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NEWS RELEASE
May 19, 2009
ABIA Media Contact: Jonathan Snowling
(202) 663-5468
E-mail: jsnowlin@aba.com
WITHOUT METLIFE, BANK INSURANCE REVENUE WAS UP 7.2% IN 2008
WASHINGTON–The nation's bank holding companies experienced an increase of 7.2 percent in their total insurance revenue from $10.15 billion in 2007 to $10.88 billion in 2008, when MetLife, which does not engage in significant banking activities, is excluded.
Citigroup, Inc. (NY), Wells Fargo & Company (CA), and Bank of America Corporation (NC) led all bank holding companies with significant banking activities in total insurance fee income in 2008 , according to findings released today by the American Bankers Insurance Association and Michael White Associates.
The findings are based on data reported to the Federal Reserve Board by top-tier BHCs. The analysis measures the banking industry's insurance business and provides some benchmarks that gauge bank insurance performance.
"Among the top 50 in insurance revenue, the mean ratio of the concentration of total insurance revenue to noninterest income was 18.6 percent in 2008. Among the top 50 in this Concentration Ratio, the mean was 49.9 percent," said Michael D. White, President of MWA. "For those BHCs seriously engaged in them, insurance activities clearly
During 2008, 586 bank holding companies (or 66.6 percent of all large top-level BHCs reporting) earned some type of insurance-related revenue. While BHC insurance brokerage fee income decreased from a record high in 2007, the 31.8 percent increase in BHC insurance underwriting income (excluding MetLife, which does not engage in significant banking activities) to $4.65 billion drove the industry's overall increase in total insurance income in 2008.
Total insurance income slowed in 2007 and declined in 2008 due to several factors including the continuing, long-lasting soft market in property-casualty insurance; sporadic, but seemingly more numerous instances of decreases in contingent commissions; a few bank-charter conversions to thrifts that do not report insurance brokerage income; the recent exclusion of all annuity commissions from the insurance brokerage data field; the conversion of some large BHC credit insurance underwriting operations to offerings of related non-insurance products like debt cancellation or debt suspension agreements; and some sales of insurance operations by a few big BHCs whose particular circumstances, strategic aims, and commitment to insurance had changed.
"Despite all this," said Valerie Barton, ABIA Executive Director, "BHCs managed to hold their own in the overall generation of total insurance income. Overall, the bank insurance industry remains healthy, and the prospects for a resumption of long-term growth in bank insurance revenues remain positive."
The analysis includes a ranking of the top 50 bank holding companies on the basis of the absolute dollar amount of total insurance revenue (earnings from sales and underwriting) and on the basis of total insurance revenue as a percentage of the institution's total noninterest income. Other findings include:
- Joining the top 50 in total insurance revenue in 2008 were National Penn Bancshares, Inc. (PA), CoBiz Financial Inc. (CO), The ANB Corporation (TX), Shore Bancsahres, Inc. (MD), Doral Gp Ltd. (PR), 473 Broadway Holding Corporation (NY), Comerica Incorporated (TX), and Peoples Bancorp Inc. (OH).
- Among the top 50 nationally, Doral Gp Ltd. (PR) increased its rank in total insurance income the most, having jumped from 92nd place at the end of 2007 to 43rd by year-end 2008. National Penn Bancshares, Inc. (PA) and 473 Broadway Holding Corporation (NY) each jumped 40 rungs of the ladder, respectively, from 74th to 34th and 84th to 44th place in the rankings. Also jumping two digit's worth of ranks were BBVA USA Bancshares, Inc. (TX), Huntington Bancshares (OH), Barclays Group US Inc. (DE), CoBiz Financial Inc. (CO), The ANB Corporation (TX), Shore Bancshares, Inc. (MD) and Comerica Incorporated (TX).
The American Bankers Insurance Association (ABIA) is the separately chartered insurance affiliate 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.
Michael White Associates (MWA) is a bank insurance consulting firm headquartered in Radnor, PA, and at www.BankInsurance.com. Michael White's annual Bank and Bank Holding Company Insurance & Investment Fee Income Reports™ provide a more comprehensive analysis of bank insurance, investment, and mutual fund and annuity fee income. Those reports are sponsored by Symetra Financial. Additionally, the MWA Fee Income Ratings Reports™ compare, rank and rate a particular financial institution's insurance or other non-interest fee income program nationally, regionally, statewide and in its asset-peer group. Copies of MWA's reports can be obtained from MWA by calling (610) 254-0440, or by visiting www.BankInsurance.com.
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For additional information contact:
Michael White
Michael White Associates, LLC
823 King of Prussia Road, Radnor, PA 19087
Email: MWA@BankInsurance.com
Phone: (610) 254-0440 Fax: (610) 254-5044
Valerie Barton
American Bankers Insurance Association
1120 Connecticut Avenue, NW, Washington, DC 20036
Email: vbarton@aba.com
Phone: (202) 663-5072 Fax: (202) 828-4546
Jon Snowling
American Bankers Association
1120 Connecticut Avenue, NW, Washington, DC 20036
Email: jsnowlin@aba.com
Phone: (202) 663-5468
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