Fourth-quarter earnings in Wells Fargo's insurance segment dropped 15 percent over the same period in 2011 due to crop-insurance losses, the company says.
The San Francisco-based bank is home to one of the nation's largest insurance-brokerage firms, and did not report insurance results separately. However, in a line-item breakout in its fourth quarter 2012 results, the bank reports insurance revenues fell to $395 million from $466 million from the same period last year.
Wells Fargo owns Rural Community Insurance Services, which provides crop insurance to farmers through the U.S. Department of Agriculture's Risk Management Agency. The subsidiary also offers other forms of named peril, liability and personal lines insurance to farmers through independent agents.
Last year's drought is expected to produce the worst underwriting results since 1988, says A.M. Best. Gross underwriting losses for 2012 are estimated to be more than $15 billion with a combined ratio of 107.
Wells Fargo as a whole reported record net income of $5.1 billion, up 24 percent, or $983 million, from $4.1 billion for the fourth quarter of 2011. Revenues rose 7 percent to $22 billion.
For the year, net income rose 19 percent, or $3 billion, to $19 billion. Revenues increased 6 percent, or $5.2 billion, to more than $86 billion.
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