CAPITAL MARKETS PRACTICE – NON-BANK FINANCIAL INSTITUTIONS
Potential Development Impacts
Clearly, a good understanding of these dynamics and Bancassurance—the process of using a Bank’s branch, issues should open the way for many countries to use sales network, and customer relationships to develop Bancassurance as an effective development tool. sales of insurance products—has been an important feature in the development of insurance markets in quite a number of countries. The effect has been World Bank’s Response stronger in life insurance than in non-life insurance, The Non-Bank Financial Institutions (NBFI) Insurance and stronger in some countries than in others. Group is ready to offer technical support and advisory services to help developing countries and emerging However, promoting Bancassurance as a means to markets develop Bancassurance practices and legal stability and growth is not a simple matter. The frameworks. The ultimate aim—to increase the sales of following dynamics of Bancassurance need to be insurance products—is an important feature in the understood before the decisions are made: development of insurance markets in many countries as Which countries find Bancassurance an effective Bancassurance is becoming a key distribution channel in tool? Which countries do not find it helpful? And many insurance markets. why are there differences? The NBFI Insurance Group has written a working paper Which countries choose to intervene with legislative, Bancassurance - A Valuable Tool for Developing regulatory, or fiscal changes, sometimes to help and Insurance in Emerging Markets which provides the sometimes to constrain the use of Bancassurance? potential of Bancassurance to contribute to the growth And why? and stability that both life and non-life insurance Which types of insurance work well in a products can bring to emerging markets. The details of Bancassurance context and which types are less how some approaches work better than others, and how successful? And why? regulation and policyholder protection issues can impact such development, are reviewed, together with a Which situations arise where Bancassurance sales discussion of regulatory policy issues and actually can be unhelpful to the broader social recommendations for best practice. And the paper development? provides a detailed study of the operation of Can Bancassurance effectively support micro- Bancassurance in a major developed market (France) and insurance? Is it the optimal distributor of insurance this is contrasted with a further study in a developing to rural areas? market (Mexico).
Similarly, how to regulate the development of
Bancassurance is an important concept to understand. How to Follow Up Issues include the following: Ensuring the coverage is to a minimum standard and Serap Gonulal on a sound basis Senior Insurance Specialist NBFI, Capital Markets Practice Ensuring the customer has a fair choice World Bank Group Ensuring the bank’s fees are fair and, as regards the soguzgonulal@worldbank.org insurers +1-202-458-1548 Ensuring that the insurers’ security is supported by a Website: community safety net http://worldbank.org/fpd/insurance Ensuring that consumers and their claims are http://worldbank.org/nbfi handled fairly