Introduction

Abstract

Banking markets have experienced a general trend towards conglomeration in recent years, which has been facilitated by the deregulation of banks’ activities in most Western countries. A particular feature of financial conglomeration has been the diversification of banks into insurance activities, and especially life assurance. This has been labelled ‘bancassurance’, using a term pioneered in France where this strategy has been particularly significant. Although many European banks have become actively engaged in the bancassurance strategy through acquisitions, joint ventures and de novo entries, there has been little empirical evidence on the performance of this strategy. The need for further research has been emphasised by a member of the executive board of the ING Group:

Banks and insurers have in common that financial intermediation is at the heart of their production process. (…) What happens if these processes are brought together in one financial services group? (…) What is the resulting risk profile of a merged financial services group? We have made this choice and we are convinced that we now have better possibilities to spread risks and to control them. But we would welcome contributions in this field from the research side.

(Holsboer, 1993, p. 397)