Evaluating the Bancassurance Model Applied at Commercial Banks in Vietnam

Bancassurance is a combination between banks and insurance companies. Unlike the traditional distribution channel controlled and managed by insurance enterprises, the distribution channel of insurance products through Bancassurance is responsible for employees of banking partners. There are many cooperation models between insurers and banks, but there are four main cooperation models: Distribution cooperation model, with which banks will act as intermediaries to distribute and provide products to insurance companies. The second model is the strategic alliance model, also known as crossholding. In this model, the bank sells only one insurance company's products and holds shares of that insurance company. The third model is the joint venture model. In this model, both insurance enterprises and banks contribute capital to establish an insurance company and organize the operation of providing insurance products. The fourth most popular model is the merger model to become a financial corporation. This is the highest cooperation model between banks and insurance companies. These models all carry the pros and cons of the Bancassurance distribution channel. However, which model to apply depends entirely on the financial capacity, the system of facilities, the staff of the bank, and the insurance enterprise. In addition, for the cooperation model to be effective, both businesses and banks must always evaluate the results and eliminate the current points of this distribution channel.