Survey reveals banks missed bancassurance opportunity, with home insurance leading

Sollers, a consulting firm specialising in digital transformation, and Ipsos, a market research company, have recently conducted a survey that highlights how banks are not fully leveraging the potential of bancassurance.

According to their findings, 44% of customers are open to purchasing insurance products through their banks.

By adopting advanced insurance software technology and APIs, banks could significantly enhance their presence in the insurance market.

The survey, which included responses from 3,200 customers across the UK, Germany, France, and Poland, indicates that banks are more likely to be chosen as insurance providers compared to other sources such as travel service providers, car dealerships, or retail outlets. Approval rates for banks range from 37% in the UK to 51% in Poland (see Figure 1).

Specifically, 61% of customers are open to buying home insurance from a bank, and 51% would consider life insurance (see Figure 2). Additionally, notable approval rates exist for motor insurance (47%) and travel insurance (35%). Despite these insights, the banking sector has yet to fully capitalize on this opportunity.

“Insurance can be a very profitable business for banks. But it requires an experienced insurance team on the banking side and the right technology,” said Piotr Pastuszka, Senior Manager at Sollers.

Pastuszka continued: “Insurance is for the banking industry so attractive because it serves as an opportunity for additional customer services and cross-selling.”

According to the survey, bancassurance customers demonstrate the greatest interest in home insurance, which stands out as more prevalent than life, motor, and travel insurance across all markets surveyed.

While home insurance is less popular in Germany compared to France, the UK, and Poland, it still maintains a higher approval rate of 44% compared to the other types of insurance.

In the UK, non-traditional distribution channels are somewhat less favoured relative to other markets, yet home insurance is viewed as the most suitable product for these channels.

Conversely, Polish insurance customers are notably more receptive to alternative distribution methods, with an approval rate of 49%. This rate is 8 to 17 percentage points higher than in the UK, Germany, and France, as highlighted in the survey.

“Banks have started to follow long-term strategies in their insurance business and increasingly sell insurance as a stand-alone product,” added Patryk Nowak, Lead Consultant at Sollers.

“But the financial institutions still have a way to go to fully exploit the potential. There is a strong need in digitising bancassurance. Banks must start to invest in insurance technology to expand their insurance footprint.”

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