Bancassurance is emerging a new trend in the financial industry in Nigeria, a development that many industry observers are tipping to boost financial inclusion in the country.
Bancassurance is a relationship between a bank and an insurance company that is aimed at offering insurance products or insurance benefits to the bank’s customers. In such partnership, bank staff and tellers become the point of sale and point of contact for the customer. Bank staff are advised and supported by the insurance company through wholesale product information, marketing campaigns and sales training. The bank and the insurance company share the commission. Insurance policies are processed and administered by the insurance company.
According to the experts interviewed by this medium, there is a unanimous view that banks and insurance firms can leverage the initiative to access the asset and customer base of both industries, to provide banking and insurance services, as customers would be able to access both services from one point.
In Nigeria’s index case of the emerging development, Access Bank has sealed a pact with Coronation Insurance to drive an innovative, efficient, and dynamic ‘bancassurance’ system.
Speaking on this development, the managing director of Access Bank, Herbert Wigwe, at a webinar that had the theme ‘Managing Risks That Keep CEOs Up At Night’ described the bancassurance development as extremely significant to the ecosystem.
Wigwe said that Coronation Insurance is top within the various categories, with customers having the best claim insurance, hence the Access Bank partnership.
He highlighted the fact that Coronation Insurance is among the three most capitalised insurance organisations in Nigeria, and the institution has thrived over the past decade.
Wigwe emphasised the importance of risk management and governance in the business operations of Insurance companies. According to him, several insurance companies in the past have been slow to meet the various claims made by their customers. He believed Coronation Insurance will experience total transformation with the partnership.
On his part, Chairman of Coronation Insurance Plc Mutiu Sunmonu, said the ‘bancassurance’ partnership would expand the service delivery with Access Bank.
Addressing what the bank assurance partnership would mean to individuals and corporate customers of Access Bank, Sunmonu said he believed the partnership between Access Bank and Coronation Insurance represented a milestone for the Nigerian Insurance Industry through the coming together of both organizations, new standards of quality, and service delivery will be established within the industry.
Bancassurance has been one of the most significant changes in the financial services sector over the past few years on the global scene.
Most developments in bancassurance up to the mid-1990s took place in Europe. However, banks and insurance companies in other parts of the world, e.g. the USA, Canada, Asia and many countries in Africa have developed bancassurance operations
In Nigeria, especially during the post universal banking era, banks were constantly looking for ways to supplement their core earnings. Bancassurance, the provision of insurance services excluding risk underwriting by banks, is one way.
Banks also see this as a sure step in the financial markets where one institution serves all the financial needs of its customers. This naturally was a positive development for insurers as they see bancassurance as a strategic distribution channel that will increase both their premium volume as well as insurance penetration in Nigeria.
Currently, managements of insurance companies and banks are in talks to form partnerships and are set to announce products of bancassurance soon.