Perhaps you have got a call from a banker asking you to consider taking up an insurance cover on offer by your bank even as you are aware that it only provides banking services.
While transacting, you have seen posters hanging on the walls advertising insurance products on offer by the bank.
Most commercial banks are already selling insurance products to customers willing to buy insurance products besides their banking products.
Some potential customers do get confused when they are approached by their bankers to buy insurance products within the banking hall.
Do they offer insurance products or are mere agents, some people ask.
With the evolving rate of financial needs of customers, many commercial banks have become a one-stop shop where both potential and existing customers can access and purchase related financial services, including insurance products on offer while undertaking their routine banking transactions.
Relative to banking services which has recorded high absorption rate, the penetration of other financial services, especially insurance has been dismal.
Subsequently, insurance companies in arrangement with commercial banks have rolled out a revolutionary concept: bancassurance.
Through this approach, banks form strategic alliances with insurance companies as distribution channels to cross-sell insurance products to their customers.
Through bancassurance concept, insurance companies have gotten the opportunity to leverage on the wide branch network and strong customer base of commercial banks, majority of whom are conversant with having financial plans to enhance the penetration of insurance coverage.
Conversely, to exploit their strong customer base, banks have created counters within their halls where they cross-sell insurance products besides other banking products to their customers who are devoid of such essential plans or are willing to set up their own insurance plans.
Occasionally, the bank would explore their customer database for potential prospects and approach them to buy insurance.
Alternatively, while undertaking their routine banking transactions, a potential customer would be contacted by the bank staff and taken through the benefits of insurance cover as part of personal financial plan.
Under this arrangement, whilst many customers have been able to purchase insurance covers, many still ponder whether it is preferable to buy insurance covers from the bank under the bancassurance concept than from an insurance broker or an independent agent.
The question: Is bancassurance the right channel for one to purchase a cover?