Digital challengers last hope for bancassurance revival

Digital challengers may be the last hope for a bancassurance revival, according to GlobalData Financial Services

Challenger bank Starling announced a range of partnerships in early 2018, including one with insurtech player KASKO, in what may be a glimpse into the future of the bancassurance channel.

The partnership will result in KASKO (backed by AXA) having a widget on Starling’s online marketplace, meaning customers can login using their Starling details.

Other financial services, such as pensions, savings, and mortgages, will be available here, as customers will have access to a range of products within one app, with one set of login details.

Innovation in the bancassurance channel has been sparse, and its share of insurance distribution has remained static in recent years, despite easy access to customers.

Furthermore, mainstream banks appear to be, if anything, pulling back from insurance, with Lloyds cutting 1,000 jobs in February 2018 largely from its insurance-focused team. The future of the bancassurance space may then be less about the main players, such as Lloyds, and more about digital, tech-savvy challenger banks.

Starling is not the first digital challenger bank to move into the insurance sector. It follows mobile bank N26, which set up a digital insurance service in Germany in 2017 after partnering with robo-advisor Clark.