Finaccord’s report titled Life Bancassurance in Latin America: Protection-Related Life Insurance offers uniquely-detailed insights into the distribution by banks and other lending institutions of risk life, critical illness and income protection insurance in six countries: Argentina, Brazil, Chile, Colombia, Mexico and Peru.

Drawing on the results of a survey of over 300 banking entities, the study verifies that close to half offer at least one of the types of protection-related life insurance researched, giving a total of well over 200 initiatives in the three fields combined. Hence, given that the aggregate market for protection-related life insurance across the eight countries, excluding creditor cover, is worth around USD 16.7 billion, it is clear that banks and other lending institutions can intermediate a significant volume of business in this sector.

In addition to identifying the schemes for distribution of protection-related life insurance through the bancassurance channel, the research also classifies and analyses these according to the operating model used, distinguishing, for example, between captive, joint venture and external underwriters. Furthermore, it also calculates the weighted share of partnerships of the underwriters and other product providers involved, thereby illustrating not only which competitors hold which partnerships but also which competitors hold the most significant distribution deals.

You may be able to use this report plus the PartnerBASE dataset and market data annexe that accompanies it in one or more of the following ways:

- gain access to a source of information that provides a comprehensive overview of the provision of risk life insurance, critical illness insurance and income protection insurance by a majority of significant banking entities in six Latin American countries;

- identify partnership opportunities for protection-related life insurance that may arise either because a banking institution is not currently active or because there is scope for replacing an existing initiative;

- understand which underwriters and other product providers have been successful in establishing distribution relationships with the most important banking entities;

- assess the background to the most significant bancassurance deals, differentiating between those that originate from long-term or strategic objectives and those that are more transient;

- appreciate the magnitude of the opportunity to sell protection-related life insurance through banks and other lending institutions in Argentina, Brazil, Chile, Colombia, Mexico and Peru.

Table Of Contents

Table of Contents 
 
0.0 EXECUTIVE SUMMARY
The total market grew at a nominal compound annual rate of 15.1% between 2008 and 2012
Non-creditor business accounts for over three quarters of the total regional market
Market growth rates vary significantly from country to country
The distribution share of banks in protection-related life insurance exceeds 80% in Brazil
Risk life insurance is quite commonly sold by banking institutions in Latin America
The largest banking institutions in Brazil and Mexico use captive or joint venture underwriters
ACE and BNP Paribas Cardif are active in five of the six bancassurance markets researched
 
1.0 INTRODUCTION
What is this report about?
Distribution partnerships with banks and other lending institutions constitute the focus of this report
Rationale
Close to a half of banking organisations surveyed in Latin America sell risk life insurance
Methodology
Survey of banks and other lending institutions
Market data
Risk life insurance
Critical illness insurance
Income protection insurance
Weighted provider share of partnerships
Operating models
Abbreviations and exchange rates
PartnerBASEâ„¢ and market data annexe
Finaccord
 
2.0 LATIN AMERICA OVERVIEW
Introduction
Market analysis - protection-related life insurance
Premiums for protection-related life insurance grew by 15.1% in nominal terms between 2008 and 2012
In real terms, the Peruvian market displayed the most rapid growth between 2008 and 2012
Non-creditor policies account for more than three quarters of total protection-related life insurance.
Per capita premiums for protection-related life insurance are highest in Chile
Bancassurance analysis
Provision rates and operating models for protection -related life insurance
Banking entities in Argentina were found to offer stand-alone risk life insurance most frequently
Over 50% of all partnerships are organised through a single external underwriter...
...though captive underwriters are preferred in Mexico
On a weighted basis, captive underwriters become a lot more important
Provision rates and operating models for critical illness insurance
The provision rate for stand-alone critical illness insurance is highest in Chile
Over 50% of banks offering the product collaborate with a single external partner...
... although captive providers are again more prominent on a weighted basis
Provision rates and operating models for income protection insurance
In each country market, between three and five banks distribute this product
External underwriters are most visible when partnerships are viewed on an unweighted basis...…
…but use of the captive underwriter operating model is more pronounced in weighted terms
Distribution share of bancassurance for protection-related life insurance
Finaccord’s analysis illustrates the influence of bancassurance on a standardised basis
Bancassurance groups in Latin America
Bancassurance groups with a strong presence in Brazil dominate the market
ACE and BNP Paribas are present in five of the six bancassurance markets under consideration
 
3.0 ARGENTINA
Banks and other lending institutions covered
Economic background
Argentina is the third largest economy in Latin America in terms of GDP
The Argentine economy collapsed in 2011 and fell into a deep recession…
…and is still struggling with the aftermath
The service sector accounts for around 60% of economic output
Persistently high inflation is one of the country's most pressing problems
In the Ease of Doing Business ranking, Argentina's economy is ranked only 124th in the world
Introduction to the banking sector
In terms of its number of retail customers, Banco de la Nación leads the market…
Government-owned banks are an important part of the Argentine banking sector…
…which displays a fairly high concentration
Argentina's persistently high inflation has a marked effect on the lending market
The market has seen some important merger and acquisition activity in recent years
Introduction to bancassurance
Banks constitute an important distribution category for life insurance in Argentina
A number of banks have set up captive insurance underwriters…
…and CNP Assurances and Zurich have both entered into bancassurance joint ventures in recent years.
In Argentina bancassurance is characterised by relatively 'light touch' regulation
Insurance market size and growth
Protection-related life insurance premiums increased strongly between 2008 and 2012
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Two thirds of Argentina's banking institutions promote some form of risk life insurance...
... with Nación Seguros ranked first by weighted share of partnerships
A number of captive and joint venture underwriters are active in this field
A large number of underwriters can be identified
18 banking organisations have no visible arrangement in place for risk life insurance
Critical illness insurance
Only a limited number of institutions surveyed are distributors of critical illness insurance…
…with underwriters affiliated with banking organisations dominating the market…
…albeit MetLife has secured a prominent position
Income protection insurance
Income protection insurance has yet to establish itself as a core bancassurance product
Performance of key bancassurance underwriters
The combined market share of key bancassurers increased between 2007 and 2011
 
4.0 BRAZIL
Banks and other lending institutions covered
Economic background
Brazil's economy has performed very strongly in recent years...
…with substantial natural resources boosting growth
The service sector accounts for over two thirds of Brazilian GDP
In the World Bank's Ease of Doing Business Index, Brazil is ranked only 126th in the world
Introduction to the banking sector
In terms of its total number of retail customers Bradesco leads the market
Government-owned Banco do Brasil is ranked second by number of customers
As a percentage of GDP, lending to the private sector has almost doubled since 2003...
... with consumer credit having increased as a consequence of several factors
Retail sector card issuers account for the majority of credit cards in circulation in Brazil
The banking sector is fairly concentrated with the ten largest banks accounting for over 80% of assets...
... partly as a result of mergers and acquisitions involving Banco Itaú and Bradesco
Introduction to bancassurance
Around 30% of Bradesco's profits are attributable to its insurance operations
MAPFRE and Zurich have both entered into bancassurance joint ventures in recent years...
... with other insurers having established important strategic partnerships
The bancassurance channel is characterised by relatively 'light touch' regulation in Brazil
Insurance market size and growth
Protection-related life insurance grew by 11.9% per annum in real terms between 2008 and 2012...
... albeit a substantial proportion of this is probably due to creditor insurance
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Captive and joint venture underwriters dominate distribution deals for risk life policies...
... with Bradesco Seguros and Itaú Seguros ranked first by weighted share of partnerships
Aliança do Brasil was configured as a joint venture by Banco do Brasil and MAPFRE in 2010
CNP's Caixa Seguradora joint venture directly serves around 4.8 million clients in Brazil
11 banking organisations have established external partnerships in this field
Critical illness insurance
Relatively few banking institutions in Brazil sell stand-alone critical illness insurance
MetLife benefits from its strategic partnership with Citibank
Income protection insurance
Income protection insurance is rarely marketed by banking organisations in Brazil
Performance of key bancassurance underwriters
Key bancassurance underwriters have grown rapidly in the market for protection-related life insurance
 
5.0 CHILE
Banks and other lending institutions covered
Economic background
Chile benefits from a diverse and export-driven economy…
…that has displayed strong GDP growth in recent years
Chile was well prepared for the onset of the financial crisis
The financial sector accounts for around 16% of GDP
In the Index of Economic Freedom, Chile's economy is ranked seventh in the world
Introduction to the banking sector
In terms of number of retail customers, state-owned BancoEstado leads the market…
…albeit Banco Santander is ranked first by banking assets
Co-operative banks play a prominent role in the Chilean banking system…
…which also features a number of credit unions and retail sector card issuers
Several banking institutions are owned wholly or partly by foreign entities
Some merger and acquisition activity has taken place in recent years
Introduction to bancassurance
Bancassurance in Chile is well-developed, in particular for non-life insurance products…
…with captives and joint ventures among the largest underwriters in terms of premiums
Banking organisations are not allowed to sell investment-related life insurance products
Insurance market size and growth
Protection-related life insurance decreased very slightly in real terms between 2008 and 2012...
... although it remains a much larger market than that for investment-related life insurance
Distribution share of banks
Banks play an important role in the distribution of protection-related life insurance
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Over half of Chile's banking institutions promote some form of risk life insurance
MetLife and BancoEstado signed a significant partnership agreement in 2004
Zurich and Santander entered into a 25-year strategic distribution arrangement in 2011
Banchile Seguros benefits from both captive and external partnerships
Cardif maintains distribution ties for risk life insurance with six entities
Critical illness insurance
Around one third of banking institutions surveyed are distributors of critical illness insurance
Cardif has partnerships in place with five banking organisations for this type of policy
Three captive underwriters are active in this market
Income protection insurance
Income protection insurance is rarely sold by banks and the few that do all use the same supplier
Performance of key bancassurance underwriters
The combined market share of key underwriters increased slightly between 2007 and 2011
 
6.0 COLOMBIA
Banks and other lending institutions covered
Economic background
Colombia's economy has performed strongly in recent years…
…and follows a strong free-market orientation
Despite significant improvements, the country still faces a number of social problems
In the Ease of Doing Business ranking, Colombia's economy is ranked 45th in the world
Introduction to the banking sector
In terms of its number of retail customers, Bancolombia leads the market…
…but Banco Davivienda is the largest player in consumer finance…
…and Grupo Aval controls four retail banking networks
Colombia's mortgage market remains relatively small
The market has witnessed some important merger and acquisition activity in recent years
Introduction to bancassurance
Banking organisations are estimated to account for around 15% of life insurance premiums
A number of financial groups own both a bank and an insurance company..
…albeit most affiliated underwriters have adopted a multi-channel distribution strategy
Some insurance products cannot be sold through the banking channel
Insurance market size and growth
Protection-related life insurance premiums increased strongly between 2008 and 2012
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Around 44% of Colombia's banking institutions promote some form of risk life insurance...
... with Sura ranked first by weighted share of partnerships
Solidaria has a total of three distribution partnerships in this field
Critical illness insurance
One quarter of institutions surveyed are distributors of critical illness insurance
Alfa benefits from its strategic partnership with Grupo Aval
Liberty has ties with three banking entities
Income protection insurance
Income protection insurance has yet to establish itself as a core bancassurance product
Performance of key bancassurance underwriters
The combined market share of key bancassurers decreased between 2008 and 2012
 
7.0 MEXICO
Banks and other lending institutions covered
Economic background
Mexico is the second-largest economy in Latin America…
…and has enjoyed reasonably strong economic performance in recent years
The service sector accounts for over 70% of GDP
In spite of economic progress, the country faces several major social problems
In the World Bank's Ease of Doing Business Index, Mexico is ranked 53th in the world
Introduction to the banking sector
Banco Azteca leads the market in terms of its outright number of retail customers...
... but not when measured by its share of banking assets
The banking sector is dominated by several foreign-owned entities
A number of banks targeting lower-income customers are affiliated to retailing groups
Due to the influence of INFONAVIT, banks account for a limited share of mortgage lending
Introduction to bancassurance
Mexican bancassurance is well-developed, especially for life insurance products
Subsidiaries of the country's large financial groups are prominent in the bancassurance market…
… particularly in the life insurance segment
Insurance market size and growth
Protection-related life insurance grew at a compound nominal annual rate of 10% between 2008 and 2012...
... and constitutes a more valuable market in Mexico than investment-related insurance
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Around a half of Mexico's banking institutions promote some form of risk life insurance
Seguros Azteca leads the market in terms of weighted partnership share…
…albeit second-ranked Seguros Banamex is considerably stronger when measured by premiums
Non-captive underwriters active in this market are ACE, Atlas, Argos, AXA, Cardif, MetLife and RSA
Critical illness insurance
Critical illness insurance is less commonly sold through the banking channel…
...although those partnerships in place are very similar to those for risk life insurance
Income protection insurance
Income protection insurance is rarely marketed by banks in Mexico
Performance of key bancassurance underwriters
Two of the five largest life insurance providers in Mexico are subsidiaries of banks
 
8.0 PERU
Banks and other lending institutions covered
Economic background
Peru has seen great economic and social development over the last decade…
…with GDP growth averaging 6.5% between 2002 and 2011
Economic success is not shared equally across the country…
In the Ease of Doing Business ranking, Peru's economy is ranked 43rd in the world
Introduction to the banking sector
In terms of its number of retail customers, Banco de Credito leads the market
Government-owned institutions are not especially prominent
Savings banks and credit unions are an important feature of the Peruvian market…
…and the prospects of growth in microfinance have triggered a number of mergers and acquisitions
Introduction to bancassurance
Creditor insurance accounts for more than 14% of the total life insurance market…
A number of important insurance companies belong to broader financial groups…
…and all of them have adopted a multi-channel distribution strategy
Credit unions perform particularly well in the distribution of microinsurance
Insurance market size and growth
Protection-related life insurance premiums increased strongly between 2008 and 2012
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Risk life insurance is commonly offered by Peru's larger banking organisations
... with Pacífico ranked first by weighted share of partnerships
Rimac has established a total of eight distribution partnerships in this area
Third-ranked Sura entered the Peruvian market through an acquisition in 2012
A significant number of banking organisations do not yet sell any kind of risk life insurance
Critical illness insurance
Over 20% of banking organisations surveyed are distributors of critical illness insurance…
…with Pacífico leading the market once again in terms of its share of partnerships
Income protection insurance
Only two providers are visible in this field
Performance of key bancassurance underwriters
Key bancassurers account for over two thirds of the total life insurance market
 
LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY
An average of 77.4% of total premiums can be attributed to non-creditor protection-related life policies
In Brazil around 80% of protection-related life insurance premiums are secured through the bancassurance channel
In weighted terms, the operating models used by banks to sell risk life insurance vary by country
Presence of international groups in bancassurance markets for protection-related life insurance in Latin America, 2012
1.0 INTRODUCTION
Banks and other lending institutions contacted by Finaccord, segmented by country and type
2.0 LATIN AMERICA OVERVIEW
Gross written premiums for protection-related life insurance in Latin America, 2008-2012
Provision rates for risk life insurance through bancassurance in Latin America, 2012
Operating models (unweighted) used for risk life insurance in Latin America, 2012
Operating models (unweighted) used for risk life insurance in Latin America, 2012 (data)
Operating models (weighted) used for risk life insurance in Latin America, 2012
Operating models (weighted) used risk life insurance in Latin America, 2012 (data)
Provision rates for critical illness insurance through bancassurance in Latin America, 2012
Operating models (unweighted) used for critical illness insurance in Latin America, 2012
Operating models (unweighted) used for critical illness insurance in Latin America, 2012 (data)
Operating models (weighted) used for critical illness insurance in Latin America, 2012
Operating models (weighted) used for critical illness insurance in Latin America, 2012 (data)
Provision rates for income protection insurance through bancassurance in Latin America, 2012
Operating models (unweighted) used for income protection insurance in Latin America, 2012
Operating models (unweighted) used for income protection insurance in Latin America, 2012 (data)
Operating models (weighted) used for income protection insurance in Latin America, 2012
Operating models (weighted) used for income protection insurance in Latin America, 2012 (data)
Distribution share of bancassurance for protection-related life insurance in Latin America, 2012
Weighted group share of bancassurance partnerships for protection-related life insurance, reweighted by country bancassurance market size, Latin America, 2012
Presence of international groups in bancassurance markets for protection-related life insurance in Latin America, 2012
3.0 ARGENTINA
Key economic indicators for Argentina, 2012
Gross written premiums for protection-related life insurance in Argentina, 2008 to 2012
Gross written premiums for protection-related life insurance in Argentina, 2008 to 2012 (data)
Bancassurance provision of risk life insurance in Argentina, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Argentina, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Argentina, 2012: provision rate, operating models and weighted provider share of partnerships
Market share in total life insurance of key bancassurance underwriters in Argentina, 2008 to 2012
4.0 BRAZIL
Key economic indicators for Brazil, 2012
Gross written premiums for protection-related life insurance in Brazil, 2008 to 2012
Gross written premiums for protection-related life insurance in Brazil, 2008 to 2012 (data)
Bancassurance provision of risk life insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships
Market share in protection-related life insurance of key bancassurance underwriters in Brazil, 2007 to 2011
5.0 CHILE
Key economic indicators for Chile, 2012
Gross written premiums for protection-related life insurance in Chile, 2008 to 2012
Gross written premiums for protection-related life insurance in Chile, 2008 to 2012 (data)
Bancassurance provision of risk life insurance in Chile, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Chile, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Chile, 2012: provision rate, operating models and weighted provider share of partnerships
Market share in total life insurance of key bancassurance underwriters in Chile, 2007 to 2011
6.0 COLOMBIA
Key economic indicators for Colombia, 2012
Gross written premiums for protection-related life insurance in Colombia, 2008 to 2012
Gross written premiums for protection-related life insurance in Colombia, 2008 to 2012 (data)
Bancassurance provision of risk life insurance in Colombia, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Colombia, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Colombia, 2012: provision rate, operating models and weighted provider share of partnerships
Market share in total life insurance of key bancassurance underwriters in Colombia, 2008 to 2012
7.0 MEXICO
Key economic indicators for Mexico, 2012
Gross written premiums for protection-related life insurance in Mexico, 2008 to 2012
Gross written premiums for protection-related life insurance in Mexico, 2008 to 2012 (data)
Bancassurance provision of risk life insurance in Mexico, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Mexico, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Mexico, 2012: provision rate, operating models and weighted provider share of partnerships
Market share in total life insurance of key bancassurance underwriters in Mexico, 2007 to 2011
8.0 PERU
Key economic indicators for Peru, 2012
Gross written premiums for protection-related life insurance in Peru, 2008 to 2012
Gross written premiums for protection-related life insurance in Peru, 2008 to 2012 (data)
Bancassurance provision of risk life insurance in Peru, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Peru, 2012: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Peru, 2012: provision rate, operating models and weighted provider share of partnerships
Market share in total life insurance of key bancassurance underwriters in Peru, 2008 to 2012

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