Definition of Bancassurance

Bancassurance in French means the selling of insurance products by banks through their own distribution channels. The word is a combination of "banque or bank" and "assurance" signifying that both banking and insurance is provided by the same corporate entity. According to Wikipedia, Bancassurance is the term used to describe the sale of insurance products in a bank. A great many people have tried to come up with a comprehensive definition of the term "Bancassurance". It is often defined as the distribution of insurance products by banks but, in fact, it is much more than that, especially if we consider the history and practices of all the different Bancassurance operators around the world. Bancassurance is ordinary insurance with a more powerful distribution network that has a strong affinity with its private and business customers. Florido (2002) suggested that Bancassurance is defined as, any level of cooperation between banks and life insurance companies in selling their products to their target customers. The executive director of ING Group, Huizinga (1993) observed, “Bancassurance is the distribution”. A number of insurance and financial institutions have researched the spread of banks selling insurance and defined Bancassurance. According to a periodical issued by the Swiss Reinsurance Company (Swiss Re No.7/2002), Bancassurance is defined as the distribution of insurance products by banks. Munich Re (2001) points out that Bancassurance is the provision of insurance and banking products and services through a common distribution channel and/ or to the same client base. The usage of the word picked up as banks and insurance companies merged and banks sought to provide insurance, especially in markets that have been recently liberalized. It is a controversial idea, and many feel it gives banks too great a control over the financial industry.