Cell Captive, a perfect vehicle for Bancassurance

The demand of third party cell captives by banks and some micro lending institutions is on a steady rise across the globe. The banks are utilising cell captives as vehicles to capture profitable lines of business that are best suited to be distributed by banks. Cell captives allow the bank to earn three types of income which are finders� fee/ commission, underwriting profit and investment income.

Bancassurance or allfinanz as it is sometimes known, is the partnership or relationship between a bank and an insurance company, or a single integrated organisation, whereby the insurance company uses the bank sales channel in order to sell insurance products, an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank’s client base.

Cell Captives can assist a bank to develop insurance solutions that provide a strategic competitive advantage. Taking credit life insurance as an example, a bank will be able to provide point of sale credit life insurance making the loan application process and insurance provision seamless compared to competitor banks that require the loan client to go and apply for credit life insurance at another insurer. Further, other bancassurance products such as life assurance and endowment policies that can be sold via a cell captive structure may have the benefit of building loyalty with the client thus enabling the bank to reduce customer churn.

Maksure Risk Solutions, a global independent specialist insurance and reinsurance broker with African roots has assisted a number of micro lenders and banks to set up and manage their cell captives resulting in new revenues for their clients.

To find out how Maksure can be of assistance to you, contact Simba Makwembere on his email address simba@maksure.co.za