Hype, Hope, & Harsh Realities in U.S. Bancassurance

by Craig Weber, April 22, 2004

Abstract

Boston, MA, USA April 22, 2004

Reports Published by Celent

Sales of personal lines have not yet duplicated the success seen in annuities. Will continued investment in the channel pay off?

Bancassurance has enormous potential to affect sales of personal lines insurance products in the life, health, and property casualty segments. But so far that potential has failed to bloom in the U.S., despite years of effort by many banks and carriers.

"Jamming traditional insurance products and processes into the bank environment simply does not work,"

says senior analyst Craig Weber, author of Celent's latest report, . "Players on both sides need to realize that tapping into the under-served middle market through banks requires good product design, evangelical wholesaling, and technology that guides inexperienced salespeople through the process from end to end."

Weber notes that despite slow progress for many products, carriers remain optimistic. Sixty-seven percent of bank insurance program managers polled as part of a carrier panel said that bancassurance has met expectations either "somewhat" or "completely." And 84 percent expect major growth of the channel over the next two to three years. (See Figure 1, above.)

The report outlines the bancassurance market by product and defines three broad sales models in use today. It also describes an integrated approach to products, processes, and technology that carriers should use to maximize their return on time and money invested in the channel. Use of Web-based tools and teleunderwriting are noted as particularly promising approaches to address the clear need for simplified new business processing and reduced cycle times.

A is available online.

of Celent Communications' Property/Casualty Insurance and Life/Health Insurance research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

 

Boston, MA, USA April 22 2004

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 4
OVERVIEW OF CURRENT ACTIVITY 5
  The Bancassurance Market 5
  Major Players 6
  Cautious Optimism? 7
SEGMENTING THE MARKET 12
ADDRESSING THE CHALLENGES 15
SEGMENTING THE MARKET 18
  Keep IT "Quiet" 18
  Going Low-Tech? 20
  Hitting on all Cylinders 21
CONCLUSIONS 23
  Differentiation Strategies 23
OBJECTIVITY & METHODOLOGY 25

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