Insurance companies looking to expand their businesses internationally may wish to consider agreeing “bancassurance” deals with major banks in the markets they’re interested in, Finaccord, the market research, publishing and consultancy company, has found, citing just-published research on the subject.
The bancassurance concept isn’t exactly new, Finaccord points out, noting that there already some significant bancassurance partnerships in force between insurers and the world’s 500 largest retail banking groups – which, in fact, it has ranked on the basis of the number of partnerships various insurers hold.
BNP Paribas Cardif is the insurance group holding the most such bancassurance partnerships, followed by AXA and MetLife, the Finaccord data shows.
“Based on an investigation into the consumer banking operations of the top 500 retail banking groups worldwide, Finaccord’s research established that BNP Paribas Cardif was being utilised as an insurance partner for at least one bancassurance product by a total of 81 of the 500 banking groups,” Finaccord said, in a summary of its research findings.
“[That] France-based insurance group was followed by AXA, with a total of 78 [bancassurance] partnerships, and MetLife with a total of 75 agreements.
“Overall, among the 20 most prominent insurance groups in terms of their number of relationships with the top 500 banking groups, ten originated from Europe, five from North America and five from the Asia-Pacific region.”
Not that it is easy for insurance companies to secure partnerships with the banks, Finaccord’s researchers note. Finaccord consultant Stefan Wagner, for example, notes that “competition among international insurance groups for bancassurance partnerships has been intense in recent years”, a consequence “of the high or rising importance of bancassurance as a distribution channel in a number of insurance markets, including China, Indonesia and Thailand in the Asia-Pacific region, Poland and Spain in Europe, and Brazil and Mexico in Latin America”.
Nevertheless, he also points to the fact that many banks have substantially expanded their offering in the area of insurance, not only into new product areas, but also into alternative sales channels, including digital distribution, which in turn “has created more partnership opportunities for insurers”.
Wagner notes that in addition to looking at the total number of partnerships specific banks and insurers have, another key measure of this market is the number of joint venture and strategic partnerships, as these “commonly have a long-term focus, and often generate substantially more revenue than looser distribution agreements”.
He adds: “As such, international insurance groups are increasingly seeking these types of deals. For example, major agreements established during 2017 included those of Allianz with Standard Chartered, and of Chubb with DBS, both for non-life insurance, and spanning multiple countries in the Asia-Pacific region.”
The Finaccord report, Global Bancassurance: Product and Partnership Strategies of the World’s Top 500 Retail Banking Groups, is available to purchase from Finaccord, an arm of London-based Aon plc, the LSE- and NYSE-listed professional services company.