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Independent intermediaries will provide advice to their client (the buyer) about a whole range of things,
such as the best premiums available in the marketplace, the range of cover and the extent to which the
product they are recommending meets their demands and needs. They may also provide other services,
2 such as help in completing a claim form or advice if a dispute concerning a claim arises. The
Chapter the intermediary is fully briefed on the scope and nature of the product. Complex commercial insurances
responsibility for advice rests upon the independent intermediary, although the insurer must ensure that
are particularly suited to this kind of arrangement.

F3 Bancassurance

Bancassurance is a French word used to describe the arrangement between a bank and an insurance
company whereby insurance products are sold to the bank’s customers – generally through its bank
branches. It is sometimes described as a distribution channel for insurance products, but
bancassurance is a business that involves a bank and an insurer, which may use several distribution
channels to achieve its goal.
The first bancassurance operations were established in Europe and have led to several mergers and
acquisitions across continents. The momentum has been building outside Europe in recent years, as
countries seek to replicate this success in their own financial markets.
Bancassurance offers the following advantages for banks and insurers:
• Access to each party’s ‘scale efficiencies’ (those benefits that a company enjoys purely as a result of
operating on a large scale).
• Lower risk to the business (through access to alternative sources of customer/products).
• Access to previously unavailable resources (from the other party’s company).
• Improving ‘value chain efficiency’ (deriving the most added value from the product development
process, which shows business efficiency).
• Opportunities for joint product development (pooled resources can reduce cost and time for each
party).
• Market development (increased percentage share of the available customers).

G Price comparison websites

As we have seen, brokers and other intermediaries have traditionally searched the market for the most
competitive quotation for a client and many have subscribed to quote engines that provide a range of
quotations from those who they hold agency appointments with.
However, the internet has facilitated different ways of comparing prices, which has led to the
development of price comparison websites, or ‘aggregators’.
A price comparison website collects and analyses data from different sources and the term used for
Price comparison
websites collect data information retrieval for goods and services on the internet is ‘aggregation’. There are web-based
from different sources extraction tools that facilitate transparently gathering information from different sources. In theory, this
may be with or without the permission or knowledge of the underlying data sources.
The websites work with a number of direct insurers and intermediaries to deliver a service to the
customer where the completion of one question set provides quotations from a number of insurance
providers. The customer can then select a company that offers their insurance product at a
competitive rate.
The emergence of these websites as a customer-focused price comparison mechanism has changed the
landscape of the insurance market.

However, they are not without their critics. The imperative to save time and effort in submitting personal
details by limiting the number of questions, the critics point out, may affect the accuracy of quotations.
They add that the results can be confusing as they are not always a true reflection of what it will really
cost with the insurer, once fuller details are submitted.
Price comparison websites can, and do, cut across traditional boundaries: direct insurers, for example,
by definition deal directly with the public. However, the prices of many direct companies may be
accessed through this route.