Banks have become a force that carriers have to reckon with in insurance distribution. In 2003, the value of insurance products sold by U.S. banks reached $78.1 billion, more than double the amount just four years earlier, according to a report by the American Bankers Insurance Association (ABIA), Washington, D.C. Two trends have contributed to the growth of these sales: The continued acquisition of agencies by banks, and the growth in pre-existing programs, according to the ABIA. In recent years, the participation rate for mid-size banks ($1 billion to $10 billion in assets) has approached that of larger banks. Conversely, about one-quarter of banks with assets less than $1 billion are distributing insurance products.Customer Focus

Customer type that banks are selling insurance to Community banks that sell general insurance are as likely as large banks to target both personal and commercial customers.

Source: American Bankers Insurance Association

Bank Participation (Types of coverage sold by banks)

Although one-third of surveyed banks are distributing property/casualty and/or life/health products, more than half are not distributing any insurance.

Source: American Bankers Insurance Association.

Banks' Insurance Premiums (Amounts in $ billions)

In 2003, the rate of growth for bank-produced premiums slowed to 12.4%. The slowdown appears to be due primarily to shift in market cycles.

Source: American Bankers Insurance Association

Current Bank-Insurance Market (By bank size)

Bigger banks are the dominant players in the bank-insurance market as only 25.5% of banks with less than $1 billion in assets are distributing insurance and annuities.

Source: American Bankers Insurance Association

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