Best bancassurance practices and difficulties in fulfilling it

Abstract

The end of the twentieth century was characterized by integration of the cooperation of banks with insurance companies. The result of the integration are bancassurance products.
The subject requires to be taken due to the fact that the bancassurance market in Poland is growing rapidly, and the banks have difficulties in fulfilling the highest standards by bancassurance sales.
The aim of this publication is to present general principles for introducing and offering bancassurance
products and most common abnormalities in offering and designing of these products.
For the purposes of this publication, under bancassurance product is understood a product that meets the following conditions:
• has the characteristics of an insurance product,
• is sold together with other banking product (usually a loan, it can also be a deposit / saving product),
• bank is an insurer or an intermediary in the distribution of an insurance product or as an intermediary
distributes products through intermediaries with which the bank cooperates.
The purpose of bancassurance products is to provide customers with useful and cost-effective insurance coverage and provide banks financial gain. The most popular forms of bancassurance products include loan insurance.
The first chapter indicates actions to be taken by the bank prior to the introduction of a new bancassurance product, so that the newly offered product is safe for both, the bank and the customer. The second chapter contains a brief description of Best practices developed by representatives of the Polish Chamber of Insurance, Office of Competition and Consumer Protection, the Ministry of Finance and the Office of the Financial Supervision Commission. The chapter includes the most common abnormalities in fulfilling the highest standards of bancassurance sales in practice. The third chapter contains rules for the monitoring of the main processes related to bancassurance products. The article concludes with a brief summary.