Bancassurance Development Pattern Research

Bancassurance originated in Europe that has been acquiring huge success since the 70's of 20 century. The wide cooperation in China between bank business & insurance business began from the year 2000. As a result, insurance revenues increase rapidly and bancassurance gets to be one kind of important insurance sales channels which include individual business and group business else. One hand, bank industry confronts severe challenge with the change of economy environment. Bancassurance not only can help to maintain & find potential resources but also can improve competition ability by additional income taken by new developed middle business and more complete finance service. To insurance industry, it enlarges customer base and sales channels, also saves costs. Moreover, to clients, buying insurance from bank means higher credit level and all-sided finance management program. Just based on "Tri-Win" mentioned above, bancassurance developed so quickly.The insurance product with the characters of savings, dividends is the main production in current business. The bank and the insurance company sign an agent contract before they begin to carry out bancassurance business jointly, and this cooperation pattern behave typically in present bacassurance market. This pattern has achieved success during the first 3 years. With the market economical environment changing, this pattern proves unfit for the new next development stage of bancassurance business. The cooperation between the bank and the insurance industries in China stays at primary stage at this time being. Simplicity product, lacking of bank's sales motivation, mis-guilding clients, such kind of issues emerged steadily. The real reason is the cooperation just based on their agent contract and the bank can't share any benefit with the insurance company except for service charge though the bank owns resource. So the bank would select the insurance company who pays more fees as a partner. The cooperation relationship became unstable. This cooperate pattern corresponded to our country's finance background and laws at that time, and it results in many problems in the recent bancassurance market. This articlestudies China bancassurance development pattern through analyzing bancassurance current situation & existing problems and referring to overseas bank industry experience. Foreign counterparts underwent three phases including patterns of agent contract, strategic partner and stock-shared in order. Their experiences draw a conclusion that a successful bancassurance business must be executed with capital ties. Only with stock-shared relationship, banks will concentrate on not only earning agent service charges but also sharing the future huge profit from bancassurance with insurance companies. That banks regard this business as their own routine work, it leads to banks devotes more energy and resources into insurance productions research and sales. They would formulate policies and enhance skills to improve this work. At the same time, they fix some insurance companies as their reliable partner due to capital ties. This pattern help solve the existing problems mentioned above. By analyzing present global economic developing trend, the writer believes bank, security and insurance industries will not operate separately forever in China. With the measures of merge, joint stock, etc., they set foot in each other's business sooner or later. Based on these, stock-shared cooperation pattern is the practicable way to keep bacassurance business moving on. Meanwhile this article states the writer's pondering on how to improve the bank & insurance industry and enhance supervision.