A Study On The Development Of Bancassurance In China

At a time when the trend is toward globalization of financial markets, the financial innovation of Bancassurance in China retains a strong emphasis on the domestic banking and insurance market. Based on financial practice and theories, the article studies the concept, reason, history, products, and functions of Bancassurance, then compare different development model of Bancassurance, and last presents strategic suggestions on how to develop Bancassurance in China.Bancassurance means: " The provision of a complete range of banking, investment and insurance products and services by the bank and its associates. " Originated in Europe in 1980s' , Bancassurance presents a win-win solution for banks, insurers and more fee-based incomes; for insurers, it means new distribution channel and scale economies; for clients, it means one-stop financial services.The main factors promoted the alignment of banks and insurers in China were attributed to the same financial characteristics lie in banking and insurance business and fierce competition in the domestic financial market. Bancassurance emerged in China in 1995. by the year 2000 many domestic banks and insurers have signed cooperation agreements to begin providing Bancassurance services, which covered business such as insurance sales through banks, contractual deposits, joint-names credit cards, insurance-backed financing, funds clearings, clients'information sharing, etc. Banks and insurers have begun to establish mutual benefit relationship; however, due to the strict separated-operation policy in domestic financial market, banks and insurers can not totally share their benefits. That's explained why Bancassurance still develops at a relatively low level until now, which was called "cross-marketing under separated-operation". Problems such as lack of effective stimulation methods, short of insurance products and professionals, became the obstacles of further development of Bancassurance in China at present time.Based on the current situation of domestic financial market, the article brings forward solutions of developing Bancassurace under policy of separated-operation, demanding efforts of strategic support, new-product-R&D and IT-upgraded by both banks and insurers. With the development of Bancassurance in China, a more compact cooperation between bank and insurer emerged under the same share holding corporation, by which banks tend to establish closer relationship with insurers. It is foreseeable that Bancassurance will develop more deeply and quickly by this means, accumulating necessary experience and creating suitable financial environments for combined-operation to come true. With the growth of China economy, deepening of financial system reform, development of domestic financial market, we believe separated-operation policy will shift gradually to make it possible for the full scale development of Bancassurance in China.