Bancassurance has been tipped as one of the fastest growing distribution channels of insurance in the GCC over the next two years, as a recent report estimates the insurance industry across the GCC will reach $37.5 billion by 2017.

Alpen Capital’s GCC Insurance Industry report said that the regional insurance sector will expand at an annual compound growth rate of 18.7 per cent between 2012-2017, while economic development, population expansion, and an improved regulatory environment leave the door wide open for bancassurance providers to step in and capitalise on growing opportunities.

Bancassurance, where insurance companies and banks collaborate to provide insurance products through a bank’s existing customer base, is still in its nascent stages in the Gulf region.

Though the potential is huge, challenges still remain, and regional experts will discuss the way forward at the inaugural Bancassurance Mena Summit, which will take place from February 17 to 19 at The Address Hotel, Dubai Mall.

DJ Sengupta, regional head of Insurance for Europe, Middle East and Africa at Citibank, and an expert to take part in the summit, said that an evolving business attitude among banks and wider acceptance of bancassurance will lead to a more mature market.

“In previous years most banks in the region were focused on lending,” said Sengupta.  “Very few banks had a wealth management business, let alone insurance until a few years back.”

Sengupta sounded a warning for the bancassurance industry, adding that a stronger regulatory environment was needed to discourage ‘rogue distributors’ and to improve customer loyalty.  

“Insurance companies will have to be careful who they partner with and they will have to ensure a good control culture for the long-term growth of the industry,” he said.

“There is an urgent need to increase the trust on insurance products and both insurance companies and banks have a leading role to play.  Supported by the right regulatory environment, this can take this business to the next level.”

Creating the business case for bancassurance in the Middle East regulatory environment will be one of the major panel discussions at the summit, where regional players will examine the potential growth of the burgeoning distribution channel.

Organised by IIR Middle East, the summit will bring together leading regulators, insurers, banks, consultants and IT providers to identify market growth strategies as well as models to improve the returns and profitability of this growing channel.

Jamie McNish, regional director of Partnership Distribution, at Friends Provident International, the headline sponsor of the summit, said: “Our bancassurance proposition forms a core part of our distribution strategy, and the summit gives us an excellent opportunity to showcase our expertise to key decision makers from the banking industry.” - TradeArabia News Service