DATA GRAPHIC: Close to two thirds maintain captive or joint venture insurers

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The total value of premiums written by captive and joint venture underwriters belonging to the world’s leading retail banking groups is likely to have been more than $330bn in 2012, according to a new research into global bancassurance strategies published by Finaccord.

Based on an investigation into the consumer banking operations of the world’s top 125 retail banking groups across 64 countries, Finaccord’s research established that across these groups, 52 (41.6%) own a captive underwriter (but no joint ventures) in at least one jurisdiction, 13 (10.4%) own at least one joint venture underwriter (but no captives) and 17 (13.6%) operate both captive and joint venture underwriters.

The most prominent bancassurer in terms of the breadth of its geographical presence is BNP Paribas, while by total value of premiums, Crédit Agricole is the world’s largest bancassurance group, reporting total business of $29bn in 2012 (see table).

“When measured by the total value of premiums underwritten by captive and joint venture insurers, four of the 10 largest bancassurance groups in the world originate in France,” says Tobias Schneider, a consultant at Finaccord.

“All but two of the others in the top 10 are European banking groups; the exceptions are Bradesco of Brazil, ranked fourth, which Finaccord understands to have one of the most profitable bancassurance units in the world, and South Korea’s NongHyup Bank, ranked ninth, part of that country’s National Agricultural Co-operative Federation.”

Strategic partnerships

Finaccord’s research also investigated which of the world’s top 125 retail banking groups have established partnerships with external insurance providers that can be considered to be strategic.

Among those researched, 52 (41.6%) have established a strategic partnership with an insurance provider, sometimes in the form of one or more joint ventures and sometimes in the form of a long-term distribution agreement not involving co-ownership. Across the 125 groups, Aviva is the insurance provider with the most partnerships that can be classified as strategic (with six), followed by Allianz, Prudential and Zurich with four each, and by Ageas, AXA, CNP Assurances and Mapfre with three each.

Several of the banking groups researched, including HSBC, ING Group, RBS Group and Santander, have been divesting previously captive insurance operations either wholly or in part for regulatory or strategic reasons.

For example, as a condition of state financial support received by ING Group in previous years, the European Commission has demanded changes to the group’s structure, including separation of its banking and insurance operations and divestment of its international insurance business over the course of the next five years.