Banks collected an estimated $78.1 billion from sales of insurance and annuities in 2003, up from $69.5 billion the year before.[@@]
However, the growth rate of bank insurance sales fell to its lowest point in 5 years, according to the American Bankers Insurance Association, Washington, which reported the data in its annual “Study of Leading Banks in Insurance.”
The growth rate for both insurance and annuity sales in banks was 12.4%, the lowest level in 5 years. In 2002, the growth rate was 26%, the ABIA reported.
The report attributed the slowdown mainly to an increase of just over 8% in annuity premiums sold by banks last year, well below a rise of almost 29% reported in 2002.
Even accounting for their slowed growth, annuity sales still accounted for an estimated $51.6 billion, or 66%, of total bank premiums in 2003.
Other products experienced far more growth. Commercial lines premiums grew 24% to $14.2 billion, personal property and casualty premiums grew 27% to $6.3 billion and individual life-health premiums grew 29% to $3.6 billion.
The previous year, individual life-health premiums in banks grew by around 22%.
Participation in insurance sales is increasing the most among banks with more than $1 billion in assets.
Of the surveyed banks, 86% of midsized banks, those with between $1 billion and $10 billion in assets, are involved in insurance sales, nearly equaling the 86.4% participation rate of larger banks. Of banks with less than $1 billion in assets, only 26% were distributing insurance products in 2003.
The acquisition of agencies continued to be a driving force behind the growth of banks in insurance, according to the study. Of the 391 banks surveyed, 49 reported at least one agency acquisition. Of those, 89% said that they plan additional acquisitions.