Bancassurance: Definition, History, Rules, Benefits, and Examples

Ever heard of the term bancassurance? Here's the explanation!

Bancassurance is a form of cooperation between banks and insurance companies that produce insurance products. This method provides convenience by implementing an automatic debit system for accounts.

Some of you may still be unfamiliar with the term bancassurance. In fact, this feature has many benefits and advantages, you know! If you are interested, we will see the discussion in the next article.

What is Bancassurance?

Bancassurance is a cooperation program between banks and insurance companies. Banks sell insurance company insurance products directly to their customers, then both parties share the commission profits from selling these insurance products. Financially, this program benefits banks by selling additional products to their customers, as well as insurance companies, which attract additional consumers directly from bank customers leon bet france.

Bancassurance history

The concept of bancassurance was first discovered in Europe. Before expanding in Europe in the early 1990s, bancassurance transactions were first registered in Belgium. After that, the term bancassurance began to be used in France in 1980.

Bancassurance in Europe is tasked with generating significant profits at the start of its use. Offering insurance products through banks has proven to be effective and efficient for customers.

Unlike in Europe, the use of bancassurance was originally not allowed in the United States. This is due to regulations that prohibit banks from cooperating with other financial service providers, including insurance companies. However, after the regulation was repealed, many bancassurance programs were launched.

Bancassurance Rules

The supply and sale of insurance products is regulated in Regulation no. 23/POJK.05/2015 concerning Financial Services (POJK). Based on POJK Bancassurance, insurance product marketing can only be carried out with prior approval from OJK. With POJK Bancassurance, insurance sales are legally controlled.

Bancassurance benefits

With the development of bancassurance in Indonesia itself, this program has begun to be promoted in several banks that cooperate with large insurance companies. Of course, with the many benefits from various parties, it is not impossible if there is a tendency for investment programs to be interrelated.

a. Benefits of Bancassurance for Banks

The following are some of the benefits that banks get in the banking and insurance partnership program.

1. Strengthen products and increase market share

With these features, the bank has developed a stand-alone product to increase the strength of the resulting banking product. Thus, all insurance products offered by Bancassurance can attract market interest and be used to convince customers to buy the products offered.

2. Increase revenue

This cooperation is certainly one way to increase bank revenues. If many customers buy the insurance products offered, the bank will also receive a larger commission from the insurance company. Therefore a bank is not only a provider of banking services, but also a direct insurance broker.

3. Improve efficiency

Banks are supported in terms of staff and infrastructure by insurance companies when marketing their products. Of course, a wide network and many branches make cooperation more efficient. Insurance companies also use underwriters to market their products so that banks can get more employees, but at a small cost.

4. Increased customer loyalty

With this insurance option, customers become more active in money circulation, for example by paying monthly insurance premiums directly from their active balance. With this feature, customer funds remain filled and sufficient to pay insurance premiums every month and create a more harmonious relationship between the customer and the bank. In contrast to customers who passively wait for interest and have no dependents to pay premiums every month.

b. Bancassurance Benefits for Insurance Companies

Following are some of the benefits that insurance companies get in the bancassurance partnership program.

1. Increase sales and increase market share

Insurance companies benefit from bank customers who already have their own market, so opportunities to increase sales and expand market share are very likely. Even though the policies sold through this partnership are relatively low, insurance companies can encourage customers to increase the value of their policies by relying on the bank's trust in managing their asset balances.

2. Improve product quality

This program certainly makes insurance companies improve the quality of their products. Integrated functions at banks and ease of payment with an organized system have given birth to insurance companies with quality products that suit the needs of bank customers.

The existence of a network of supporting offices and a customer database system makes it easier for insurance companies to do business. Cooperation with banks in paying commissions can also avoid indirect deposits into company accounts through intermediaries who are vulnerable to data processing.

3. Use of customer database

Insurance companies clearly benefit from customer databases for marketing purposes. Valid customer information and data can enable insurance companies to find effective ways to advertise and market products more specifically.

c. Bancassurance Benefits for Customers

The following are some of the benefits customers get when they take advantage of this bank insurance program.

1. Then trade

There is no doubt how easy it is for bank customers to buy insurance products from this program. Purchases can be made directly for two needs at once according to the one stop shop principle, where payments do not have to be made directly to the bank or insurance agent.

2. Interest in insurance is increasing

Many customers do not understand the importance of investing in insurance. Even if you are interested in insurance, there are many things that you must prepare before coming to an insurance company to buy insurance products.

However, through this collaboration, customers can immediately get special insurance savings from an active balance or an automatic debit function to pay monthly installments. Because of this convenience, because the convenience is provided in one system, the insurance interests are higher.

Examples of Bancassurance Products

PRULink Syariah Care

For future welfare, you can take advantage of PRULink Syariah Care from Prudential. With this product you get full and life disability insurance for registered participants. In addition, this product also has cash value and insurance benefits that can be claimed.

PRUCapital Protection

Use PRUCapital Protection to get 10 years of protection with a single premium payment. Some of the features offered by this service include money transfers, choosing the type of mutual fund, withdrawing funds and paying at any time.

PREVINAlink Account Assurance

To protect your family, PREVINAlink Assurance Account can be the right choice of insurance for you. Because you can enjoy product features which include adding additional insurance and distributing prizes regularly according to applicable regulations.

Sharia Mortgage Reducing Term Assurance

For those aged between 21 to 24 years, this Prudential Syariah-based insurance option is the right insurance choice. One of the benefits of this policy is the protection period for membership and the benefits of receiving insurance premiums according to applicable regulations.

That's the explanation regarding bancassurance that DailySocial.id can share. We hope that you will understand more about what bancassurance is and what its benefits are in depth.