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Insurance Brokerage Fee Income of BHCs Up Nearly 15%

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Insurance brokerage fee income of bank holding companies rose nearly 15% during the first three quarters of 2011 compared to the same period in 2010, according to a new report.

Michael White Associates, Radnor, Pa., published this finding in a summary of results of a survey sponsored by The Prudential Insurance Company of America’s Individual Life Insurance business. Results are based on data from all 6,740 commercial and FDIC-supervised savings banks, plus 927 top-tier bank holding companies operating on September 30, 2011.

The survey tallied a record $5.89 billion in insurance brokerage fee income for the first three quarters of 2011. That’s up 14.4% from the $5.14 billion posted for the same period in 2010.

Thus far, the report adds, 64.6% of large, top-tier BHCs engaged in insurance brokerage activities.

Third quarter BHC insurance brokerage income was up 56.9% to $2.01 billion. This compares to $1.28 billion for the third quarter of 2010, the latter figure depressed by U.S. BHC insurance losses overseas.

The report adds that third quarter 2011 revenue ranks as “the third largest quarterly amount of insurance brokerage revenue” in history.”

Bank holding companies with more than $10 billion in assets continue to have the participation (89%) in insurance brokerage activities. These BHCs produced $5.33 billion in insurance fee income in the first three quarters of 2011. That’s up 16.2% from the $4.59 billion generated year-to-date in 2010.

Large bank holding companies account for 90.6% of all BHC insurance brokerage fee income earned thus far in 2011, the report says.

Bank holding companies that generated the largest insurance brokerage fee income in 2011 include Citigroup Inc. ($1.66 million), Wells Fargo & Company ($1.26 million) and BB&T Corp. ($706,851). These figures compare with fee income of $1.32 million, $1.34 million and $712,834, respectively, in the third quarter of 2010.