Analyses Of Bancassurance Alliance In China

In 1982, to respond to competitions and enlarge market, CNP Assurances and Saving Bank of France formed a sales alliance. CNP Assurances designed and developed insurance products while Saving Bank of France sold insurance products through its banking branches. This was the first example of alliance and cooperation between banks and insurance companies. Because it has fully taken advantages and resources of banks and insurance companies, this alliance and cooperation mode has been popular gradually in France and in the scope of the whole world, and eventually has developed to bancassurance. Since 1999, a wave of cooperation among banks and insurance companies has appeared in the finance industry of China. As a new business and a new operation mode, bancassurance has received more and more attention in the insurance industry of China. Bancassurance has been taken as one of the important management strategies in today's insurance industry. However, as a new operation mode, most domestic researches and documents about bancassurance so far are limited to discussions of its macro-importance. There has not been much work on the exploration of the theoretical basis. Nor there have been any work on operational analyses to bancassurance practices. Therefore, the bancassurance practices lack both theoretical basis and directions and cases of practical operations. This paper attempts to incorporate knowledge of management with knowledge of finance and insurance, and applies Strategy Alliance theory including strategic gap, complementary effect, coordinate effect and alliance risk to researches of bancassurance alliance. This paper first selects Taiping Life Insurance, Ltd. as the study case and elucidates itsbancassurance operations in practices. Then it analyzes the operational characteristics and alliance properties of bancassurance in our country. Based on that, it explores and discusses on advantages of bancassurance alliance over single life insurance systems. It further analyzes the problems in bancassurance industry of our country from the angle of alliance risk and based on bancassurace practices. It proposes that banks and insurance companies in our country should further strengthen alliance and cooperation, explore the operation modes of bancassurance alliance, completely share resources and advantages, and pay more attention to the design and practices of the details of alliance and cooperation such as organizational structures, credit system, communication methods, commission design and measures of training and promotions. Insurance companies and banks should also broaden scope of cooperation and explore levels of cooperation to assure the successful practices of bancassurance alliance.