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Bancassurance: Challenges and Opportunities in Republic of Serbia

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... Kad su u pitanju životna osiguranja, mora se reći da se, generalno, ređe zaključuju ugovori koji se odnose na ovu vrstu osiguranja. Razlog tome je nizak životni standard i nepoverenje u dugoročniju štednju (Marinović Matović, 2019;73). Da bi se više razvilo bankoosiguranje u Srbiji, potrebno je da se ispune mnoge pretpostavke. ...
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In the case when banks appearing as insurance agents, we are talking about bankinsurance. In the last four decades, bankinsurance has emerged as a way of distribution of insurance, primarily in the field of life, but also in the field of non-life insurance. The development of bankinsurance is different from country to country, so we cannot say that, always, the financial system of a country is always correlated with the efficiency of bank insurance. In this area, it is very important to determine the relationship between the bank and the insurer, and from that will depend on which bankinsurance model will be applied. This relationship can be based on a contract of agency, then a joint venture agreement, as well as integrated approaches of the bank and the insurer in the area of bankinsurance. Bankinsurance models may be different, depending not only on the relationship between the bank and the insurer, but also on the insurance products offered to bank clients, the involvement of the insurance company's experts in bankinsurance, as well as the needs of the bank' s clients or the insured themselves. The paper outlines the factors that contribute to the development and efficiency of bank insurance. They are as follows: - facilitating a liberal regulatory regime that will help clearly define the relationship between banks and insurance companies; - the possibility for insurers to have access to a database of bank clients; - contractual regulation of the possibility of commissions from insurance selling banks, which is their additional source of income; - positive fiscal treatment of long-term savings products; - making insurance products standardized and simpler; - alternative insurance distribution channels must not adversely affect bank insurance; and - clearly defining of the operational integration of banks and insurers. The author proposes three models of bankinsurance that could be applied on the territories of countries in the region. These models are: - a model of defining bankinsurance through a bank and insurer contract, which would include intermediation and agency in insurance; - a model of corporate agency, in which a bank acts as an agent when selling insurance products; and - model of integrated approach to the bankinsurance market, which involves the participation of only those banks with more solid credit rating and better infrastructure. Also, the paper focuses on the general issues of bankinsurance, and to the regulation of this area in the legislation of the Republic of Serbia.
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The paper focuses on the traditional and alternative mechanisms for insurance risk transfer that are available to global as well as to domestic insurance companies. The findings suggest that traditional insurance risk transfer solutions available to insurance industry nowadays will be predominant in the foreseeable future but the increasing role of alternative solutions is to be expected as the complementary rather than supplementary solution to traditional transfer. Additionally, findings suggest that it is reasonable to expect that future development of risk transfer solutions in Serbia will follow the path that has been passed by global insurance industry.
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Financial law and supervision are to a large extent divided into three separate branches banking, securities and insurance reflecting the three traditional sectors of the financial industry. The end of the 20th century has however been characterized by a blurring of distinctions between the traditional sectors and the services and products they offer This contribution examines and evaluates recent changes in supervisory structure and in investor protection legislation intended to remedy the problems associated with this blurring of sectors. The shortcomings which are brought to light allow to draw conclusions with respect to two more fundamental and highly interdependent questions: (i) what is the adequate level and model of financial supervision in the EU, and (ii) what is the adequate level and model of financial legislation in the EU.
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The "life insurance" product is in constant competition with alternative forms of investment to attract the savings of private households. The study gives an overview of the theoretical concepts that have been elaborated to explain the demand for life insurance and to provide empirical evidence of various factors that determine life insurance demand. The macroeconometric studies available show that a combination of demographic, macroeconomic and socio-psychological factors is capable of significantly explaining life insurance demand both in an international cross-section and also over time. We also discuss various methodological approaches under-lying the aforesaid empirical analyses. It should be noted that the econometric methods used in the literature are not always state-of-the-art in terms of modern research methodology. We highlight the need for further research in this field.
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Develops principles for banks that want to evaluate the distribution of life insurance as well as non-life insurance products and identifies key factors for profitability. Analyses the costs of training personnel, the costs of computers and communication, the fixed and variable sales costs, and the costs of administration including customer service. These costs have to be covered by direct benefits in terms of commissions and indirect benefits in terms of more faithful bank customers. Then estimates the profitability of the distribution through a branch network. Develops a model to calculate the “break-even” sales volume. Identifies five key factors: the number of branches; the number of specialists per branch; the number of customers to the bank; the cross-selling ratio; and the reduction over time in costs of selling and administration. Gives two examples from the banking sector.
Insurance Distribution Channels in Serbia
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