Bank insurance revenue grows

WASHINGTON—U.S. bank holding companies increased their total insurance revenue 1.1% to $21.4 billion in the first half of 2006 from the same period last year.

According to statistics from the American Bankers Insurance Assn. and bank insurance consulting firm Michael White Associates, CitiGroup ($1.57 billion), Wells Fargo & Co. ($728.0 million), Countrywide Financial Corp. ($580.8 million) and HSBC North America Holdings Inc. ($533.2 million) led all bank holding companies in insurance fee income during the first half of the year.

The findings are based on data reported to the Federal Reserve Board by 990 large bank holding companies.

While total bank insurance revenue rose slowly during the first six months, brokerage fee income rose rapidly, according to the ABIA, increasing 23.1%, over the same period last year to $6.13 billion. Of the bank holding companies reporting, 64.6% generated income from insurance brokerage fees.

Much of that growth in brokerage fee income was organic in nature, according to the ABIA, as the pace of agency integration and cross-selling increases at banks.

During the first half of the year, 644 bank holding companies, 65% of all the large bank holding companies reporting, earned some type of insurance-related revenue. In addition, 81 BHCs reported some income from insurance underwriting activities.