Evaluation of Bancassurance Models and their Contribution to Insurance Penetration in Nigeria

Bancassurance, the distribution of insurance products through bank channels, offers a cost-effective strategy for expanding insurance penetration in Nigeria, where insurance coverage remains among the lowest in Africa. This study evaluates the operational models and effectiveness of bancassurance arrangements in contributing to insurance penetration in Nigeria. A mixed-methods professional assessment was adopted, with primary data collected from 50 bancassurance relationship managers, product specialists, and bank branch staff across seven banks and their insurance company partners in Lagos, Abuja, and Port Harcourt. Secondary data were obtained from the National Insurance Commission and Central Bank of Nigeria bancassurance framework implementation reports for the period 2017 to 2022. Insurance penetration contribution was measured by the number of policies sold through bank channels, premium income generated, and new customer segments reached. Descriptive statistics and thematic analysis were employed. Results showed that bancassurance contributed to a 34% increase in life insurance policy uptake in partner bank customer bases between 2018 and 2022. Credit-linked insurance products tied to bank loans were the most successful bancassurance products, accounting for 67% of policies sold. Standalone health and savings-linked insurance products underperformed due to limited staff product training. The study concludes that bancassurance is an effective insurance penetration vehicle in Nigeria, but its full potential requires deeper bank staff training and product simplification. Recommendations include mandatory bancassurance staff certification under the Chartered Insurance Institute of Nigeria.

Keywords: bancassurance, insurance penetration, bank channels, Nigeria, credit-linked insurance