MBNA Could Epand Bank of America Insurance Sales

MBNA, which is much smaller than Bank of America in terms of assets, ranks eighth on the ABIA bank holding company insurance revenue list, with $200 million in 2004 insurance revenue. Insurance revenue accounted for 2.43% of MBNA's total noninterest income.

Although neither Bank of America nor MBNA breaks out insurance or annuity sales in financial statements, a Bank of America spokeswoman says ABIA's estimates are "in the ballpark."

Bank of America executives have predicted that about 10% of the combined companies' earnings would come from wealth and investment management services. Of the remainder, 55% would come from consumer and small business banking; 17% from business and financial services; and 11% from capital markets and investment banking.

The bulk of MBNA's customers are charge cards customers. Through direct mail and telemarketing, the company sells an array of financial products to those customers, including insurance, mutual funds and annuities. MBNA established its insurance agency, MBNA Insurance Services, in 1996 to market a variety of property-casualty and life and health products.

Bank of America was a pioneer in bank insurance and annuity sales. Today, although the company has a subsidiary devoted to insurance sales, it has been taking mostly a "wait and see attitude" toward insurance, says Kenneth Kehrer, a bank-insurance consultant in Princeton, N.J.

"But it does have a growing life insurance business through its financial consultants, who take a financial planning approach," Kehrer says. "Unlike rival banks, it has not been aggressive in buying agencies."