Banks increase income from insurance sales. (Briefing).

While banks in general have seen increases in insurance fee income, smaller banks have made greater progress in increasing income from insurance sales, according to an industry review.

The mean insurance fee income compared with noninterest income for banks with more than $10 billion in assets is 2.24%, compared with a rate of 8.26% at banks with less than $100 million in assets, said Michael D. White, president of Pennsylvania-based Michael White Associates LLC, a "banks in insurance" consulting firm.

Of banks with assets topping $10 billion, 77% participate in insurance, with income from insurance fees of $1.95 billion through the first nine months of 2002--up 49.8% from $1.3 billion recorded for the same period in 2001, White said. These large banks--83 in all--accounted for 73.2% of banks' insurance income, a 1,300 basis-point increase over their year-to-date 2001 bank-market share, he said.