NU Online News Service, Jan. 27, 1:38 p.m. EST

Bank insurance brokerage fee income rose close to 12 percent in the third quarter of 2009 compared with the same period the year before, according to a consulting company.

Michael White company's Michael White-Prudential Bank Insurance Fee Income Report also said that Wells Fargo insurance brokerage had the highest fee income among bank brokerages.

The Radnor, Pa.-based consulting firm found that for the 2009 third quarter total bank insurance brokerage fee income reached $3.05 billion, up 11.7 percent compared to $2.73 billion in third-quarter 2008. It is the greatest amount in five quarters, according to the report.

Over the first three quarters of 2009, bank holding company insurance brokerage fee income held up relatively well, tallying $9.1 billion year-to-date, down only less than 1 percent from $9.2 billion for the same period in 2008, the report said.

Thus far in 2009, some 64 percent of large top-tier bank holding companies are engaged in insurance brokerage activities, the report noted.

The report is based on data from all 7,319 commercial and FDIC-supervised savings banks and 922 large top-tier bank holding companies operating on Sept. 30, 2009.

It measures and benchmarks the banking industry's performance in generating insurance brokerage and underwriting fee income. The insurance fee income consists of commissions and fees earned by a bank holding company or its subsidiary from insurance product sales and referrals of credit, life, health, property and casualty, and title insurance.

Wells Fargo & Co., the top earning bank insurance brokerage, took in nearly $1.4 billion in fees. Citigroup Inc. ranked second with $771 million. BB&T Corp. rounded out the top three with $700 million in insurance brokerage revenue, according to the report.

Five of the top 11 producers of insurance brokerage were newly chartered bank holding companies: Morgan Stanley, GMAC Inc., Discover Financial, American Express Company and The Goldman Sachs Group Inc.

Bank holding companies over $10 billion in assets continued to have the highest participation in insurance brokerage activities, close to 90 percent.

These top BHCs produced $8.53 billion in insurance fee income in the first three quarters of 2009, less than 1 percent off of the $8.6 billion they produced for the same period in 2008. They also accounted for close to 94 percent of all BHC insurance brokerage fee income earned during the period.

The entry of new BHCs with significant insurance brokerage income has offset the loss of other BHC insurance operations, the report said.