Digital bancassurance cooperations on the advance

High-volume distribution channel – bancassurance, i.e. the combination of banking and insurance, has existed since the 1970s. The primary objective of bancassurance partnerships between banks and insurance companies is to exploit cross-selling potential. Although bancassurance has so far been limited to the offline sale of insurance policies in bank branches, it already has a worldwide premium volume of over half a trillion euros. If the abundance of data, the frequency of interaction and the convenience of online and mobile banking are now also exploited via PSD2-compliant interfaces and meaningful integrations, it can be assumed that the potential for digital bancassurance solutions is much greater.

Insurtechs as enablers

The need to open up new sources of income, changing customer requirements and increasing pressure to digitalise – there are enough reasons for banks and insurance companies to become active in the digital bancassurance sector. According to a study by the management consultancy Sopra Steria, one in three banks wants to focus more on the bancassurance business again. However, the development of own bancassurance platforms is often very time and cost intensive. Many established banks and insurance companies therefore rely on cooperation with Insurtechs or Fintechs for the technical implementation, which can often implement insurance solutions in a more agile, customer-centric and cost-effective manner.

Status quo in autumn 2020

In the DACH region there has been an increasing number of digital bancassurance cooperations between tech companies and established banks and insurance companies since 2017, currently, at least 37 cooperations are spread across 13 providers. In the current Digital Bancassurance Overview from Friendsurance we have considered Insurtech, Fintech and other companies that cooperate with banks and offer online insurance solutions together. In addition, the infographics also include cooperations with non-banks such as insurance companies or insurtechs, as far as bank data is used within the cooperation.

Intelligent demand analyses

Bank data is used – subject to the consent of the customer – for example in the context of digital account analyses. Artificial intelligence from account transactions can be used to transfer information about existing insurance contracts directly into a digital insurance overview. And important life events are also recognized, such as the birth of a child when new child benefit payments are received. Such events have a major impact on the customer’s life and may make it necessary to adjust the insurance cover. With the help of the new information, insurance companies can develop starting points for customer interactions and make offers tailored to individual needs, which have significantly higher sales opportunities than impersonal offers based on the watering can principle.

Doubling by 2025

Digital bancassurance is a win-win-win solution for all parties involved: banks sensibly round off the classic banking offer, insurance companies benefit from the everyday relevance in banking as well as the smartness of data-driven insights, and customers get more convenience. Since 2017, an average of ten new partnerships in the digital bancassurance sector have been announced each year.

DIGITAL BANCASSURANCE COOPERATIONS ON THE ADVANCE

Against this backdrop we expect the number of digital bancassurance cooperations to at least double in the next five years. This development will be boosted by PSD2. According to reports from Euroactiv, the European Commission is currently planning further steps towards Open Finance, which could further accelerate the development.

Good opportunities for mix models

While the first digital bancassurance cooperations were launched with the so-called tipster model, many cooperations now provide for direct integration into the online world of banks and insurance companies – with active tech support from third-party providers. Both tailored bancassurance solutions and white-label models are offered. Larger banks and insurance companies in particular rely on individual solutions in order to differentiate themselves from the competition. Whitelabel models are more widespread in the DACH markets, enabling fast and cost-effective integration.

In addition, platform providers such as Friendsurance offer the possibility of combining modules of a white label solution with tailor-made partial solutions. We see a growing demand in the market, especially for this type of mix models but also for the other bancassurance solutions, and will certainly have to expand our infographics soon.

Autor
Tim Kunde ist Mitgründer und Geschäftsführer von Friendsurance (www.friendsurancebusiness.com). Tim begann seine Karriere als Strategieberater bei der Boston Consulting Group und war an unterschiedlichsten Projekten beteiligt – von Trockensuppen über Elektronikmikroskope bis hin zu Haftpflichtversicherungen. Danach lernte er bei Rocket... mehr