Term of the day: Bancassurance

Bancassurance is one of the insurance distribution models where insurance companies partners with banks to sell policies, both life and non-life. This arrangement benefits both the bank and the insurance company, as the bank earns a commission from the insurance company while the insurance firm gains from the market presence and distribution network of the bank. The bank acts as a mediator by helping an insurance firm reach its target customers. Given that the insurance penetration is low in the country, insurers have been able to capitalise on the bancassurance distribution model.