Bank Assurance in South Africa

Bank assurance in South Africa has a relatively short history, as it was only introduced in the late 1990s. Before then, banks and insurance companies operated independently and did not offer each other’s products.

In 1998, the South African government passed the Financial Services Act, which allowed banks and insurance companies to enter into joint ventures to sell each other’s products. This opened the door for banks to offer insurance products to their customers, and for insurance companies to offer banking products.

The first bank assurance joint venture in South Africa was between Nedbank and Old Mutual in 1999. Other banks soon followed, with Standard Bank and Liberty Life forming a joint venture in 2000, and Absa Bank and Santam Insurance forming a joint venture in 2001.

The bank assurance model proved to be successful in South Africa, as it allowed banks to expand their product offerings and insurance companies to reach new customers. By 2007, bank assurance had become a significant part of the South African financial services industry, accounting for around 10% of the country’s insurance market.

However, the bank assurance model has also faced some criticism in South Africa, particularly over concerns about conflicts of interest and the potential for banks to push insurance products onto customers who do not need them.

Overall, bank assurance has had a significant impact on the South African financial services industry, and it remains an important part of the country’s banking and insurance sectors.