Chicago — The past month has seen commercial banks supersede their Wall Street cousins, most glaringly exemplified by
According to new analysis by Radnor, Pa.-based
Topping the list of banks for insurance fee income for the first half of 2008 was New York-based Citigroup Inc., followed by San Francisco-based Wells Fargo & Co., Winston-Salem, N.C.-based BB&T Corp. and Charlotte, N.C.-based Bank of America Corp. The rankings are based on data reported to the Federal Reserve Board by 946 top-tier large bank holding companies.
While the notion of a bank selling insurance is common throughout the world, especially in Europe (where’s it’s known as bancassurance), it is still far from ubiquitous in America. While bank holding companies have been actively acquiring insurance agencies in the past decade, the pace of deals has slowed as independent agencies have become reluctant to sell because the soft market has lowered their value. Moreover, banks are looking to preserve capital and will be less likely to acquire agencies the rest of this year and next year, Carmen Effron, who heads
Yet, banks determined to offer a wide range of financial products to their customers and used to the taste of insurance fee income, will remain active acquisitors, says Valerie Barton executive director of ABIA.
“Insurance consistently proves it is a valuable revenue-generating activity during good times and bad times,” she says. “Those institutions that engage in it are glad to have the additional income for diversification of their revenue sources, and for their bottom lines.”
Sources: American Bankers Insurance Association, American Banker, INN archives
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