Bancassurance-historical perspective, growth and future outlook.

Abstract

The close relationship between banks and insurers is evident. Their relationship has intensified with the blurring of the traditional barriers between these two financial institutions. It has resulted in a transformation of the financial industry. Banks faced with declining profitability seek to maintain their revenue through increasing their fee-based income through insurance. The insurance sector is one of the major areas of diversification. Insurance companies are fearful of losing ground as this is perceived as an encroachment. They are often urged to set up their own distribution systems to avoid the banks appropriating their policyholders.