Bancassurance is the term used to describe the sale of insurance products in a bank. The word is a combination of "banc" and "assurance" signifying that both banking and insurance is provided by the same corporate entity. The usage of the word picked up as banks and insurance companies merged and banks sought to provide insurance, especially in markets that have been liberalised recently. It is a controversial idea, and many feel it gives banks too great a control over the financial industry. A bank is an institution that provides financial service, particularly taking deposits and extending credit. ...
In some countries, bancassurance is still largely prohibited, but it was recently legalized in countries such as the United States, when the Glass-Steagall Act was repealed after the passage of the Gramm-Leach-Bliley Act. Two separate laws are known as the Glass-Steagall Act. ... The Gramm-Leach-Bliley Financial Services Modernization Act of 1998 repealed the Glass-Steagall Act opening up competition among banks, securities companies and insurance companies. ...
Though much ado was made about bancassurance, an alternate channel to hawk risk products through banks, the channel is yet to pick up pace as of today.
Bancassurance primarily banks on the relationship the customer has developed over a period of time with the bank.
Insurance companies are positive about the bancassurance channel raking in volume business at a low cost and banks have been salivating over the fee-based income that it will bring.
The successes demonstrated by various bancassurance operations particularly in Europe have triggered an avalanche of mergers and acquisitions across continents and efforts are on to replicate the early success of bancassurance in other parts of the world as well.
Bancassurers convey the message that they want to know all about the customer in relation to their current and future financial needs and want to assist them on all those aspects of their life.
Bancassurance strategies should be driven by markets and channels, encompass a broad range of tactics and practices, and leverage the competencies of the bank and the insurer.
Feeds |
Contact