Bankers Association Details Survey Findings On Producers Earnings
Bank life-health producers selling individual policies averaged $68,400 in total pay last year, a new study by the American Bankers Insurance Association in Washington finds.
In contrast, bank producers specializing in sales of group life and health products were the most highly compensated of all selling insurance in banks, averaging $118,200 in pay. Those selling commercial property/casualty products averaged $101,800, ABIA found, while bank producers selling personal p/c insurance averaged $46,800.
There are, however, far more producers involved in individual L/H sales in banks than there are selling group products. ABIA found staffing levels for employees involved in selling individual L/H policies ranged from 47 per bank among institutions with assets of $10 billion or less to 533 among those with over $10 billion.
That compares to an average of six group-product producers among smaller banks and 21 in larger banks.
In looking at individual L/H sales, the study found among 26 financial institutions selling these products, revenue per employee (excluding licensed employees) was $130,731 for bigger banks and $64,105 for smaller ones.
Among all banks offering individual L/H products, half offered commissions only as compensation, 31% offered commission plus bonus and 19% salary plus bonus.
Commission-only banks paid the average individual L/H producer an average of $69,700, while average compensation was $65,300 for those paying commission plus bonus and $70,000 for those paying salary plus bonus.
Producers in the top 25% in this group earned an average of $80,000 among commission-only reps, $90,000 for commission plus and $85,000 for salary plus.
Overall, customer service reps involved in individual life-health sales earned an average of $30,200. CSRs on salary averaged $32,300, and those on salary plus bonus averaged $27,200.
CSRs in the top quartile averaged $32,000, with salary-only CSRs earning $38,500 annually, vs. $29,200 for those paid salary plus bonus.
Average total bank revenue for individual life/health products was $1.1 million, yielding an average of $1,892 per 1,000 households and $145,390 per $1 billion in retail deposits, ABIA found.
Revenue and premium growth for individual sales was even stronger in larger banks.
Banks with more than $10 billion in assets averaged $2 million in individual life/health insurance revenue, compared to $300,000 for those with $10 billion or less in assets.
Revenue for the bigger banks averaged $2,470 per thousand households, vs. $802 for smaller institutions, and $202,668 per billion in deposits, vs. $112,821.
Turning to group life/health products, the study focused on 28 leading banks distributing these products and found that 71% of them used an acquired agency as their primary distribution platform, compared to 38% of those selling individual products.
The remainder sold through agencies that they had started from scratch or through alliances with outside third parties.
As for compensation, 43% of banks said they paid commissions only for group sales, averaging $107,700 per licensed rep.
Another 29% paid commission plus, averaging $146,000. Fourteen percent paid salary only, averaging $111,500, and another 14% paid salary plus bonus, averaging $101,000.
Top quartile pay for producers of group benefits was $129,500. The study did not break out top-quartile data for specific compensation formulas for group product producers.
Banks customer service representatives for group life and health products earned an average of $38,100. Of the 36% of banks that paid salary only, the average was $32,500, while the 64% offering salary plus bonus paid an average of $41,300.
Median bank income from commissions for larger banks was $2.9 million from group life/health sales, compared to $600,000 for smaller banks. Revenues for these product- per-thousand, commercial loan customers ranged from $53,038 for bigger banks to $95,734 for smaller ones.
Another key finding of the study: total insurance and annuity premiums produced by banks in 2001 reached an estimated $55 billion, up 23% over estimated 2000 premiums. That was the strongest growth yet reported by ABIA in the five years it has been conducting the survey.
The most impressive growth was in commercial lines (commercial P/C and group benefits), where estimated premiums grew from $5.4 billion to $8.9 billion, ABIA reports.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 7, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.