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Insurance Companies’ Earnings Credit Rates Lag Market

Second quarter results are in, and NDepth Bank Fee Analysis revealed that Insurance, Real Estate and Finance companies are earning well below market rate on their cash balances.

Key findings include:

  • Insurance company net earnings credit rates were more than 1.25% below other investment options, including money market mutual funds, resulting in an annual opportunity cost of $127,000 for every $10 million in deposit balances.
  • ECRs varied widely among Insurance companies, even at identical balance levels.
  • ECRs for Insurance companies were higher than for other companies, but still below market.
  • Balance Assessment Fees further depressed Insurance company returns.

New technology is now available to help corporate treasurers put in place world class bank fee management programs.  These bank fee analysis solutions such as NDepth empower financial officers to manage and benchmark their bank service fees, compensating balances, earnings credit rates and balance assessment fees.

In the past, companies had to wade through dozens of pages of account analysis statements or use early generation tools driven by complex bank service codes and EDI 822 files. With our NDepth Bank Fee Analysis solution, companies can now simply drag and drop their account analysis PDF files and see their results.

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