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Bancassurance: a world of untapped potential

November 17, 2023

Recent economic uncertainty could mean opportunities for the bancassurance industry. This study reveals increased customer appetite for bank-provided insurance and identifies untapped areas for growth.
InsurTech|The Future of Financial Services

For over two and a half years, uncertainty has had a debilitating effect on our world. And as we head into the coming months and years, the fog shows little sign of lifting. However, with uncertainty comes opportunity for change. And through changes  in bancassurance, the opportunity to prosper for customers, financial institutions and the wider economy is vast.

40% of the European population is worse off than pre-pandemic

Our own continent has been hit particularly hard since 2020, with the ongoing conflict to suffer through on top of global issues like the Covid pandemic. Our employment landscape has been in constant flux. While from food to fuel, gas to electric, our cost of living has skyrocketed. According to a European parliamentary report, 40% of the European population is worse off than prepandemic, and over half is only three months away from financial difficulty. The point is, when people aren’t secure, they can’t plan. And when they can’t plan, they don’t spend or borrow. With government help becoming increasingly limited, people are seeking additional means of security for themselves and their families. And insurance is seeing a surge in popularity off the back of this. For banks in particular, these circumstances present opportunities to help customers, both current and new, to bridge that security gap.

Facts, figures and insights that open new doors

This research unearths invaluable trends, patterns and behaviours in attitudes around insurance – and, crucially, around providers of insurance.

In short, there’s an incredible opportunity for Financial Institutions to plug a vast (and widening) gap in the market, and avoiding complacency is the only way of ensuring banks can step up and seize it.

Before focusing on what the path to a brighter bancassurance future may look like though, let’s start with a reminder of the current lay of the land.

Buying insurance from banks

While overall awareness of insurance’s necessity is high (77% of those asked felt this way), an even more interesting finding was that willingness to purchase insurance from banks is up significantly, too (65%, from just 43% in 2013). A striking statistic, but meaningless if considered in isolation – especially with demand for nonbanking partners also on the rise.

Buying multiple insurance products from the same provider

Another attention-worthy stat is that a huge 89% are showing interest in buying multiple insurance products from the same provider. But, in general, awareness of end-to-end insurance solutions is low. This is almost certainly down to a lack of cutting-edge marketing strategies in the world of insurance. The bancassurance industry, by its own admission, has some work to do in this area.

The standard bancassurance menu

The traditional industry offering is a path well-trodden, covering six main markets. It includes:

Accident and health insurance comprising accident, hospital cash and medical expenses

Personal motor, household and travel insurance the standard, day-to-day protection covers

Personal and identity protection insurance think ATM cash, handbags, mobiles, wallets, card protection and ID protection assistance

Investment-related life insurance both unit-linked and non-unit-linked products and retirement savings

Creditor insurance made up of cover linked to mortgages, consumer finance and credit cards

Unsurprisingly, this is a ‘me-too’ world, with little or no differentiation across the board.

But it’s also the very reason why the opportunity is so large. With a little investment in contemporisation, the bancassurance industry can make huge strides – and our research is clearly signposting the way forward.

Future-proofing the bancassurance offering

Essentially, driving the industry forward involves three key things: a strong, relevant promotional effort, new markets, and new products. But this isn’t a case of prioritising one or picking a couple to focus on. All three need to be singing and dancing if Financial Institutions are to fully capitalise.

The good news is that banks have a whole host of competitive advantages to leverage.

Firstly, our findings indicate that, after insurance companies (93%), it’s now banks who many seek to buy insurance from (65%) – superseding brokers, aggregators, utilities providers, supermarkets, and online retail giants such as Amazon.

Fundamentally, here’s why. Customers have two key desires when it comes to their choice of insurance provider: good general customer service and a smooth claims management process. There are also additional factors, driven by age. For 18-34s, trust in the brand is a big deal. While for those aged 35 or over, price is the big driver. For reasons of scale, heritage and innovation potential, banks are perfectly positioned to deliver all of this.

They have a long legacy of protecting customers’ money, for starters. They have an ongoing, expansive retail presence, along with the ability to segment and target at a highly strategic level. And there’s the perceived sophistication of their digital channels.

The omnichannel age is upon us

These last two points are worthy of particular attention – as this ‘sophistication’ goes above and beyond what most others can do. Conversely, though, this is elite-level digital technology that’s capable of doing more than it currently does.

At a basic level, banks are responding well to the evolution from POS, postal and telephone communications to computers, tablets and mobiles. It’s at a more strategic level, evidently, where bancassurance has the opportunity to make fuller use of its own digital potential. We know that customers today are far more open to multichannel marketing – and omnichannel marketing – than ever before. The ability to use multiple means of communication, enjoying 24/7 support from tech and humans alike, is now an expectation, rather than a bonus. The benefits to the bancassurance industry of wielding seamless product mixes (more on this later), targeting, marketing, distribution and a blend of online, offline and human aftersales, are astronomical.

Rich new seams to mine

Opportunity, however, doesn’t lay solely in end-to-end tech and marketing investment. There are exciting new markets out there, full of untapped potential, too. A clear picture has emerged of four insurance markets that today offer considerable scope for profitability.


WTW Affinity

WTW Affinity is a leading global Affinity InsurTech solutions provider. When we partner with organisations looking to sell insurance alongside their main activities, we design insurance programmes that serve as a natural and credible extension to their existing business, while enhancing long-term customer value.

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