Bancassurance in Belgium – A Key Driver for Banks’ Profitability

Belgian banks have traditionally benefited from significant bancassurance activities with strong domestic market shares, particularly in life insurance. DBRS Morningstar expects insurance revenues to remain a steady and material contributor to Belgian banks’ profits, particularly in the ongoing low interest rate environment.

Key highlights of the commentary on Bancassurance in Belgium include:

• The bancassurance channel has become very important in the Belgian life insurance landscape, representing around 40% of total gross written premiums.
• The bancassurance channel is gradually displacing insurance brokers in Belgium.
• With the decline of life insurance premiums, competition has intensified, and Belgian banks have used their significant retail presence to defend their position in the insurance market.
• Bancassurance has proven a stable contributor to Belgian banks’ revenues, supporting fee generation and lower operating costs.

“We consider that insurance has allowed Belgian banks to counter the pressure on the retail revenue side in the ultra low interest rate environment. In addition, the “one stop shop” approach applied to bancassurance in Belgium not only supports fee generation, but also allows banking institutions to lower costs through cross-selling from a single point of sale. This has proven useful in an environment where cost efficiency has become a key driver to support profitability” said Arnaud Journois, Vice President - Global Financial Institutions Group, DBRS Morningstar.

The full commentary, titled “Bancassurance in Belgium – A Key Driver for Banks’ Profitability” can be found on dbrs.com.