Large bank holding companies and stand-alone banks reported bank-owned life insurance assets of $108.6 billion in the first 6 months of 2007, up 11.1% from $97.6 billion in the first half of 2006, according to a new study.
As many companies do with corporate-owned life insurance, banks use BOLI to recover the cost of supplemental employee health insurance benefits and to offset the liabilities of retirement benefits.
The study by Michael White Associates, Radnor, Pa., found that BHCs with assets of at least $500 million boosted BOLI holdings by 11.8%, from $94.4 billion in the first half of 2006, to $105.6 billion in first half 2007.
Among the study’s other findings:
–BHCs with assets over $10 billion in assets showed the largest increase in total BOLI assets, from $82.7 billion in first half 2006 to $92.8 billion in the same period of 2007, up 12.2%.
–BHCs with assets between $1 billion and $10 billion had the highest share of BOLI assets, with 306 of 365 BHCs, or 84%, reporting such assets in the first 6 months of 2007. This was up from 285 out of 344 BHCs, or 83%, in 2006.