Bancassurance

BANCASSURANCE - A PERSPECTIVE

David K. Kirui

Table of Contents

Introduction ......................................................................................................................................2 Why enter into bancassurance?..........................................................................................................2 Contractual relationship between banks and insurers - which model ? ................................................3 Bancassurance Products .....................................................................................................................4 Advantages and Disadvantages of Bancassurance ...............................................................................5 Conclusion .........................................................................................................................................7

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Introduction One of the most significant changes in the financial services sector over the past few years has been the growth of bancassurance. Banking institutions and insurance companies have found bancassurance to be an attractive and profitable complement to their existing business activities. This in essence is the convergence of the Insurance and banking sectors of the economy. The banks are encroaching in the insurance sector at a faster rate and how does the Insurance sector look at this? As a threat or as an opportunity? The answer hopefully will reveal itself as you go through the paper. This paper highlight the ways in which bancassurance operation can be set up and outline the various observed methods/ models in use today. Bancassurance broadly refers to the collaboration between banks and insurers to distribute insurance products to the same clientele or same client base. Simply, bancassurance is the distribution of insurance products by banks or the amalgamation of assurance and banking business within a financial environment i.e. bank or building society....