Bancassurance


 
 
Concept Explanation
 

Bancassurance

Bancassurance is a French term referring to the selling of insurance through a bank's established distribution channels. Banc assurance is the selling of insurance and banking products through the same channel, most commonly through bank branches. Selling insurance means distribution of insurance and other financial products through Banks.

Advantages of Bancassurance

The following factors have mainly led to success of banc assurance.

  • Pressure on bank's profit margins. Banc assurance offers another area of profitability to banks with little or no capital outlay. A small capital outlay in turn means a high return on equity.
  • A desire to provide one-stop customer service Today, convenience is a major issue in managing a person's day-to-day activities. A bank, which is able to market insurance products, has a competitive edge over its competitor. It can provide complete financial planning services to its customers under one roof.
  • Bank aims to increase percentage of non-interest fee income.
  • Cost effective use of premises.
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