Bank-owned insurers have effectively doubled their market share in personal lines between 2000 and 2009, according to the MSA/Baron Outlook Report Q1-2010.
Meanwhile, the broker channel has seen its market share in personal lines sink over the past decade from 66.6% to 59.5%.
"With the current rules in place, TD and RBC are chewing their way in ever-increasing chunks of the personal lines pie," MSA Research Inc. president and CEO Joel Baker wrote in the MSA/Baron Outlook Report Q1-2010. "Their growth has far outstripped broker writers and other non-bank writers by huge margins.
"Their share of the non-commercial space effectively doubled since 2000 from 5.3% to 10.6% in 2009, while brokers saw their share slip and other [non-bank] direct writers' shares effectively went nowhere."
Non-bank direct writers had a personal lines market share of 29.9% in 2009, which has been relatively flat since 2000. [It was 28% in 2000.]
Bank-owned insurers turned in a 7.7% return on equity (ROE) in 2009, compared to a 4.5% ROE for personal/multi-line broker writers and 2.2% for non-bank direct writers.
"Where the banks shine is in their capital efficiency as evidenced by superior ROEs in most years and especially since 2004."
Bank-owned insurers reported net premiums written of $2.88 billion in 2009, whereas personal/multi-line broker writers wrote $16.1 billion and non-bank direct writers wrote $8.1 billion.