Insurance comes along with current account - Serbia fertile soil for banking insurance development

Some 14.314 salesmen, who, according to the National Bank of Serbia, acquired a license for operating in insurance brokerage, can testify how hard it is to sell an insurance policy.

Since every new sales channel is a very important to any insurance company, Sberbank Europe and Generali group holding company have recently signed the contract on strategic partnership in insurance field comprising six countries from the Central and East Europe.

As announced from Generali group, they will together with the Sberbank Europe focus on “providing solutions and services to their clients, thanks to presence in the Central and East Europe, extensive experience in banking insurance and knowledge of local situation”.

Products which will be offered to clients in Serbia, Slovenia, Hungary, Slovakia and the Czech Republic, will be adapted to each country separately, with a special accent on life insurance. Credit insurance will also be very important in these six countries.

Insurance products sales in banks started in the world in early nineties when the banking insurance concept appeared. It is in fact sales of insurance companies’ products through the bank branch offices network. Cooperation proved to be very successful and banks have been `constantly increasing their share in total insurance sales.

When it comes to Generali group, the holding says banking insurance in Central and East Europe has an important role in their sales network.

- Some 10% of life insurance contracts in the region come from banking insurance distribution network. At the world market, in the next five years, an increase of banking insurance in all big economies, including Central and East Europe, is expected. Banking insurance is one of the sectors with the fastest growth during the last couple of years where an annual increase rate totals almost 6% – it was stated in the Generali’s announcement.

The data should not be surprising since including insurance services in the product range, banks provide wider range of services for clients while insurance companies get expanded distribution network through banking branch offices.

On eof the leading banks at domestic market, Banca Intesa, became in 2007 an authorized distributor in insurance operations. As they say for our portal, citizens have the opportunity to sign policies of life and non-life insurance i.e. to provide total insurance, to insure residential facilities, to sign the international travel insurance policy as well as life risk and savings life insurance.

At this moment, the bank cooperates with insurance companies Delta Generali osiguranje and DDOR Novi Sad but it does not exclude the option of expanding the list of associates in the future, representatives of Intesa said for eKapija.

Clients can buy insurance in Sberbanka which are related to credit products, as well as insurance which are sold separately from credit products so clients can insure from unemployment risk, sick leave, they can buy property insurance, life insurance, total insurance, automobile liability insurance.

Market potential

This kind of insurance sales is not on an increase trend only with us. Namely, banks, as the life insurance sales channel have an important role in many EU countries. For instance, in Spain, banks sell 73% of contracted life insurance policies and 60% in France and Italy. Also, Portugal is also mentioned as an example of highly developed banking insurance.

Marijana Vasilesku

Lack of barriers between banking and insurance is a result of deregulation and financial services market liberalization as well as appearance of giants among financial companies which can provide wider service range. Banking insurance at the same time is becoming the main distribution system component, first of all life insurance in developing countries, especially on the Central and East Europe where there is an increase in mortgage and consumable loans.

Marijana Vasilesku, member of the Executive Boar at Sberbank Serbia agrees this kind of insurance has a perspective in Serbia.

- Banking insurance as a channel of insurance product sales has a big potential, having in mind that insurance is a category which is essential for both banking products consumers and banks. A client finishes everything at one place: applies for a loan, opens current account, applies for a credit card and with every banking product he or she has an option to insure him or herself and family members as well as usage of bank products – Vasilesku thinks.

Experts estimate that particularly this sales channel can contribute a lot to both banks and insurance companies, especially with the opening of new credit lines of banks and implementation of tax incentives by the government. Apart from that, the advantage of banking insurance market expansion should be seen by clients through financial services of “all in one” type. This way, they would save time, get lower fees and premium.

Jelena Djelic