Insurance revenue reported to the Federal Reserve by the nation's bank holding companies grew by $7.3 billion in 2004 to $40.8 billion, 22% higher than 2003, according to an analysis by the American Bankers Insurance Association (ABIA), Washington, D.C.
"The new record numbers in ABIA's analysis confirms that banks are major and growing players in the insurance business," said Valerie Barton, associate director of ABIA. "The bank insurance industry is continuing to take advantage of the legislative reform of 1999 in expanding services it offers to customers."
The total number of bank holding companies reporting insurance revenue also increased 11% to 1,413 in 2004 compared to 1,257 in 2003, according to the ABIA analysis. In addition, 93 bank holding companies reported earning insurance premium income. This indicates that the holding company is engaged in insurance underwriting or reinsurance activities, as opposed to simply acting as an agent for the sale of insurance underwritten by an unaffiliated insurance company.
The ABIA analysis includes a ranking of the top 50 bank holding companies on the basis of the absolute dollar amount of insurance revenue (commissions, fees, and earned premiums) and on the basis of insurance revenue as a percentage of the institution's total non-interest income. "Our analysis also indicates very robust revenue in the coming year," said Barton. "Assuming a 33% growth rate, insurance revenues may hit $10 billion in 2005."
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