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July 27, 2003 at 08:00 PM
Of 8,356 commercial banks and federally insured savings banks operating at the end of March, 251, or 3%, were engaged in insurance underwriting, according to my companys analysis of data released in June by the Federal Deposit Insurance Corporation.
This marks the first time total bank insurance underwriting income has been reported.
In the first quarter of 2003, banks mean insurance underwriting income was $583,869 and their median was $12,000.
In the same period, 3,461 banks reported $876.6 million in total income from all insurance activities, including insurance sales, insurance underwriting or reinsurance.
Of total bank insurance fee income, $146.6 million, or $1 in every $6, was from insurance underwriting or reinsurance. Other insurance commissions and fees constituted 83.3% of banks total insurance fee income.
Thirteen percent, or 60 banks with over $1 billion in assets, accounted for $138 million or 94.2% of banks underwriting income through March 31, 2003. Their mean insurance underwriting income was $2,299,800, and their median was $440,000.
One hundred ninety-one banks with assets of less than $1 billion, only 2.4% of all banks of that size, produced insurance underwriting income of $8.56 million, or 5.84% of total bank insurance underwriting income. Their mean insurance underwriting income was $44,832, and their median was $8,000. And their mean ratio of insurance underwriting income to noninterest income was 6.6%, nearly 10 times that of the 0.7% recorded by banks over $10 billion in assets. Their median ratio of insurance underwriting income to noninterest income was 2.8%.
Participation in insurance underwriting was highest among the largest banks (those with assets topping $10 billion); 34.4% of them engaged in insurance underwriting activities that generated insurance income of $106.2 million. These banks accounted for 72.5% of banks underwriting income.
Their mean insurance underwriting income was $3,425,548, and their median underwriting income was $917,000. Their mean ratio of insurance underwriting income to noninterest income was 0.7%, and their median was 0.5%.
Twenty-nine banks between $1 billion and $10 billion had insurance underwriting income of $31.8 million, or 21.7% of total underwriting income among banks. Their mean insurance underwriting income was $1,096,414, and their median was $69,000. Their mean ratio of insurance underwriting income to noninterest income was 5.2%, and their median ratio was 0.8%.
Twenty-one banks between $500 million and $1 billion in assets had insurance underwriting income totaling just $3.6 million, or 2.49% of the industrys total. Mean insurance underwriting income was $173,714, and the median was $16,000. Their mean ratio of insurance underwriting income to noninterest income was 8.6%, and their median was 0.8%.
Twenty-five banks between $300 million and $500 million in assets had $1.1 billion in insurance underwriting income, or 0.77% of the total. Mean insurance underwriting income was $45,160; the median was $20,000.
Their mean ratio of insurance underwriting income to noninterest income was 2.6%, and their median ratio was 2.1%.
Seventy-three banks between $100 million and $300 million in assets earned underwriting income of $2.8 million, or 1.93% of the total. Mean underwriting income was $38,740; the median was $7,000. Their mean ratio of underwriting income to noninterest income was 8.1%, and their median was 2%.
