Bancassurance or AllFinanz, is a relationship between a bank and an insurance company, aimed at offering insurance products or insurance benefits to the bank's customers. In this society, bank staff and cashiers become the point of sale and point of contact of the customer. The bank's staff is advised and backed by the insurance company through information on wholesale products, marketing campaigns and sales training. The bank and the insurance company share the commission. Insurance policies are processed and administered by the insurance company.
This partnership agreement can be profitable for both companies. Banks can earn additional income by selling insurance products, while insurance companies can expand their customer base without having to expand their sales forces or pay commissions to insurance agents or brokers. Warranty control has proven to be an effective distribution channel in a number of countries in Europe, Latin America, Asia and Australia. BIM differs from the classic or traditional insurance (TIM) model in that TIM insurance companies typically have larger insurance sales teams and generally work with brokers and external agents.
An additional approach, the hybrid insurance model (HIM), is a mix between BIM and TIM. HIM insurance companies may have a sales force, may use brokers and agents and may have a partnership with a bank. BIM is extremely popular in European countries such as Spain, France and Austria. The use of the term was taken as banks and insurance companies merged and banks sought to provide insurance, especially in markets that have recently been liberalized. It is a controversial idea, and many feel it gives banks too much control over the financial industry or creates too much competition with existing insurers.
In some countries, bank insurance is still widely banned, but recently it was legalized in countries such as when the Glass-Steagall Act was repealed after passage. But revenues have been modest and stable in recent years, and most insurance sales in US banks are for mortgage insurance, life insurance, or property insurance related to loans. But China recently allowed banks to buy insurance companies and vice versa, stimulating the bancassurance product, and some of the leading global insurers in China have seen the bancassurance product greatly increase sales to individuals across multiple product lines.
Privatbancassurance is a heritage management process initiated by Lombard International Assurance and is now used globally. The concept combines private banking and investment management services with the sophisticated use of life assurance as a financial planning framework to achieve tax and security advantages for wealthy investors and their families. Banks are the agent of insurance companies to sell them more and more. Bancaseguros is an efficient distribution channel with greater productivity and lower costs than the traditional distribution channel.