Kenya joins Uganda, which has also enacted laws to streamline the operations of bancassurance to drive penetration of insurance. I&M Bancassurance offers both General and Life insurance. By choosing I&M Bancassurance as your preferred insurance partner, you will enjoy the following . Banking institutions and insurance companies have found banc assurance to be an attractive and profitable complement to their existing activities. The Kenyan.
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By definition, bancassurance is simply the offering of insurance products by banks, and as per banking regulations, banks can only act bancassurannce agents of insurance companies and not underwriters or providers of insurance. Initially, traditional brokers and agents were not comfortable with the idea of having to share their space with banks.
Bancassurance Not the End of Insurance Agencies – Kenya
However, brokers seemed to be more for the idea than agents believing that the entry of banks into the insurance sector will increase retail outlets and raise the penetration of insurance products countrywide. Bancaszurance agents on the other hand were not for it, as to them bancassurance represented a loss in placements and commissions. It does seem these initial fears were justified as current kenyz reveal a disruptive shift in the insurance landscape since the entry of bancassurance.
According to the Insurance Regulatory Authority, the insurance sector in Kenya has, in the last 5 years, witnessed an increase in dropout of agents and a considerable bancassuranc in new agent registrations. Inthere were new registered agents down menya 1, new agents registered in Over 1, agents dropped out of the industry in up from agents who dropped out in Bancassurance…the new opportunity; Growth, Differentiation and Disruption. While other factors including financial constraints, pressure to meet targets and low commissions, might have also contributed to the declining numbers, the main threat being alluded to by many agents is bancassurance.
Bancassurance Not the End of Insurance Agencies
Agents also see bancassurance as the main reason why insurers are reviewing commissions and customers are getting a raw deal, with the banks not giving them a choice on which policy to buy and where to do it. The Insurance Regulatory Authority IRA has had to step in following numerous complaints from agents and are coming up with guidelines to help regulate bancassurance business.
The draft guidelines, though still in the pipeline, come with stricter rules for the banks with such clauses as: All prospects shall be allowed to decide out of their own volition, which insurance product they wish to buy and from which insurer. If one considers this low penetration, then it is prudent to say that there is still a lot of ground to be covered and development of alternative distribution channels such as bancassurance catering to the untapped market segments must be encouraged rather than vilified.
Technology as a Driver for Special Risk Bancassurance. In many countries around the world, India being a great example, the distribution of insurance by bancassuurance using their branch network has proven to be a very effective channel of increasing insurance penetration.
While bancassurance might initially have been seen to be taking away business from traditional intermediaries, in the long term it has actually expanded the market and created enough business for resilient intermediaries. And even if bancassurance ends up with a commanding market share, the portion for the traditional intermediaries will still be considerably larger compared to the cumulative business they previously managed. Moreover, traditional intermediaries still have a pivotal role to play especially when it comes to servicing complex insurance products.
Banks have limited insurance business experience and are mainly able to handle straightforward products that are simple to explain and service.
Bancassurance the future for banks, insurance firms – Manjang
There is still banncassurance room in the market for the professional intermediary. Consequently, it makes ij sense to put aside the current rivalry and focus on harnessing the collective experience, strategic creativity and innovation of insurers, banks, brokers and agents towards solving our persistent penetration challenge. Operating model — the bank must have clarity on the model they will function within and what success looks like in that context.
Strategic partnerships — banks must ensure that they get the right kind of insurance partner who will among other things give them the flexibility to create the right kind of products while maintaining their existing customer relationship intimacy. Partner with intermediaries to bancassuranfe into their expertise in servicing complex insurance product tapping into the agency distribution channels a sub-agent portfolio is critical for banks to ensure both their insurance and banking products reach a wider market beyond their current customer base.
Your email address will not be published. Please enter an answer in digits: Bancassurance…the new opportunity; Growth, Differentiation and Disruption While other factors including financial constraints, pressure to meet targets and low commissions, might have also contributed to the declining numbers, the main threat being alluded to by many agents is bancassurance.
Bancassurance the future for banks, insurance firms – Manjang – Capital Business
Technology as a Driver for Kebya Risk Bancassurance In many countries around the world, India being a great example, the distribution of insurance by banks using their branch network has proven to be a very effective channel of increasing insurance penetration. What should a bank focus on in order to succeed in bancassurance. In my opinion the three key areas that I believe banks need to focus on are: Operating model — the bank must have clarity on the model they will function within and what success looks like in that context 2.
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