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The Actuary The magazine of the Institute & Faculty of Actuaries

Bancassurance in Asia

Bancassurance penetration is expected to increase tangibly in Asia over the next five years, potentially accounting for 13% of life insurance premiums and 6% of non-life insurance premiums. This is the conclusion of a Swiss Re sigma study which also notes that around one-third of these premiums represent new business opportunities rather than the substitution of existing channels.

Life and non-life insurance products are primarily distributed by career insurance agents in Asia, while bancassurance – the distribution of insurance products by banks – remains relatively underdeveloped except in certain markets. However, major drivers are emerging that will add momentum to the development of bancassurance in Asia. These emerging drivers include:

  • the squeeze on Asian banks’ profit margins;
  • broad-based financial deregulation throughout the region;
  • balance sheet pressure of Asian insurers;u foreign insurers acting as a catalyst to development;
  • increasing sophistication of Asian consumers.