What Is Bancassurance?

Bancassurance Explained in Less Than 4 Minutes

Bancassurance is a mutual arrangement between a bank and an insurance company in which the bank sells a line of insurance products to its customer base.
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Bancassurance is a partnership between a bank and an insurance company in which an insurance company sells and distributes its products through the banking network. Banks typically sell insurance products that match their lending activity, such as home insurance when issuing mortgages. This mutual agreement lets banks earn more revenue as insurance companies expand their client bases.

Definition of Bancassurance

Bancassurance is a mutual arrangement between a bank and an insurance company in which the bank sells a line of insurance products to its customer base. Banks can earn additional revenue through income from a larger product portfolio, while insurance companies can expand their client bases with minimal capital expenditure.

  • Alternate name: bank insurance model


Bancassurance, which is prevalent across Europe, gives banks another avenue of profitability with minimal or no capital outlay.

How Bancassurance Works

The bancassurance distribution model was pioneered in France and Spain, but countries in southern Europe, Asia, and Latin America have rapidly adopted it. In the United States, the Glass-Steagall Act of 1933 limited the adoption of bancassurance since banks were barred from doing business with different financial service providers. It was not until the act was repealed in 1999 that bancassurance started gaining traction in the U.S.

Currently, the global bancassurance market is worth $1.191 trillion and is predicted to hit $1.696 trillion by 2026. Some of the largest market players are European banks, including ABN AMRO (Netherlands), BNP Paribas (France), and Credit Agricole Group (France), among others.


Top companies in the bancassurance marketplace within the United States include the American Express Company and Citigroup Inc.

This natural partnership between banks and insurance companies creates a one-stop shop for customers. Banks often require homeowners insurance to protect the home from damages before approving you for a mortgage. They may also require private mortgage insurance if you purchase a home with a down payment less than 20%. This type of coverage protects the lender against the risk that you default on the mortgage. Bancassurance gives banks the opportunity to service these needs (and turn a profit).

Many banks have adopted bancassurance because it makes them less dependent on net interest income, which can be minimal when interest rates are plummeting. On the flip side, insurance providers can record more sales revenue in a wider customer territory without increasing distribution expenses.

In France, bancassurance has evolved into more than a distribution agreement between banks and insurance companies. Banks have created exclusive insurance divisions with insurance licensing capabilities whose capital is partly or fully owned by the bank. The bank takes part in the governance, management, sustainability, and profitability of the subsidiary.

Pros and Cons of Bancassurance

  • One-stop shop for different products

  • Access to solutions in limited or underserved areas 

  • No legal framework

  • Compromised data security

Pros Explained

  • One-stop shop for different products: Bancassurance provides the convenience of accessing both financial and insurance products from a single provider. Consumers can access a host of complementary products, including a savings account and life insurance, or a mortgage and homeowner’s insurance.
  • Access to solutions in limited or underserved areas: This arrangement could benefit those in rural or underserved areas who otherwise may not have access to insurance products.

Cons Explained

  • No legal framework: Bancassurance lacks a legal framework, and this may leave the insurance company at the mercy of the bank that acts as its broker. There’s also the possibility of a conflict of interest between the bank’s financial products and insurance products.
  • Compromised data security: Open access to a bank’s customer database for the purposes of bancassurance could result in a breach of security.

Key Takeaways

  • Bancassurance is the sale and distribution of banking and insurance products through one channel, typically a bank.
  • The bancassurance concept originated in France and has become a successful initiative across Europe, Asia, and Latin America.
  • Bancassurance can provide consumers with a one-stop shop of financial and insurance product options.
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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. IMARC. "Bancassurance Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021-2026." Accessed Nov. 1, 2021.

  2. Federal Reserve History. "Banking Act of 1933 (Glass-Steagall)." Accessed Nov. 1, 2021.

  3. IMARC. "Top Companies in the Bancassurance Industry." Accessed Nov. 1, 2021.

  4. Society of Actuaries. "Bancassurance." Accessed Nov. 1, 2021.

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