US banks that sold insurance during
2008 were generally more profitable than those that had no
involvement in insurance, indicates a study by data research firm
Bank Insurance Market Research Group (BIMRG).
The conclusion was drawn from analysis of data
published by the FDIC covering 7,563 commercial banks and savings
banks. Overall median net income for all 7,563 banks fell from
$1.071 million in 2007 to $686,000 in 2008, a decline of 36
percent, noted BIMRG’s managing director Andrew Singer.
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“Nonetheless, the data suggests that pursuing
a diversification strategy – of which insurance brokerage is often
a key part – may have again paid off for banks in 2008,” Singer
continued.
Specifically, 3,338 banks (44 percent) of all
banks analysed reported some insurance activity in 2008. Those
banks with some insurance activity reported a median net income of
$1.16 million in 2008, which was 69 percent higher than the median
for all banks analysed.
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