Bancassurance is growing in many Asian markets, buoyed by deregulation of banking sector on one hand and insurance companies intending to optimize distribution via banks on the other. On the local level, bancassurance business in Asia-Pacific countries has evolved in different ways.
Different geographies are targeting different customer bases and products. For instance, in countries like Malaysia, Indonesia and Thailand, where Muslim populations are high and growing, insurance companies are joining hands with banks to provide a wide range of Islamic finance and takaful insurance products. Additionally, in other emerging economies in predominant agricultural countries like India, banks are joining hands with cooperative societies and regional rural banks to reach out to a vast, untapped population.
The Asia-Pacific region's distribution is currently “agent” dominated, in terms of both life and non-life, but bancassurance is growing quickly. Penetration of bancassurance ranges from <10% of new business in countries like Japan and Thailand to as high as 40% to 50% in countries like South Korea and Malaysia.
The existing bank branches and other infrastructures, like ATM, online, telephone and mobile modes, have triggered the insurance companies to come up with various innovative models in collaboration with banks to effectively use the already existing channels.
Bancassurance is one of the growing models that insurance companies are targeting to reach various customer segments. Since bank customer are co-related to savings, and insurance customers are co-related to retirement, pension, etc., routing insurance products via bank branches will not only build long-lasting relationships with customers, but also act as one-stop shop for all financial needs of customers.
This blog has been reprinted with permission from Celent. Prathima Rajan is an analyst based in Celent's India office.
Readers are encouraged to respond to Prathima using the “Add Your Comments” box below. She also can be reached at firstname.lastname@example.org.
The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.
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