The early 2000s marked a significant milestone for bancassurance in Asia Pacific. Following the high-profile launch of a partnership between a global insurer and a regionally headquartered bank, the region was swept up by a tsunami of interest in bancassurance tie-ups seeking to offer customers banking and insurance products under a single financial institution.

Fast forward to today, bancassurance partnerships are the norm rather than the exception, with many insurers willing to fork out huge sums for exclusive access to a bank’s extensive customer base and distribution network. The sobering reality, however, is that not all bancassurance partnerships have performed, or will perform, as anticipated.

In this report, we will distil the observations gleaned from our extensive experience supporting insurers and banks on their bancassurance partnerships in Asia Pacific and beyond to elucidate the key execution and relationship issues on this journey, and provide some recommendations on the way forward.

Throughout our analysis, we will also draw on our findings from a roundtable dialogue conducted with industry leaders from the banking and life insurance sectors, whose inputs have enabled us to hone an even more nuanced understanding of the opportunities and critical success factors of bancassurance partnerships.

Challenge #2: Relationship issues

While performance issues are complex, relationship issues might prove to be even trickier to navigate. Cultures and motivations inevitably differ between organisations – and these differences tend to become more pronounced in an exclusive bancassurance partnership.

Common sources of friction include, for example, the fact that insurers may be more focused on bottom line profitability given their product-centric sales approach, while banks are more focused on fees and commissions given their transaction-based sales approach. At the same time, while insurers may be more interested in seeking access to a captive customer base, banks may prefer to leverage their distribution channels to generate risk-free income – and both sides may find it difficult to appreciate each other’s point-of-view.

To navigate these relationship issues, industry leaders at our roundtable emphasised the importance of setting the right tone at the top. At the working level, teams should also be encouraged to develop a clear understanding of their partner’s comparative advantages and disadvantages, as well as the skills and experience gaps that would need to be filled in order to enhance the partnership’s synergies.