Bancassurance

Definition

Bancassurance is the distribution of insurance products through a bank, either under a partnership between a bank and an insurer or through an insurance subsidiary owned by the bank. Customers are offered credit life, funeral cover, life and savings policies and sometimes motor or household insurance at the point where they open an account, take a loan or use the banking app. The model relies on volume, simple products and the bank's existing relationship with the customer. For a broker, bancassurance is a structural competitor: many clients hold a bank-sold policy they never compared, often because it was bundled with a loan. It is also a source of business, because bank-sold cover tends to be generic and is frequently unsuitable once the client's situation changes.

What you need to know

In South Africa, the major banks sell funeral, credit life and short-term cover through branches and apps, and the Policyholder Protection Rules and credit life regulations under the National Credit Act give consumers the right to substitute a credit life policy of their choice, which brokers can use to win that business. In Kenya and Nigeria, bancassurance is licensed and regulated by the IRA and NAICOM respectively, and the banks' reach into mobile banking makes them a formidable distributor for simple cover. In the UK, banks retreated from most general insurance advice after the payment protection insurance scandal, so the competitive overlap with brokers is smaller and concentrated in protection and home cover.

The broker's answer is service: being reachable, explaining the cover, comparing, and staying present after the sale. WhatsApp is where that presence lives for most African clients. A brokerage that identifies clients with a financed vehicle or a home loan, offers a review of the attached cover at the right moment and follows the substitution through to the end recovers policies the bank will not fight for. In ORIS, segments built on policy type and engagement score feed a cover-review campaign, and replies land in the shared inbox where the team can follow up. See the sales and prospecting hub and our use cases.

Concrete example

A Nairobi brokerage imports its client list and flags forty clients with vehicle finance and the bank's credit life cover. A WhatsApp campaign offers a free review; fourteen clients reply, and the brokerage replaces nine policies with cover that includes retrenchment benefits the bank product did not offer, keeping the premium roughly level.