The bancassurance market

According to an estimate by US research firm Market Research and Consulting Services (IMARC), global bancassurance premium volume is valued at 1 506.71 billion USD in 2024.

With an average annual growth rate of 5.5%, this market is poised to reach 2 439.50 billion USD by 2033.

Asia-Pacific currently dominates this segment, with an underwriting share of over 45.9% in 2024.

The success of bancassurance varies considerably from country to country. It is directly correlated with demographics, economic development, the regulatory environment, insurance and banking distribution models, and consumer behavior and culture.

Today, this business has become commonplace for many banks and insurance companies, standing as the main distribution channel for life insurance products in many countries, especially those with extensive banking networks.

Bancassurance in Europe

Europe features some of the densest bancassurance networks in the world, driven by highly reputable leaders.

The success of this business is underpinned by a favorable regulatory framework and a strong relationship between customers and banks.

Bancassurance is particularly well developed in Spain, Portugal, France and Italy.

France

Practically born in France, bancassurance had undergone gradual development from the 1970s-1980s, as many local banks were quick to diversify their activities by moving into the insurance sector.

They began by focusing on life products, before extending their offer to the property-casualty sector. Their success is largely accounted for by their extensive distribution networks and their ability to analyze customer data.

Legislation has played a key role in the recent development of bancassurance. The Hamon law, enacted in 2014, gave policyholders the option of cancelling their motor, home and health contracts at any time after one year's underwriting; cancellation free of charge and without justification.

This provision has enabled banks to win back customers from traditional insurers, by offering them facilities and products better tailored to their needs.

Italy

In Italy, bancassurance really took off in 1987. It then expanded rapidly, thanks in particular to the 1990 Amato Law, which authorized banks to buy shares in insurance companies.

Between 1995 and 1998, tax measures favorable to life insurance products had also contributed to this expansion.

The presence of a vast, well-distributed banking network and Italians' confidence in their bankers also reinforced this dynamic.

Thanks to all these factors, and to the success of the Italian model, the bancassurance market share in the country had risen from 8% in 1992 to 41% in 2023.

Spain

Banking groups such as Banco Santander and BBVA (Banco Bilbao Vizcaya Argentaria) have long made bancassurance a key component of their business model.

In 2023, 29 insurers out of a total of 176 have partnered with banks. Through this distribution channel, they have generated 38% of market premiums, 47% of net profit, 53% of technical reserves and 47.9% of assets.

The Spanish bancassurance market is largely dominated by life insurance, which accounts for 72% of the business.

The Spanish bancassurance market

In millions USD

Source: www.funcas.es

Bancassurance in United States

In the United States, the bancassurance market remains relatively underdeveloped, mainly due to regulatory limitations stemming from the Glass-Steagall Act of 1933.

However, the country managed to make up some of the lost ground following the reform introduced in 1999 by the Gramm-Leach-Bliley Act, which authorized mergers between banks and insurance companies.

Since then, banks have been able to offer insurance products directly to their customers, either through their own subsidiaries or through strategic partnerships with insurers.

The acquisition of Travelers Insurance Company by Citigroup in 1998 marked a major turning point in the development of bancassurance in the United States.

According to Research and Markets, the U.S. bancassurance market was valued at 48.52 billion USD in 2024. With the rise of digital platforms offering insurance products as a complement to traditional banking services, the development prospects for this distribution channel remain promising.

Bancassurance in Asia

Relatively new compared to Europe, bancassurance in Asia is currently recording the fastest growth rate in the world.

Population density, rising incomes and growing insurance awareness are behind this development.

Several countries in the region, such as Malaysia, Hong Kong, Indonesia and Singapore, have been active in this niche for several years.

Other nations such as South Korea, China, India and Japan have more recently entered this market, supported by economic liberalization and government initiatives.

In India, at the end of March 2023, bancassurance accounted for 5.93% of non-life premiums and 17.44% of life premiums.

In China, premiums generated by the bancassurance channel rose by 14.4% in 2023. This rate is set to increase further in 2024, following the recent cancellation of a restriction limiting the number of insurers authorized to cooperate with a bank to three.

Bancassurance in Africa

Bancassurance in Africa is an emerging market with great potential, mainly due to low insurance penetration and a rapidly expanding banking infrastructure.

Across the continent, this model is developing rapidly, with three pilot countries: South Africa, Morocco and Mauritius.

South Africa

The contry is the continent's leading insurance market, with a premium volume of 43.354 billion USD in 2023, accounting for a market share of 68.2% of the African total.

Thanks to the introduction of innovative digital solutions and partnerships with fintechs and insurtechs, bancassurance has become the country's main insurance distribution channel over the years.

South Africa showcases a sophisticated and mature regulatory environment that consolidates financial culture and consumer protection.

What's more, the country features a highly diversified population, a booming emerging market and a dense banking network with affordable insurance rates (sometimes 30% lower than those charged by insurers).

The products most frequently underwritten by South African bancassurance operators include funeral, credit, hospitalization, personal accident and disability covers.

Four banks dominate the niche:

• Capitec Bank, which has a market share of over 36% in funeral risks,
• Discovery Bank, which has high commitments in the mortgage market with over 3 million customers thanks to its Vitality Rewards program,
• Standard Bank, one of Africa's largest financial groups, with a strong presence in bancassurance thanks to its partnerships with insurers Allianz and Liberty Life,
• Absa Bank Limited (Absa), the South African subsidiary of the Absa Group, develops robust bancassurance solutions, particularly in and motor insurance. The group has subsidiaries in Kenya, Botswana, Ghana, Tanzania, Uganda, Mauritius, Mozambique, Zambia and the Seychelles.

Mauritius

The bancassurance market is developing in a dynamic environment, thanks to a solid, mature and fully integrated financial sector.

Boosted by the rise in mortgage lending, bancassurance is now distributed through most bank branches, which underwrite life, travel, health, motor and credit insurance policies.

The country's main bank, the State Bank of Mauritius, is associated with several insurers: State Insurance Company of Mauritius (Sicom), Swan, Jubilee Insurance, Mauritius Union Assurance and New India Assurance.

Mauritius Commercial Bank also has a strong presence in the bancassurance segment, thanks to its collaboration with local insurers.

Morocco

1989 marked a turning point for the Moroccan insurance industry, when, Wafa Bank entered the local market, taking over Société Nouvelle d'Assurance (SNA), which was renamed Wafa Assurance. A few years later, Marocaine Vie joined the Société Générale Group in 2001.

These two bank-insurance mergers marked the beginning of bancassurance operations in Morocco. Gradually, the model was established, based on combined expertise in the banking and insurance sectors.

Law no. 103-12 of 2014 governing credit institutions and similar bodies is the reference provision that regulates insurance-related banking activities, setting out the terms under which banks can operate in this market.

From a regulatory standpoint, bancassurance is subject to strict supervision by the Supervisory Authority of Insurance and Social Welfare (ACAPS). This authority ensures that commercial practices comply with established consumer protection standards and guarantee healthy competition between market players.

La bancassurance dans les pays du Golfe

The rapid urbanization of the Gulf States, with the influx of expatriates (more than 80% of the population of the United Arab Emirates and Qatar) and gigantic infrastructure projects, have stimulated demand for insurance products, particularly life and home insurance.

To supplement their offerings, banks, with their extensive networks and diversified customer base, have naturally integrated insurance into their products and services.

Bancassurance is the fastest-growing distribution channel throughout the region, thanks in particular to the introduction of technological platforms.

United Arab Emirates

In the United Arab Emirates, bancassurance accounts for almost 40% of insurance sales.

As of 2018, the UAE Insurance Authority has been regulating this business with the publication of a circular designed for the marketing of insurance contracts by banks.

Five conditions are required to carry out bancassurance activity, namely:

• have Central Bank approval,
• appoint a manager dedicated to bancassurance activity,
• compulsory staff training,
• joint signing of contracts by bankers and insurers,
• compliance with industry regulations.

Saudi Arabia

Saudi Arabia is the Gulf Cooperation Council (GCC) country where the bancassurance business is most heavily regulated.

The sale of insurance products by banks is governed by a 2011 legislation pertaining to insurance intermediaries.

The document imposes numerous restrictions on this activity, such as obtaining authorization from the Saudi central bank (SAMA), staff qualifications and the separation of banking and insurance activities.

This strict framework has had a negative impact on the growth of the bancassurance market. The additional financial burdens imposed on banks by the 2011 regulations have slowed its development.

Qatar

In Qatar, the bancassurance business is supervised by two regulators:

• The Qatar Central Bank (QCB), which supervises the financial sector in accordance with Law No. 13 of 2012 on financial institutions.
• The Qatar Financial Centre Regulatory Authority (QFCRA), the independent regulator of the Qatar Financial Centre (QFC), created by Law no. 7 of 2005.

On 1 April 2019, the QCB implemented a new decree (N 7 of 2019) governing intermediaries and services peripheral to insurance and setting out the terms and conditions for granting approvals for various market players, including bancassurers.

The adoption of artificial intelligence (AI) by the Qatari banking sector in recent years is creating an environment conducive to the evolution of bancassurance.