 percent) in insurance brokerage activities. These BHCs produced $9.18 billion in insurance fee income in the first three quarters of 2010, up 7.6 percent from 2009 or about 94.3 percent of all bank holding company insurance brokerage fee income earned through the third quarter in 2010.

Among bank holding companies with assets between $1 billion and $10 billion, leaders in insurance brokerage income in the first three quarters of 2010 included Eastern Bank Corp. (Massachusetts), Stifel Financial Corp. (Missouri), and Old National Bancorp (Indiana).

Among those with assets between $500 million and $1 billion, leaders were Two Rivers Financial Group Inc. (Iowa), 473 Broadway Holding Corp. (New York), and Texas Independent Bancshares (Texas).

Source: Source: Michael White-Prudential Bank Holding Company Fee Income Report

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