‘Bancassurance is on the Rise’ Says Swiss Re Sigma Study

Swiss Re announced that “according to a recent sigma study, bancassurance is on the rise, particularly in emerging markets. Worldwide, insurers have been successfully leveraging bancassurance to gain a foothold in markets with low insurance penetration and a limited variety of distribution channels.”

Bancassurance, the term used to describe sales of insurance products by retail banks, has become “an established and growing channel for insurance distribution.” Penetration varies, however, according to the market.

Swiss Re noted: “Europe has the highest bancassurance penetration rate. In contrast, penetration is lower in North America, partly reflecting regulatory restrictions. In Asia, however, bancassurance is gaining in popularity, particularly in China, where restrictions have been eased. The research shows that social and cultural factors, as well as regulatory considerations and product complexity, play a significant role in determining how successful bancassurance is in a particular market.”

The future for bancassurance “remains positive,” Swiss Re indicated. “While development in individual markets will continue to depend heavily on each country’s regulatory and business environment, bancassurers could profit from the tendency of governments to privatize health care and pension liabilities. In emerging markets, new entrants have successfully employed bancassurance to compete with incumbent companies. Given the current relatively low bancassurance penetration in emerging markets, bancassurance will likely see further significant development in the coming years.”

The full report is available on the Swiss Re web site at: www.swissre.com

Source: Swiss Re

Topics Legislation