Spanish Consumers Happy to Buy Life Cover From Their Banks

GlobalData has a new report out, looking at Life insurance marketing in Spain;

Bancassurance is the leading distribution channel in the Spanish insurance industry and is expected to account for 39.5% of the gross written premiums (GWP) in 2022 as an increasing number of insurers are partnering with banks, says GlobalData. The leading data and analytics company notes that high levels of bank penetration, economies of scale and the advantage of cross-selling insurance products to their existing client base will continue to provide a competitive edge to Spain’s bancassurance channel.

Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: “Despite losing market share in the life insurance and pension segment, the Bancassurance channel remains the leading distribution channel of the Spanish insurance market, supported by growth in the general insurance business.”

The insurance sector is a highly profitable business for banks, with more than 50% of a banks’ profits in 2020 coming from the insurance sector. GlobalData found that of the 195 insurers operating in Spain, 34 are associated with major banks and these insurers registered higher profits in 2020 when compared to insurers that did not have any bancassurance business.

Sahoo continues: “Bancassurance is popular in Spain for purchasing life insurance, particularly for investment-related life insurance products which serve as an alternative to bank deposits. This channel has started to gain market share in the general insurance segment as well.”

The bancassurance business has been supported by cross-selling and bundling insurance products such as home mortgage insurance, risk life insurance, loan amortization insurance and fire insurance. Unemployment insurance covering mortgage payments for 12 months have also supported its growth.

Examples of bancassurance partnerships include Bankinter and Liberty’s partnership in February 2022 to set up a new bancassurance company under the name Bankinter Liberty Hogar y Auto (which is pending for regulatory authorization), the agreement between Mapfre and the Catalan savings bank in December 2021, and an extension of the bancassurance agreement between Caser and Crèdit Andorrà in November 2021.

Sahoo concludes: “Banks that enter into bancassurance agreements will further broaden their distribution network and support the growth of the bancassurance channel in Spain over the coming years.”