what is bancassurance 
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 understanding bancassurancebancassurance arrangements are common in europe where the practice has a long history european banks such as cr dit agricole france abn amro netherlands bnp paribas france and ing netherlands dominate the global bancassurance market but the picture varies widely from country to country a 2013 report found that while bancassurance accounted for 83 6 of life insurance sales in italy 66 2 in spain 64 2 in france and 62 6 in austria its market share was lower in eastern europe and nonexistent in the united kingdom and ireland 1the united states has been slower than many nations to embrace the concept in part that s because the question of whether banks in the u s should be allowed to sell insurance was a matter of contentious debate for many years among the issues unfair competition for insurance agents possible risks to the banking sector and the potential for banks to pressure customers into buying insurance in order to qualify for loans advocates meanwhile maintained that both banks and insurance companies would profit from the arrangement that it would also be a convenience for consumers and that the added competition might lead to lower insurance prices the bank holding company act of 1956 effectively prohibited many large national banks from selling insurance products however whether a bank could sell insurance depended largely on the type of bank and which agency or agencies regulated it as the u s general accounting office noted in a 1990 report by the late 1980s many states allowed state chartered banks to sell most types of insurance and in towns with populations less than 6 000 bank holding companies national banks and some state banks can sell all types of insurance 2in 1999 the federal gramm leach bliley act eliminated most of the remaining restrictions on u s banks selling insurance products while continuing to allow the states to regulate other aspects of insurance 3bancassurance industry growththe bancassurance market is growing worldwide particularly for life insurance and especially in the asia pacific region the research and consulting firm imarc group says the global bancassurance market reached a value of 1 268 trillion in 2021 imarc expects the market to continue to grow at a compound annual growth rate cagr of 5 9 and attain a value of 1 802 trillion by 2027 a major factor driving the trend a growing geriatric population with greater need for health and life insurance as well as retirement plans 4the advantages and disadvantages of bancassurancefrom a consumer point of view bancassurance offers both advantages and disadvantages on the plus side buying insurance at the bank is convenient that s especially true in small towns where insurance agents may be scarce although less so now that insurance is widely available online that convenience may also encourage more americans who need life insurance to buy some on the negative side the ease of buying at the bank may discourage consumers from shopping around and getting a competitive price on their insurance there is also some question as to how qualified bank employees are to advise customers on their insurance needs compared with insurance agents and brokers who specialize in the field for banks that become involved in bancassurance there appears to be little downside except the possible risk to their reputation if the insurance products their employees sell prove inadequate or unsuitable for the consumer 