Bancassurance in Spain: DBRS comments

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Insurance

DBRS, an independent international ratings agency, has published a commentary on the bancassurance channel in Spain, detailing its dominant position in the Spanish life insurance market and its predicted contribution to the growth in Spanish banks’ earnings.

DBRS noted that ‘a significant number of Spanish banks have created wholly-owned insurance subsidiaries’ – such as Santander Seguros – or have established ‘joint-venture agreements with traditional insurance companies’. Take SegurCaixa Adeslas, for example, owned 50/50 by Mutua Madrileña and CaixaBank.

DBRS attributes these wholly-owned subsidiaries and joint ventures as an ‘indication of the maturity of the bancassurance model in Spain’, as well as an illustration of the ‘tighter control’ of and more involvement in insurance operations, which local banking groups prefer. As a result, DBRS suggests that the bancassurance channel dominates the life insurance market, accounting for almost 70 per cent of total gross written premiums in Spain during 2016.

DBRS expects that bancassurance will continue to contribute a significant proportion of Spanish banks’ earnings, noting that ‘the positive tax treatment of certain life insurance saving products versus traditional banking saving accounts as a growth catalyst for the bancassurance channel’. It also details the top 10 life insurers in Spain in 2018, based on gross written premiums, placing VidaCaixa, Bansabadell Vida and Santander Seguros first, second and third respectively.

The commentary goes on to detail how the global financial crisis impacted the structure of the bancassurance channel and highlights potential growth opportunities that the Spanish insurance market presents.

Read the full commentary online - DBRS: Bancassurance in Spain – Supporting Banks’ Profitability.