Bank holding companies saw total insurance income increase 38.5% last year to $15.1 billion from a year earlier, 2008, according to a Michael White Associates/American Bankers Insurance Association report released Wednesday based on Federal Reserve Board data.
Citigroup [C], Bank of America [BAC] and Wells Fargo [WFC] led the pack with $3 billion, $2.8 billion and $2.1 billion in sales, respectively. These same companies earned the most insurance revenue in 2008, too, although Wells Fargo was in second place that year.
Several important industry events knocked the wind out of the sales of bank holding companies’ rise in overall sales, though, said Michael White, president of
Additionally, the bulk of bank holding companies’ insurance income came from underwriting — primarily credit insurance, vendor single interest and collateral protection — rather than brokerage sales of traditional products such as property and casualty, car and life insurance, which only gained 4.7% over the prior year.
Performance was also spotty. At 609 bank holding companies, more than two thirds earn some type of insurance revenue, but White said that for every bank holding company that grew sales, another’s sales dropped. However, he said that considering a six-year soft market in P&C insurance and two years of economic turmoil, “as a group, BHCs did very well in a horrible market.”
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