Magazine article American Banker

Smaller-Bank Selling Stagnant

Magazine article American Banker

Smaller-Bank Selling Stagnant

Article excerpt

The relatively small participation in insurance sales by banks with less than $1 billion of assets shows surprising persistence, according to the author of the American Bankers Insurance Association's annual study of banks in insurance.

"We expected to see the gap closing," said James Campbell, a senior vice president at Reagan Consulting in Atlanta and author of the study. "The gap is wider than we have ever seen." He attributed the discrepancy to a realization that "this is a business where volume matters. Banks enter with a certain amount of critical mass," and many have to look to acquisitions.

Mr. Campbell said that participation in general insurance distribution, which includes property, casualty, health, and life insurance products, is rising among banks with more than $1 billion of assets. The study found that 86.2% of midsize banks, those with assets of $1 billion to $10 billion, participated in insurance sales, and 86.4% of larger banks did so.

Banks with assets of less than $1 billion, however, had only a 25.5% participation rate in general insurance.

Bank-sold insurance premium, including that for annuities, rose to an estimated $78.1 billion last year, a 12.4% increase from the year earlier, according to the study. That growth rate was the smallest in five years, the study said.

"We saw slower growth in annuity sales," said Mr. Campbell, who noted that nearly two-thirds of bank-sold premium, or an estimated $51.6 billion, was for annuities. …

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