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Bank Insurance and Brokerage News
Wells Fargo Private bank introduces new life insurance leadership team Wells Fargo Private Bank (San Francisco) announced today the leadership team for its newly established national life insurance business group. Stan Gregor, head of the Eastern markets for Wells Fargo Private Bank, will oversee the insurance business nationally for Wells Fargo’s wealth management division in addition to his current responsibilities managing The Private Bank’s Eastern region. Leading the insurance team is Robert Chewning, national insurance sales manager for Wells Fargo Private Bank. Reporting to Chewning are four senior directors of life insurance, newly created positions responsible for leading regional insurance teams that focus on the high-net-worth and affluent market segments. “As Wells Fargo Wealth Management and Wachovia Wealth Management continue to integrate their businesses, life insurance remains an integral part of our wealth management offering to clients,” said Gregor. “Typically following an economic downturn, business owners and wealthy individuals return to the fundamentals with a desire to refocus on life insurance as a way to manage their risk. Rob Chewning has put together a quality team of insurance experts who can help our clients with their complex needs. With our new business model in place, we will be well-positioned to serve clients for the increase in insurance demand that we anticipate during the recovery.” Reporting to Chewning are: David Coggins will be senior director of life insurance for the Mid-Atlantic and Carolinas regions. Previously, Coggins developed The Insurance Academy, LLC as a consulting and training firm specializing in helping institutions and insurance carriers develop and grow insurance distribution. Prior to that, he was the director of insurance services for Fifth Third Bank. Dennis Tygart will be senior director of life insurance for the Southeast and Florida regions. Previously, Tygart was managing director of wealth management for First National Bank. He also has held senior management positions at American Express Financial and AXA Equitable. Matt Curran will be senior director of life insurance for the Northeast and PennDel regions. Previously, Curran was the East Coast sales manager for Lincoln Financial Distributors’ banking and brokerage division. Prior to his tenure at Lincoln Financial Distributors, he worked for US Allianz and MetLife Financial Services. Steve Matter will be senior director of life insurance for the Western region. Previously, Matter was the national sales manager for Smith Barney’s insurance group. He also has held management roles at E.F. Hutton, Merrill Lynch and Paine Webber. “These leaders are some of the insurance industry’s top talent and each possesses a deep understanding of how life insurance can complement an overall wealth plan,” said Chewning. “As we enter a period of economic recovery, we have an incredible opportunity to help clients not only manage risk, but also build and transfer wealth, create liquidity, and protect savings, investments and other important assets.” (July 27, 2010) *** HUNTINGTON INSURANCE SELECTS AL THOMAS AS MANAGING DIRECTOR Al Thomas, an 18-year veteran in the insurance industry, has been named managing director of Huntington Insurance, a wholly owned subsidiary of Huntington Bancshares Incorporated “Al will lead the service team in enhancing the companies’ strong customer service culture and play an important role in setting our strategic direction,” said Peter Dunlap, president and chief executive officer of Huntington Insurance. “Al’s background in sales and marketing, business development, underwriting and process improvement, combined with his extensive knowledge of process and technology, position him to provide outstanding leadership for Huntington Insurance,” added Dunlap. Thomas has more than 18 years of experience in the insurance industry. He began his career with Sentry Insurance in 1992 as a commercial underwriter. He also served as an underwriting director for several companies, including Kemper Insurance Companies and The St. Paul Companies. Most recently, he was president and managing director of the Minnesota division of a leading global insurance broker. Thomas holds a bachelors of science degree in management and finance from University of Wisconsin-Stevens Point. Huntington Bancshares Incorporated is a $52 billion regional bank holding company headquartered in Columbus, Ohio. Huntington has more than 600 banking offices. (July 27, 2010). *** Brad GRubb Joins Fifth Third Securities Fifth Third Securities recently hired three experienced financial professionals, Michelle Griffith, Bradley Grubb and Britt Woods, to lead brokerage and insurance operations for three key markets in the Midwest and the South. “We’re fortunate that high-level talent like Michelle, Bradley and Britt chose Fifth Third Securities as their home,” said Howard Hammond, senior vice president and CEO of Fifth Third Securities. “We’re excited to have them on board and look forward to the three providing their experience to our markets.” Grubb, a 22-year veteran of investments and insurance, will serve as Area Sales Manager for the Western Ohio market. Most recently, Grubb was president and CEO of BancWest Investment Services headquartered in California. Grubb was responsible for combining brokerage operations and successfully relocating the investment services’ corporate headquarters. Griffith, a 17-year financial industry veteran with a Fortune 100 institution, will serve as Area Sales Manager in the Chicago area. Griffith began as a sales assistant with her former institution and worked her way to managing more than 20 advisors in the firm’s Chicago office. Woods, a seven-year veteran and million-dollar revenue generating financial professional with a former Fortune 500 institution, will serve as Area Sales Manager for the Tennessee and Georgia markets. (June 24, 2010) *** Bank Brokerage Index Declines 4 Percent in 4th Quarter The BISA-Singer’s Bank Brokerage Index decreased 4 percent in the 4th quarter of 2009.
Brokerage revenues are comprised of two groups: annuities (“fees and commissions from sales of annuities”) and securities (“fees and commissions from securities brokerage activities”) as reported to the FDIC. PNC Bank’s individual index could not be calculated because of its inclusion of National City Bank’s numbers for the first time. PNC has historically been a strong performer, and its temporary omission hurt the 4th quarter Index (PNC’s index was 114 in the 3rd quarter). Still, its inclusion would not have raised the overall Index by more than a single percentage point. (March 11, 2010 *** Bank Holding Company Annuity Index Gains 3% in Third Quarter The BISA-Singer's Bank Holding Company (BHC) Annuity Index advanced 3 percent in the third quarter of 2009, the Bank Insurance and Securities Association (BISA) announced today. The Index is an average based on quarterly annuity (both fixed and variable) revenues (not sales) at 10 large bank holding companies as reported to the Federal Reserve Board. The index increased from 106 in the second quarter to 109 in the third quarter. Aggregate annuity revenue at the 10 bank companies covered was virtually unchanged—$292.36 million compared with $293.08 million in the previous quarter.
The Index is produced jointly by BISA and Singer's Annuity & Funds Report. “The Index recovered somewhat from the 2nd quarter, when it plunged 15 percent and reached its lowest point since 2007” said Andrew Singer, editor of the Index. "Three bank companies did particularly well: BB&T Corp., Huntington Bancshares, and KeyCorp all gained 20 percent or more compared with the previous quarter.” (January 14, 2010) *** Bank Brokerage Index Advances 5 Percent in 3rd Quarter Bank Brokerage Index increased 5 percent in the third quarter of 2009.
The Index is an average based on quarterly brokerage revenues at 20 operating banks (see table above) with established retail investments programs. It sets 2007 1st quarter as a baseline (100). The index rose from 98 in the second quarter of 2009 to 103 in the third quarter of 2009. Aggregate brokerage revenue of the 20 banks covered increased 9 percent—from $156.56 million to $173.17 million. Fourteen of the 20 banks in the Index improved their brokerage performance in the 3rd quarter. Big gains were notched by Compass Bank (up 46 percent), First National Bank of Omaha (up 26 percent), KeyBank (up 23 percent), and Branch Banking & Trust (up 18 percent). “Aggregate securities revenue increased 13 percent in the quarter, following a gain of 13 in the previous quarter,” said Heywood Sloane, Managing Director of the Bank Insurance and Securities Association. “Annuity revenues increased 9 percent.” Brokerage revenues are comprised of two groups: annuities (“fees and commissions from sales of annuities”) and securities (“fees and commissions from securities brokerage activities”) as reported to the FDIC. (December 3, 2009) *** Wells Fargo, BB&T, Head Bank Insurance Honor Roll Wells Fargo (CA), BB&T (NC), and BancorpSouth (MS) were among those named today to the Bank Insurance Market Research Group’s (BIMRG) 5-year Bank Insurance Honor Roll. Announced on the eve of publication of the fifth annual edition of the group’s Who’s Who in Bank Insurance (WWBI), the industry’s leading bank insurance study, the awards are for top bank insurance performance sustained over a five-year period.
To qualify, bank insurance programs had to register brokerage revenue growth every year between fiscal 2004 and 2008—with at least 40 percent revenue growth over the entire five-year period. They also needed to remain among the top 100 bank insurers in WWBI’s annual survey each year during the period. Also named were Eastern Bank Corporation (MA), First Niagara Financial Group (NY), M&T Bank Corporation (NY), First Financial Holdings (SC), Johnson Financial Group (WI), Bremer Financial Corp. (MN), Tompkins Financial Corporation (NY), S&T Bancorp, Inc. (PA), and 1st Source Corporation (IN). “Despite a ‘soft’ insurance market through much of the period, and a severe recession over the past two years, these 12 bank programs were able to sustain annual insurance growth,” said WWBI Editor Andrew Singer. “At a time when many other banks have headed for the doors, these banks have maintained their commitment.” Wells Fargo (ranked #1 in WWBI’s 2009 edition), BB&T (3rd), and BancorpSouth (7th) “have maintained growth through a steady diet of insurance agency acquisition,” said Singer, “but others on the list, such as Bremer Financial, Johnson Financial, and Tompkins Financial have done so mostly through organic growth.” While insurance kept pace with bank asset growth over the five-year period at some institutions (e.g., BB&T), at others, insurance far outstripped asset growth. Balance sheet assets increased at Eastern Bank by only 8 percent from 2004-2008, but insurance brokerage revenues rose 67 percent. Assets at First Niagara rose 15 percent, while insurance revenues soared 187 percent. First Financial Holdings grew assets 13 percent but insurance brokerage revenues increased 42 percent. The table above is from the fifth annual edition of Who’s Who in Bank Insurance (WWBI), which will be published in early December. The study is distributed each year by the Bank Insurance & Securities Association (BISA) and is sponsored by Prudential, Symetra, and INVEST Financial. (November 25, 2009). *** Bank Holding Company Annuity Index Drops 15% in 2nd Quarter The BISA-Singer's Bank Holding Company (BHC) Annuity Index fell 15 percent in the second quarter of 2009.
The Index is an average based on quarterly annuity (both fixed and variable) revenues (not sales) at 10 large bank holding companies as reported to the Federal Reserve Board. The index fell from 125 in the 1st quarter to 106 in the second quarter. Aggregate annuity revenue at the 10 bank companies covered declined 11 percent—from $330.76 million to $293.08 million. “This marks the largest slump in the Index since we began tracking annuity revenues in the 1st quarter of 2007,” said Andrew Singer, editor of the Index. “In the second quarter, all ten bank companies experienced annuity declines compared with the previous quarter.” During the same period, sales (not revenues) of the subset of fixed annuities across all depository institutions were an estimated $8.7 billion, according to the Beacon Research Fixed Annuity Premium Study. This was a decrease of 20 percent from the prior quarter and 1 percent compared to second quarter 2008. The change was primarily due to falling fixed annuity credited rates and a declining rate advantage over bank certificates of deposit, said Beacon. (October 14, 2009) *** INVEST Names Dowden CEO INVEST Financial Corporation (Tampa, FL) announced that it has named Steve Dowden president and chief executive officer. Dowden succeeds Lynn Niedermeier, who retired in July after serving as the firm’s president and CEO since 2001. Dowden, 48, joins INVEST from CUNA Mutual Group, an investment and insurance company serving the credit union industry. As senior vice president of distribution and president and CEO of CUNA Brokerage Services, Inc., he led a sales force of 550 advisers and was responsible for all sales within CUNA’s Asset Accumulation division. Prior to joining CUNA, Mr. Dowden served as president of the investment and insurance program at IBM Mid America Federal Employee Credit Union. (October 12, 2009) *** Bank Brokerage Index Plunges 11 Percent in 2nd Quarter The BISA-Singer’s Bank Brokerage Index dropped 11 percent in the second quarter of 2009 The Index is an average based on quarterly brokerage revenues at 20 operating banks (see table below) with established retail investments programs. It sets 2007 1st quarter as a baseline (100). The index fell from 109 in the 1st quarter of 2009 to 98 in the second quarter of 2009, the first time the Index has slipped below 100. Aggregate brokerage revenue of the 20 banks covered fell 6 percent (see table below)—from $166.74 million to $156.56 million. Only four of the 20 banks in the Index improved their brokerage performance in the 2nd quarter.
“Aggregate annuities revenue plunged 15 percent in the quarter, which accounted for the brokerage decline—since annuities account for 61 percent of brokerage revenues,” said Heywood Sloane, Managing Director of the Bank Insurance and Securities Association. Annuities accounted for 68 percent of brokerage revenues in the previous quarter. A resurgent stock market largely accounted for the 13 percent gain in aggregate securities revenues at the 20 banks in the Index. Brokerage revenues are comprised of two groups: annuities (“fees and commissions from sales of annuities”) and securities (“fees and commissions from securities brokerage activities”) as reported to the FDIC. The Index is produced jointly by BISA and Singer’s Annuity & Funds Report.(September 24, 2009) *** J.J. Hudock Joins ICA’s New Business Development Team Investment Centers of America, Inc. (ICA) today announced (August 20) that J.J. Hudock has joined the firm as vice president of new business development. In this role, Mr. Hudock is responsible for marketing ICA’s business capabilities to independent offices and financial institutions. He is based in Charlotte, N.C. Mr. Hudock joins ICA from UVEST Financial Services, where he served as vice president of business development since 2002. His 13 years of experience in the industry also includes positions in insurance sales management and mortgage lending. Mr. Hudock is a graduate of George Washington University and holds FINRA Series 6 and 63 registrations, as well as life and health insurance licenses. “J.J. brings a wealth of industry experience and a proven track record of building mutually beneficial relationships across multiple markets to our senior management team,” said Greg Gunderson, president and CEO of Investment Centers of America (Bismarck, ND). “He understands and embraces ICA’s philosophy, which is to help our representatives provide the best possible service to their clients. J.J. will play a key role in positioning ICA as a valuable business partner for independent advisers, banks and credit unions.” (August 20, 2009) *** Lynn Niedermeier Retires as CEO of INVEST Financial INVEST Financial Corporation today announced that Lynn Niedermeier has decided to retire and will resign her position as president and CEO of the firm. Ms. Niedermeier has served as INVEST’s president and CEO since 2001. “I am fortunate to have worked with a talented group of individuals who shared my vision for INVEST and helped build an innovative company that is a leader in the industry,” said Niedermeier. “My decision to retire was a difficult one to make, but I feel it is necessary to focus my energy on certain personal issues at this time. NPH and Jackson have always been thoroughly supportive of me, my management team and the firm’s independent culture. I am leaving the company and our reps in extremely capable hands, and I am confident that INVEST will continue to thrive.” Jim Livingston, president of the National Planning Holdings, Inc. (NPH) broker-dealer network, which includes INVEST Financial, will assume Ms. Niedermeier’s responsibilities on an interim basis. (July 6, 2009) *** BANKS THAT SOLD INSURANCE WERE AGAIN MORE PROFITABLE IN 2008 Banks that sell insurance make more money than banks that don’t. That was borne out again in 2008—even amidst the Great Recession. This conclusion follows analysis of 2008 bank data by the Bank Insurance Market Research Group. Examining FDIC call report data, BIMRG found that banks with some insurance activity had 69 percent higher (median) net income in 2008. In 2007, net income was 44 percent higher. This trend toward higher (median) net income persisted in all asset-size groups with the exception of the largest banks where there was no difference. Among 470 banks with $1 billion to $10 billion in assets, for instance, those with some insurance activity in 2008—about half the total—scored 23 percent higher in (median) net income (see table below). The trend was more pronounced in smaller banks.
“Overall median net income was off 36 percent in 2008 compared with 2007. 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,” said Andrew Singer, Managing Director of the Bank Insurance Market Research Group, “particularly at a time when banks’ traditional income sources are under pressure. An insurance agency business can help smooth out earnings and act as a hedge against interest-rate volatility.” Overall, the median net income at 7,563 operating banks and savings banks was $686,000 in 2008, down from $1,071,000 in 2007. The median at 3,338 banks and savings banks that reported some insurance activity—less than half (44%) of the total number of banks—was $1,160,000. The largest discrepancy again was in the smallest banks. Median net income at 5,243 banks with assets less than $250 million was $469,000 in 2008. (That is, the middle ranking bank in this asset-size group reported $469,000 in profits.) Among the 2,136 with some insurance activity, however, the median was $825,000—76 percent higher. The median ratio of noninterest income to total bank revenues among all 7,563 banks was 14 percent. At banks with some insurance activity, this closely watched ratio was 17 percent. Both ratios were unchanged from 2007. (May 13, 2009) *** Bank Holding Company Annuity Index Stable in 4th Quarter The BISA-Singer’s Bank Holding Company (BHC) Annuity Index declined 3 percent in the 4th quarter of 2008. “Compared with what happened in the rest of the economy in the 4th quarter, this can be viewed as a victory for bank-sold annuities,” said Andrew Singer, editor of the Index. GDP fell at a 6.2 percent annual rate, its worst quarter since 1982, and the S&P 500 Index plunged 22 percent in the 4th quarter.
The Index is an average based on quarterly annuity (both fixed and variable) revenues at 10 large bank holding companies (see table above) as reported to the Federal Reserve Board. The index declined from 118 in the 3rd quarter of 2008 to 115 in the fourth quarter (see chart below). Aggregate brokerage revenue of the 10 bank companies covered fell 4 percent—from $208.59 million to $201.23 million. Although the Index edged downward in the 4th quarter, it is still substantially ahead of the first quarter of 2007 when the Index stood at 89. That was the first quarter that BHCs reported annuity revenues to the Federal Reserve Board. (‘100’ represents the quarterly annuity average of BHCs in 2007.) (April 10, 2009) *** Associated Bank’s Bohn Named to ABIA Board William Bohn, President and CEO of Associated Financial Group, LLC (Kimberly, Wis.) has been elected to the board of directors of the American Bankers Insurance Association (ABIA). Associated Financial is the insurance unit of Associated Banc-Corp. Associated was the nation’s 19th largest bank insurance operation, according to the 2008 Edition of Who’ Who in Bank Insurance. Also elected for the ABIA Board was Val Teagarden, president and chief executive officer of First United Insurance Group. (April 2, 2009) *** American Savings Bank sells insurance agency American Savings Bank (Honolulu, HI) sold its Bishop Insurance Agency unit to Monarch Insurance Services Inc. The thrift said it wanted to focus on its banking products and services. The bank bought Bishop Insurance in 2001. The agency, nearly 150 years old, sells personal lines and business insurance. It is the oldest of the 10 top insurance agencies in Hawaii. American Savings said it was entering a strategic alliance with Monarch to make sure its customers continue to receive insurance services and products. Monarch is a 26-year-old property and casualty insurance broker with offices in Honolulu, San Francisco, Denver and Bend, Ore. (January 12, 2009) *** ![[Click here for more information on Activity
Updates]](http://www.bisanet.org/bism/images/activity_updates_brokerage2.gif) Bank of America Leader In 2008 Brokerage Income, BIMRG Reports Bank of America was again the leader in investment income, or “income from the sale and servicing of mutual funds and annuities,” with $1,792.9 million in 2008, according to the Bank Insurance Market Research Group. This marks a 15 percent decline from BofA’s leading $2,107.5 million in 2007—not surprising, perhaps, in a year when the Dow Jones Industrial Index plummeted 34 percent (its worst annual decline since 1931) and the Standard & Poor's 500 Index fell even more—39 percent. Bank of America (NC) was followed by Wells Fargo Bank, JPMorgan Chase Bank, U.S. Bank NA, and PNC Bank, NA. For more complete data on the top five banks go to http://singerpubs.com/html/databaseproducts.html. More than 1,800 operating banks and thrifts reported some investment income in 2008. Collectively, they accounted for $4,860.5 million in revenues, down 24 percent from $6,391.3 million in 2007. This marks the steepest decline in bank investment income since BIMRG began tracking this metric in 1994. Sovereign Bank (PA) was the leading thrift institution with $50.48 million in investment income, up 1 percent from 2007. In previous years Washington Mutual was the top thrift institution. Wamu, however, was seized by the government in 2008 and is now a part of JPMorgan Chase. The 100th ranked bank, TierOne Bank (NE), reported investment income of $2.64 million in 2008. In 2007, by comparison, the 100th ranked bank, Community Bank NA (NY), reported $3.0 million. This represents a decline of 12 percent from 2007. More detailed information will be available in upcoming issues of Singer’s Annuity and Funds Report. (March 26, 2009) *** Bank Brokerage Index Declines 10 Percent in 4th Quarter The BISA-Singer’s Bank Brokerage Index declined 10 percent in the fourth quarter of 2008. The Index is an average based on quarterly brokerage revenues at 20 operating banks (see table below) with established retail investments programs. It sets 2007 1st quarter as a baseline (100). The index declined from 119 in the 3rd quarter of 2008 to 108 in the fourth quarter. Aggregate brokerage revenue of the 20 banks covered fell 8 percent (see table below)—from $188.95 million to $174.17 million
*** Thrift Retail Investments Index Plunges in the 4th Quarter The BISA-Singer’s Thrift Investments Index plunged 12 percent in the final quarter of 2008. “In the fourth quarter, the Index fell for the first time below the baseline that was established in the first quarter of 2007,” said Heywood Sloane, Managing Director of the Bank Insurance and Securities Association. “Thrift brokerage programs are clearly feeling the effects of the recession.” The Index is an average based on the change in quarterly investments income at 10 thrift institutions (see table below) with mature retail investments programs. It sets 2007 1st quarter as a baseline (100). The Index declined from 113 in the 3rd quarter of 2008 to 99 in the fourth quarter. Aggregate investment revenue of the 10 thrifts covered (see below) fell more precipitously—25 percent—from $46.8 million to $35.1 million. Another thrift index, Singer’s ‘125’ Thrift Investments Index, which tracks 126 OTS-reporting thrift institutions, also declined in the 4th quarter, although not as dramatically: It fell from 106 to 99. Significantly, however, it too dropped below the baseline for the first time.
Investment revenues are defined as income from “the sale and servicing of mutual funds and annuities” as reported each quarter to the Office of Thrift Supervision (OTS). These packaged investment products comprise the vast majority of revenues in thrift retail brokerage programs, often more than 90 percent. The Index is produced jointly by BISA and Singer’s Annuity & Funds Report, who also generate the BISA-Singer’s Bank Brokerage Index, which tracks bank annuity and securities revenues in commercial banks. Commercial banks have yet to report 4th quarter brokerage revenues.
(February 23, 2009) Bank Brokerage Index Drops 1 Percent in 3rd Quarter The BISA-Singer’s Bank Brokerage Index declined 1 percent in the third quarter of 2008. The Index is an average based on quarterly brokerage revenues at 20 operating banks (see table below) with established retail investments programs. It sets 2007 1st quarter as a baseline (100). The index declined from 120 in the 2nd quarter of 2008 to 119 in the third quarter.
Brokerage revenues are comprised of two groups: annuities (“fees and commissions from sales of annuities”) and securities (“fees and commissions from securities brokerage activities”) as reported to the FDIC.
Here are the 20 operating banks that make up the Index, all with well established retail brokerage programs:
*** Daggs to Head Wells Bank Brokerage Unit InvestmentNews has reported that Wells Fargo’s Chuck Daggs would head the bank’s combined bank brokerage operations (as opposed to non-bank brokerage operations like Wachovia Securities.) These were formerly known as Wells Fargo Investments LLC at Wells and as Investment Services Group at Wachovia. Daggs will also continue to run Well’s high-net-worth banking businesses in the Western U.S. Wachovia’s Stan Gregor will run that area in the Eastern U.S., InvestmentNews reported. (January 13, 2009) *** The BIMRG/BISA Insurance and Brokerage Activity Updates page is edited by Andrew Singer. He can be contacted at a.singer@singerpubs.com © 2010 Bank Insurance MArket Research Group, All rights reserved. | |||||||||
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