History of bancassurance

Bancassurance emerged in Europe in the 1970s and 1980s as a result of an initiative launched by local European banks.

The concept first developed in life insurance, then more recently in property-casualty insurance, with the aim of broadening the customer base and making the network more profitable.

The first countries to embark on this adventure were France and Spain.

In France, Crédit Mutuel, recognized as a pioneer of the concept, created its subsidiary dedicated to this operation: Assurances du Crédit Mutuel in 1972.

In 1984, French law (no. 84-46 of 24 January 1984) authorized banks to expand their activities. Banks were henceforth allowed to carry out activities related to their lending operations, namely investment, underwriting, purchase, management, custody and sale of securities and all financial products, including the marketing of life insurance products.

In Spain, bancassurance began in the early 1980s, when the Banco De Bilbao group took over Euroseguros, founded in 1968 as Vasca Aseguradora.

Initially, this takeover was purely financial, as Spanish legislation prohibited banks from selling insurance. This regulatory restriction was lifted in 1991. Agents and brokers, who had previously dominated the distribution of insurance products, saw their market share shrink due to this new activity.

In 1989, the European Union published the “Second Banking Coordination Directive” (89/646/EEC). This directive allowed banks to engage directly in a wide range of financial activities, including securities trading and underwriting and asset management, thus facilitating the development of bancassurance.

Early collaborations between banks and insurance companies were often limited to distribution agreements, with banks acting as intermediaries to sell insurance products. Over time, these partnerships have grown into more integrated models.

In the 1990s, several major banks had acquired insurance companies or set up insurance subsidiaries to strengthen their market position.

In Belgium, a legislative reform was introduced in 1992, which, in keeping with European law, encouraged the development of bancassurance.

As a result, financial groups acquired numerous banks in order to develop their activities. Fortis took control of Caisse Générale d'Epargne et de Retraite (CGER) in 1993 and Générale de Banque in 1999. ING, on its part, acquired Banque Bruxelles Lambert in 1997, BHF-Bank (Germany) in 1999, Banque Slaski (Poland) in 2001 and DiBa Bank (Germany) in 2002.

In the United States, the Glass-Steagall Act of 1933 prohibited financial institutions from associating with companies offering other types of financial services. This law established strict separation between commercial banks and investment banks while prohibiting banks from entering the insurance business.

In 1999, the Gramm-Leach-Bliley Act removed the restrictions, preventing banks, securities firms and insurance companies from merging or operating together. All these institutions can now combine commercial banking, investment banking and insurance activities.