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Bancassurance is a procedure of arrangement between an insurance company and a Bank that enables the insurance to sell its services and products to the clients of the bank.
This partnership agreement is said to be profitable for both parties. While the insurance company gets to expand its clientele base, the bank gets to earn extra revenue.
Although several Insurance companies have not completely accepted this practice, still, Bancassurance is extremely implemented through Europe wherein the practising of this activity goes back to history.
Several European banks dominate the global bancassurance Market. For example, back in 2015, Philippine National Bank and Allianz (an asset and insurance management company based in Germany) came up with a joint venture through which Allianz got access to more than 660 branches of commercial bank and approximately 4 million customers situated in the Philippines.
The global market for Bancassurance is growing considerably. While Asia-Pacific is the significant region where this practice is executed; Europe is a substantial contributor to the evolving global market of Bancassurance, owing to increasing investment from their banks.
Bancassurance provides a variety of advantages to customers. Out of these, convenience is regarded the most. Considering that the banks are the ultimate destinations for financial requirements, people can quickly fulfil their insurance needs here as well.
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On top of that, for both the insurance companies and banks, Bancassurance helps increase the diversification of revenue by bringing higher profit and volume of customers for both the parties. Furthermore, such factors also contribute significantly to the growth of Bancassurance across the globe.
The preventive factors of the global bancassurance market are the ones that are risk associated with the reputation and integrity of the banks. Keeping this in mind, several stringent rules have been enforced in certain regions where this practice takes place.
However, on the Flip side, the activity of Bancassurance is prohibited in certain countries. This may impact the growth of banks and insurance companies negatively. But, with the global trend going towards the liberalization of banking rules and laws, opening the domestic market to foreign companies may soon become possible with Bancassurance.