Bank Insurance Sales
The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLB) removed many of the Depression-era barriers that restricted affiliations between banks, securities firms and insurance companies. The arrangement that provided the major impetus for the passage of GLB, Citigroup’s merger with Travelers Insurance Group, was short lived, with Citigroup selling off its Travelers property/casualty insurance and life insurance units in 2002 and 2005, respectively. The “financial supermarkets” envisioned by GLB have not transpired. Instead, banks have tended to concentrate on distributing insurance products by buying existing agencies and brokers rather than by setting up their own agencies or purchasing insurers. For their part, insurance companies have set up thrift or banking divisions rather than buying existing banks. The 2007 to 2009 recession and resulting regulatory changes prompted some structural changes in the financial services industry, with some insurers selling their banking units.
TOP TEN BANK HOLDING COMPANIES BY INSURANCE BROKERAGE FEE INCOME, 2013-2014 (1)