Bancassurance

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Related to bancassurers: bankassurer

Bancassurance

Insurance provided by a bank. For example, a bank could offer life insurance in addition to its savings, loan, and investment services. Proponents argue that bancassurance can streamline internal and government regulations. For example, a bank offering a mortgage may require borrowers to buy homeowners insurance; if bancassurance is available, the borrower could purchase a policy directly from the bank without needing to shop around. However, bancassurance is somewhat controversial; critics contend that allowing banks to sell insurance gives them too much control over the financial services sector. As a result, some countries prohibit it. The United States has allowed it since the passage of the Gramm-Leach-Bliley Act.
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However, their study focused on bancassurers only and still leaves the question open for assurbanks, the insurers who are doing banking business.
Teather & Greenwood analyst Mr Tim Young agrees, pointing out that the most successful European bancassurers operate in France and Spain, where the life policies being sold are more like savings accounts than the complicated pensions sold in Britain.
Will bancassurers take away market share from IFAs in the distribution of insurance over the next five years?
Overall, in a market in which the distribution share of bancassurers in non-life insurance is higher than that in life insurance, across the 54 banks and other lending institutions researched in Chile, Finaccord's research identified 241 bancassurance distribution initiatives for the various types of insurance investigated.
IFA networks will look towards consolidation to retain their competitive features whilst Bancassurers will either leave the market or market themselves as restricted due to the costs of RDR up skilling.
Bancassurers have failed to exert pressure and gain a substantial market share in both the life assurance and pensions market over the past five years.
Bancassurers will benefit from the implementation of the RDR, while IFAs will continue to seek new business
Though the market has been contracting since 2008, the insurers have adjusted their strategies and started to show growth again in 2010, and when the housing market returns to strength the bancassurers who sell much of their home insurance book on the back of mortgage arrangements, and the rest of the market, will start to see more dramatic growth.
Bancassurers hold the largest share of the UK household insurance market
With the UK bancassurance sector operating in an environment with changing regulatory proposals and challenging market conditions, Datamonitor assesses the attractiveness of the bancassurance channel, and concludes that while bancassurers will struggle to maintain their share of the life and pensions market, the Retail Distribution Review presents opportunities for the sector.
Rapid growth in retail lending markets throws up opportunities for bancassurers to cross-sell different types of accident and health insurance instead of or in addition to mainstream creditor or payment protection insurance.