Bancassurance covers a wide range of detailed arrangements between banks and insurance companies, but in all cases it includes the provision of insurance and banking products and services from the same source or to the same customer base. Also, because there is a wide diversity of strategies available, there is no standard model for bancassurance. Accordingly, there are a range of possible descriptions and definitions of bancassurers.

The Life Insurance Marketing and Research Association's (LIMRA) insurance dictionary defines bancassurance as 'the provision of life insurance services by banks and building societies'. The Association of British Insurers (ABI) defines bancassurers as 'insurance companies that are subsidiaries of banks and building societies and whose primary market is the customer base of the bank or building society'. Another common definition of bancassurance is 'the involvement of banks, savings banks and building societies in the manufacturing, marketing or distribution of insurance products'. For the purposes of this report, Mintel defines bancassurance as the 'the provision of insurance and banking products through a common distribution channel and/or the same client base'.

Bancassurance covers a wide range of detailed arrangements between banks and insurance companies, but in all cases it includes the provision of insurance and banking products and services from the same source or to the same customer base. Also, because there is a wide diversity of strategies available, there is no standard model for bancassurance. Accordingly, there are a range of possible descriptions and definitions of bancassurers.

The Life Insurance Marketing and Research Association's (LIMRA) insurance dictionary defines bancassurance as 'the provision of life insurance services by banks and building societies'. The Association of British Insurers (ABI) defines bancassurers as 'insurance companies that are subsidiaries of banks and building societies and whose primary market is the customer base of the bank or building society'. Another common definition of bancassurance is 'the involvement of banks, savings banks and building societies in the manufacturing, marketing or distribution of insurance products'. For the purposes of this report, Mintel defines bancassurance as the 'the provision of insurance and banking products through a common distribution channel and/or the same client base'.

The appearance and development of bancassurance has been one of the most significant competitive developments in the retail financial services sector. Many banking institutions and insurance companies have found bancassurance to be an attractive - and often profitable - complement to their core businesses. To date, the successes of bancassurance strategies have, however, been far from uniform across all companies and countries. Nevertheless, the promise of being able to leverage the profitability of large customer bases and extensive distribution networks has attracted the attention of the retail financial services sector and encouraged more and more organisations to diversify outside their traditional competitive domains.

A key aim of this report is to identify the motivations that have driven banks and insurance companies to follow bancassurance strategies. Much of the research focuses on the impact that retail banks have had on the distribution of life and pension products. Mintel has examined the capabilities and advantages that banks can leverage in the manufacture, supply and distribution of these products. This report also identifies the key challenges and obstacles that they have faced in attracting new and transfer business from more traditional channels and providers.

In the deregulated financial services sector the pre-eminent battle among constituents has become for customer loyalty and share of customers' total financial services expenditure. No longer content with selling only a mortgage, a deposit account or an insurance policy, banks and insurance companies are increasingly operating in one another's traditional spheres. They have increasingly focused on becoming the 'one-stop shop' that provides the majority of each customer's personal finance requirements.

Mintel has therefore commissioned consumer research specifically for this report, the aim being to examine both current behaviour and future intentions with regard to arranging pensions, life insurance and general insurance from high street. The research was conducted with the following objectives in mind:

· to identify the banks and building societies where consumers hold current accounts and to determine what other financial products and services they owned;

· to determine what financial products consumers have arranged through their bank;

· to examine the distribution channels that consumers prefer/would prefer to use when buying/arranging general insurance, long-term insurance and pension products;

· to investigate consumers' attitudes towards and perceptions of arranging general insurance, life protection and pensions products from banks or building societies.

The report concludes with an evaluation of the likely future of bancassurance and a forecast of how bancassurance premium income is likely to change over the next few years. This will give both banks and insurance companies a valuable insight into whether or not they should now be forging strategic alliances and/or developing home-grown banking and insurance offerings.

Other Mintel reports of relevance include:

- Life Protection, Finance Intelligence - UK Report, October 2002

- Customer Retention: Solving the Puzzle, Special Report - UK Report, December 2002.

and the forthcoming reports:

- Personal Pensions, Finance Intelligence - UK Report, March 2003

- Premium Pensions, Finance Intelligence - UK Report, May 2003

- Targeting the Unpensioned, Finance Intelligence - UK Report, June 2003

- The Term Assurance Market, Finance Intelligence - UK Report, October 2003

- Wealth Management and Private Banking, Finance Intelligence - UK Report, December 2003.