Stanbic Bank has overtaken Absa and other banks in income generated from selling insurance.
Satnbic earned the highest commission of Shs1.7b from bancassurance during the third quarter of 2020.
According details released by Insurance Regulatory Authority, 20 banks licensed as bancassurance agents, contributed Shs52b out of the Shs818b in gross written premiums.
Banks, in other wards contributed 6.36 per cent of gross written premiums, earning a total of Shs8.2b in commission from selling both life and general insurance.
Life insurance contributed the highest to their earnings generating Shs6.2b while general insurance contributed Shs1.9b to banks’ commissions between January and September.
Stanbic Bank overtook Absa and Housing Finance, which had earned more commission from life and general insurance, respectively during the first quarter.
Stanbic, which was the first to obtain a bancassurance licence in 2017, earned Shs1.7b from life and Shs541.2m from general insurance.
The bank, during the period, collected Shs9.1b in premiums for life insurance and Shs4.3b in premiums for general insurance.
It was followed by Absa, Centenary Bank, Standard Chartered and Orient Bank, which earned Shs1.5b, Shs696m, Shs621.5m and Shs313m in commissions from life insurance, respectively.
In general insurance, Stanbic was followed by Housing Finance, Post Bank, Centenary and KCB with Shs206.8m, Shs182.4m, Shs158.5m and Shs128m, respectively in commission.
Mr Protazio Sande, the IRA director of market research and development, recently said banks earn more from life insurance because of their nature as credit issuers.
Banks, he said, leverage on credit life or loan protection, which insures risk in case of inability to pay back in case of death or permanent disability, among others.
Bancassurance, only in its third year, is steadily growing, which is one of the threats to brokers who fear banks will take away their clients and as a result their commissions as well.
However, agents have been urged to be more innovative to ensure they remain relevant.
Commissions earned from Bancassurance
IRA, in partnership with global consulting service has also introduced the annual insurance innovation awards to boost and recognise excellence in innovation by licensed players.