Bancassurance Market Research, 2031
The global bancassurance market was valued at $901.5 billion in 2021, and is projected to reach $1.8 billion by 2031, growing at a CAGR of 7.4% from 2022 to 2031.
Bancassurance is an arrangement between a bank and an insurance company allowing the insurance company to sell its products to the bank's client base. This partnership arrangement can be profitable for both companies. Banks earn additional revenue by selling insurance products, and insurance companies expand their customer bases without increasing their sales force.
Bancassurance provides increased profitability for both the banks and the insurance companies as banks receive extra commission on the sale of insurance policies from the insurance companies, whereas insurance companies get a customer base of the bank to sell their policies without having to invest in any marketing of their products. Therefore, this is a major factor driving the bancassurance market growth. In addition, the retention rate is higher as customers are loyal towards their banks and purchase the policies as it is good for them as per the financial advisory given to them by their banks. Thus, this factor drives the of the bancassurance market size growth. Furthermore, growing number of customers in banks mostly in the developing countries provides a major customer base for the bancassurance market, which drives the growth of the market.
However, the sale of policies depend upon the footfall of customer in a bank, if the customer footfall in a bank branch is less, the sale of insurance policies in that branch is also lesser in number as compared to other branches where the footfall is higher. Therefore, this is a major restraint for the bancassurance market. Furthermore, it is difficult for the bank employees to do cross selling of insurance products and services along with their bank products. Thus, these are the major factors hampering the bancassurance market share. On the contrary, growing demand for insurance products and services among customers and rising awareness of insurance policies will provide major lucrative opportunities for growth of the bancassurance market.
The report focuses on growth prospects, restraints, and trends of the bancassurance market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the bancassurance market size.
Segment Review
The bancassurance market is segmented on the basis of insurance type, model type, end user, and region. By insurance type, it is segmented into life insurance and non-life insurance. By model type, it is bifurcated into pure distributor model, strategic alliance model, joint venture model, financial holding, and others. By end user, it is segmented into personal and business. By region, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
By Insurance Type
The Life Insurance segment attained the highest market growth. there have been significant customer centric innovations in sell of Life Insurance policies through bancassurance which include better product design and pricing with more options and benefits that can be customized for various classes of lives, online and app-based policies, technology-enabled KYC verification process leading to greater flexibility and availability of Life Insurance policies across the globe.
Based on insurance type, the life insurance segment attained the highest growth in 2021. This is attributed to the fact that there have been significant customer centric innovations in sell of life insurance policies through bancassurance which include better product design and pricing with more options and benefits that can be customized for various classes of lives, online and app-based policies, technology-enabled KYC verification process leading to greater flexibility and availability of life insurance policies across the globe. Furthermore, non-life insurance is forecasted to grow at a significant growth rate attributing to the adoption and usage of internet and social networking sites as alternative distribution channels have been gradually increasing among non-life insurance customers.
By Region
Europe attained the highest market share in 2021. This is primarily driven by the growing financial, banking, and insurance sectors across the region. In Germany, the bancassurance channel distributed about 19% in 2021 of life insurance premiums and about 7% of premiums in non-life insurance, which is marginally greater than the previous year’s premiums shares in 2020.
Based on region, Europe attained the highest growth in 2021. This is attributed to the growing financial, banking, and insurance sectors across the region. In Germany, the bancassurance channel distributed about 19% in 2021 of life insurance premiums and about 7% of premiums in non-life insurance, which is marginally greater than the previous year’s premiums shares in 2020. Moreover, the multiple key players across the region are also engaging in merger and acquisitions (M&A) activities as well as partnerships to create numerous growth opportunities in the market.
Furthermore, Asia-Pacific region is forecasted to grow at a significant growth rate during the forecast period. This is attributed to the fact that the aging population has a greater need for health insurance and life insurance as well as retirement product plans, and this global demographic shift will positively impact the bancassurance industry. Moreover, increasing economic growth in developing economies is further contributing to the growth of the market.
The report analyzes the profiles of key players operating in the bancassurance market such as American Express Company, ABN AMRO Bank N.V., BNP Paribas S.A, Barclays PLC, Citigroup, INC, HSBC Group, State Bank of India, Scotiabank, Standard Chartered, and Wells Fargo. These players have adopted various strategies to increase their market penetration and strengthen their position in the bancassurance market share.
Market Landscape and Trends
Bancassurance is a new concept in financial services sector means using the bank’s distribution channels to sell insurance products. The philosophy behind Bancassurance is to combine the manufacturing capability sand selling culture of insurance companies with the distribution network and large receptive client base of banks. It is a phenomenon wherein insurance products are offered through the distribution channels of the banking services along with a complete range of banking and investment products and services. Furthermore, bancassurance tries to exploit synergies between both the insurance companies and banks. Bancassurance if implemented properly can be win-win situation for the all the participants’ viz., banks, insurers and the customer. Therefore, these are the major bancassurance market trends.
Top Impacting Factors
Increased Profitability for both the Banks and Insurance Companies
Bancassurance offers profitability for both the bank and the insurance companies as in case of the bank, the insurance company provides extra commission for selling their policies to the bank customers, while for the insurance companies, they save investment in marketing their products as they get a set customer base of the bank. Furthermore, insurance companies do not have to invest in distribution of their policies since the bank does it for them. Therefore, it saves a lot of money for the insurance company. In addition, the bank staff gets monetary benefit for selling the policies to their customers and therefore, the demand for bancassurance is largely growing attributing to this factor. Thus, this is a major driving factor for the bancassurance market growth.
Higher Customer Retention
Since the bank customers are loyal, they take financial advice from the banks and the policies sold by the banks are mostly purchased by the customer as they feel the policy might be helpful for them. Furthermore, the bank has a large customer base and therefore, chances of customer retention increase which is helpful for the insurance company. Moreover, customers show trust towards their banks which is a major factor for which customers agree to purchase the products pitched to them. Therefore, higher customer retention through bancassurance is a major propelling factor for the growth of the bancassurance market.
Sell of Policies Depend Upon the Business of the Bank
The customer footfall in a bank branch depends upon the type of service they get in that branch and many other factors contribute to this fact such as the behavior of the staff towards customers, the location of the branch, services provided by the branch and others. However, all the branches of the banks do not have the same customer footfall which affects the sell of insurance policies of the bancassurance in that branch. Tus, a branch having less customer footfall generates less business for the bancassurance. Moreover, bad relationship between the bancassurance agent and the bank may result into less business as well. Therefore, this is a major factor hampering the growth of the bancassurance market.
It is Difficult for the Banks for Cross Selling of Insurance Products
The bank staff is in immense pressure of providing the banking services to the customers along with selling the policies of the insurance companies to the same customer. Many a time it becomes difficult for the bank staff to cross sell both the products at the same time which may create confusion in the mind of the customer, which may end up receiving bad customer service from the bank. Moreover, the bank staff is already occupied with doing other essential work of the bank and may ignore or give less priority towards selling the policies of the bancassurance. Therefore, difficulty in cross selling of insurance products and services by the bank staff is a major factor limiting the frowth of the market.
Growing Demand for Insurance Policies
There has been a significant increase in the awareness about the importance of insurance policies among the customers. Bancassurance can leverage on this opportunity by offering various types of insurance policies to the customers. Furthermore, banks are partnering with insurance companies to form bancassurance in order to increase their customer satisfaction and with the rising demand for insurance policies, insurance companies are approaching banks to sell their products to the customers. Therefore, with the growing demand for insurance policies among customers, the demand for types of bancassurance services will also increase in the upcoming years. Thus, it will provide major lucrative opportunities for the growth of the bancassurance market industry.
Key Benefits for Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the bancassurance market forecast from 2021 to 2031 to identify the prevailing bancassurance market opportunity.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the bancassurance market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global bancassurance market outlook trends, key players, market segments, application areas, and market growth strategies.
Bancassurance Market Report Highlights
| Aspects | Details |
 Market Size By 2031 | USD 1.8 trillion |
 Growth Rate | CAGR of 7.4% |
 Forecast period | 2021 - 2031 |
 Report Pages | 201 |
 By Insurance Type |
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 By Model Type |
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 By End User |
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 By Region |
|
 Key Market Players | Citigroup, Inc., HSBC Group, BNP Paribas, State Bank of India, Wells Fargo, Mitsubishi UFJ Financial Group, Inc., Standard Chartered, Scotiabank, American Express Company, ABN AMRO Bank N.V. |
Analyst Review
Bancassurance refers to a financial agreement between a bank and an insurance company, wherein the bank earns additional revenue and a profitable sum of money by selling the policies of the insurance firm. It also helps to expand the financial product portfolio of banks, thereby increasing their turnover with little or no capital outlay which further gives a high return on equity.
Furthermore, market players are adopting agreement strategies for enhancing their services in the market and improving customer satisfaction. For instance, on June 2021, SBI General Insurance, one of the leading general insurance companies in India, has signed a corporate agency agreement with IDFC FIRST Bank for distribution of non-life insurance solutions. Under this strategic agreement, SBI General Insurance will offer insurance products such as health, personal accident, home, motor and travel along with the commercial line of insurance products such as property, marine and engineering insurance to the banks customers.
Some of the key players profiled in the report include American Express Company, ABN AMRO Bank N.V., BNP Paribas S.A, Barclays PLC, Citigroup, INC, HSBC Group, State Bank of India, Scotiabank, Standard Chartered and Wells Fargo. These players have adopted various strategies to increase their market penetration and strengthen their position in the bancassurance market.
Bancassurance provides increased profitability for both the banks and the insurance companies as banks receive extra commission on the sale of insurance policies from the insurance companies, whereas insurance companies get a customer base of the bank to sell their policies without having to invest in any marketing of their products. Therefore, this is a major factor driving the bancassurance market growth.
Europe is the largest regional market for bancassurance
The global bancassurance market was valued at $901.46 billion in 2021, and is projected to reach $1,777.47 billion by 2031, growing at a CAGR of 7.4% from 2022 to 2031.
American Express Company, ABN AMRO Bank N.V., BNP Paribas S.A, Barclays PLC, Citigroup, INC, HSBC Group, State Bank of India, Scotiabank, Standard Chartered, and Wells Fargo.
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