First-quarter fee income for bank-owned insurance brokerage firms slipped more than 5 percent largely due to the income drop at two major brokerage firms, Wells Fargo and Citigroup.
In the latest Michael White Bank Insurance Fee Income Report, bank holding companies recorded $1.72 billion in insurance brokerage fees in Q1 of this year, down $90 million from the same period in 2012.
During the period, revenues at Wells Fargo & Co., a P&C broker, dropped 10 percent to $407 million and Citigroup Inc., a life broker, fell 61 percent to $197 million. Wells Fargo and Citigroup are ranked No. 1 and No. 3, respectively, on the list of top 12 bank-owned brokers.
Wells Fargo has attributed the drop in insurance income to lower commodity prices in its crop insurance company and discontinuation of lender-placed insurance commissions.
No. 2 on the list, BB&T Corp.—a mix of P&C and life insurance business—saw its fees increase 37 percent to $335 million. In fourth place is Bank of America Corp., which went from a $67 million loss in Q1 2012 to $138 million.
Michael White, the bank consulting firm's president, says bank holding companies made real progress in insurance revenues in the first quarter. Of 256 banks that are on track to earn $250,000 in annualized insurance brokerage income, 168 showed positive growth, up 16 percent from 2012.
The number of banks with double-digit increases in insurance brokerage fees over the prior year rose from 94 in 2012 to 116 so far this year. The results, he adds, point to continued, meaningful growth in insurance fee revenues for the banks.
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