FOR IMMEDIATE RELEASE
May 4, 2011
ABIA Media Contact: Sarah Marshall 
(202) 663-5468
E-mail: smarshal@aba.com

WASHINGTON — Banks’ capital investments in insurance agencies shine when compared with traditional business lines, such as lending, according to the latest Bank-Insurance Viability Index, a quarterly report compiled by MarshBerry and sponsored by the American Bankers Insurance Association. Based on an analysis of retail insurance brokerage risk-adjusted return on capital, or RAROC, banks can remain confident as they continue to invest their capital in the insurance industry.

In addition, the diversification afforded by insurance brokerages can contribute to higher price/earnings ratios.

The report compares the potential market, credit and operational risks of insurance brokerage and banks. It also illustrates how banks with greater levels of diversified fee income have higher P/E ratios, a calculation of the stock market’s assessment of risk to a particular financial institution’s stock.

The Bank-Insurance Viability Index provides benchmarking statistics to help bank-insurance platforms realize equity enhancing change. The quarterly report dissects the financial and operational performance of banks, independent agents and brokers, and high performers. It focuses on the retail brokerage platform and covers topics such as organic growth, new business production, acquired growth, earnings margins, expense ratios, staff investment and staff productivity.

The American Bankers Insurance Association (ABIA) is the separately chartered insurance subsidiary of the American Bankers Association (ABA) and is the only Washington, D.C.-based full service association for bank insurance interests. The ABIA’s mission is to develop policy and provide advocacy for banks in insurance and to support bank insurance operations through research, education, compliance-assistance and peer group networking opportunities. ABIA Membership consists of banks, and their affiliated agencies, insurance companies, marketing, and administrative services suppliers, non-bank lending organizations and other firms involved in the bank affiliated insurance industry. Additional information on the ABIA can be found on the Internet at www.theabia.com.

MarshBerry is a specialized management consulting firm rendering services and solutions to insurance organizations, financial services providers, lending institutions and trade associations.  Client engagements focus on organic growth, valuations, mergers and acquisitions, operational improvements, research and insights on benchmarking, and proven practices of high performers.

For additional information contact:

Valerie Barton
American Bankers Insurance Association
Email: vbarton@aba.com
Phone: (202) 663-5072
Fax: (202) 828-4546
www.TheABIA.com

John Wepler
MarshBerry
Email: John@MarshBerry.com
Phone: 440-392-6572
www.MarshBerry.com

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