IDEAS home Printed from https://ideas.repec.org/a/eee/intfin/v19y2009i4p633-644.html
   My bibliography  Save this article

Expansion and consolidation of bancassurance in the 21st century

Author

Listed:
  • Chen, Zhian
  • Li, Donghui
  • Liao, Li
  • Moshirian, Fariborz
  • Szablocs, Csaba

Abstract

Bancassurance has received much attention from both researchers and policymakers, as it is a major step towards the creation of universal financial markets in the 21st century which are no longer segregated based on industry operations. This study is the first comprehensive study to identify and measure the determinants of bancassurance using a sample of firms from 28 developed and developing countries. Our results complement the existing literature on bancassurance demand, insurance demand, and international insurance services, while also providing additional insight in key areas. The empirical results, based on panel analysis, indicate that reduction in company risk, the size of the company, reductions in company costs and increases in company revenues, the size of the national banking industry, the level of financial deregulation within a country, and the national inflation rate all play significant roles as determinants of bancassurance.

Suggested Citation

  • Chen, Zhian & Li, Donghui & Liao, Li & Moshirian, Fariborz & Szablocs, Csaba, 2009. "Expansion and consolidation of bancassurance in the 21st century," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 19(4), pages 633-644, October.
    • Handle: RePEc:eee:intfin:v:19:y:2009:i:4:p:633-644
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1042-4431(08)00058-9
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Donghui Li & Fariborz Moshirian & Pascal Nguyen & Timothy Wee, 2007. "The Demand for Life Insurance in OECD Countries," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 74(3), pages 637-652, September.
    2. Elyasiani, Elyas & Mansur, Iqbal & Pagano, Michael S., 2007. "Convergence and risk-return linkages across financial service firms," Journal of Banking & Finance, Elsevier, vol. 31(4), pages 1167-1190, April.
    3. Amel, Dean & Barnes, Colleen & Panetta, Fabio & Salleo, Carmelo, 2004. "Consolidation and efficiency in the financial sector: A review of the international evidence," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2493-2519, October.
    4. John H. Boyd & Stanley L. Graham, 1988. "The profitability and risk effects of allowing bank holding companies to merge with other financial firms: a simulation study," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 12(Spr), pages 3-20.
    5. DeYoung, Robert & Roland, Karin P., 2001. "Product Mix and Earnings Volatility at Commercial Banks: Evidence from a Degree of Total Leverage Model," Journal of Financial Intermediation, Elsevier, vol. 10(1), pages 54-84, January.
    6. Mr. Gianni De Nicolo & Mr. Myron L. Kwast, 2002. "Systemic Risk and Financial Consolidation: Are they Related?," IMF Working Papers 2002/055, International Monetary Fund.
    7. Robert DeYoung & Tara Rice, 2004. "Noninterest Income and Financial Performance at U.S. Commercial Banks," The Financial Review, Eastern Finance Association, vol. 39(1), pages 101-127, February.
    8. Canals, Jordi, 1998. "Universal banks:: The need for corporate renewal," European Management Journal, Elsevier, vol. 16(5), pages 623-634, October.
    9. Renbao Chen & Kie Ann Wong, 2004. "The Determinants of Financial Health of Asian Insurance Companies," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 71(3), pages 469-499, September.
    10. Estrella, Arturo, 2001. "Mixing and matching: Prospective financial sector mergers and market valuation," Journal of Banking & Finance, Elsevier, vol. 25(12), pages 2367-2392, December.
    11. Carow, Kenneth A., 2001. "Citicorp-Travelers Group merger: Challenging barriers between banking and insurance," Journal of Banking & Finance, Elsevier, vol. 25(8), pages 1553-1571, August.
    12. Cowan, Arnold R. & Howell, Jann C. & Power, Mark L., 2002. "Wealth effects of banks' rights to market and originate annuities," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(3), pages 487-503.
    13. Allen, Linda & Jagtiani, Julapa, 2000. "The risk effects of combining banking, securities, and insurance activities," Journal of Economics and Business, Elsevier, vol. 52(6), pages 485-497.
    14. De Nicolo, Gianni & Kwast, Myron L., 2002. "Systemic risk and financial consolidation: Are they related?," Journal of Banking & Finance, Elsevier, vol. 26(5), pages 861-880, May.
    15. Berger, Allen N. & Humphrey, David B. & Pulley, Lawrence B., 1996. "Do consumers pay for one-stop banking? Evidence from an alternative revenue function," Journal of Banking & Finance, Elsevier, vol. 20(9), pages 1601-1621, November.
    16. Boyd, John H. & Graham, Stanley L. & Hewitt, R. Shawn, 1993. "Bank holding company mergers with nonbank financial firms: Effects on the risk of failure," Journal of Banking & Finance, Elsevier, vol. 17(1), pages 43-63, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Małgorzata Rutkowska & Nina Szczygieł, 2016. "Bancassurance as a Source of Financing Eco-investments: The Polish Case within the European Context," WORking papers in Management Science (WORMS) WORMS/16/03, Department of Operations Research and Business Intelligence, Wroclaw University of Science and Technology.
    2. Oleg Curbatov & Marie Louyot-Gallicher, 2015. "Knowedge Marketing," Post-Print hal-01423209, HAL.
    3. Saon Ray, 2020. "India's Insurance Sector: Challenges and Opportunities," Indian Council for Research on International Economic Relations (ICRIER) Working Paper 394, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    4. Tsai-Jyh Chen, 2019. "Marketing channel, corporate reputation, and profitability of life insurers: evidence of bancassurance in Taiwan," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(4), pages 679-701, October.
    5. Jaweria Yameen & Ploypailin Kijkasiwat & Anwar Hussain & Muhammad Azhar Farooq & Tahira Ajmal, 2024. "Green finance in banking industry: a systematic literature review," SN Business & Economics, Springer, vol. 4(8), pages 1-28, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mühlnickel, Janina & Weiß, Gregor N.F., 2015. "Consolidation and systemic risk in the international insurance industry," Journal of Financial Stability, Elsevier, vol. 18(C), pages 187-202.
    2. Chiaramonte, Laura & Dreassi, Alberto & Piserà, Stefano & Khan, Ashraf, 2023. "Mergers and acquisitions in the financial industry: A bibliometric review and future research directions," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Elyasiani, Elyas & Mansur, Iqbal & Pagano, Michael S., 2007. "Convergence and risk-return linkages across financial service firms," Journal of Banking & Finance, Elsevier, vol. 31(4), pages 1167-1190, April.
    4. Elyas Elyasiani & Sotiris K. Staikouras & Panagiotis Dontis-Charitos, 2016. "Cross-Industry Product Diversification and Contagion in Risk and Return: The case of Bank-Insurance and Insurance-Bank Takeovers," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(3), pages 681-718, September.
    5. Mamun, Abdullah, 2023. "Understanding growth and its policy implications for Canadian credit unions," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 652-665.
    6. Fields, L. Paige & Fraser, Donald R. & Kolari, James W., 2007. "Bidder returns in bancassurance mergers: Is there evidence of synergy?," Journal of Banking & Finance, Elsevier, vol. 31(12), pages 3646-3662, December.
    7. Robert DeYoung & Douglas Evanoff & Philip Molyneux, 2009. "Mergers and Acquisitions of Financial Institutions: A Review of the Post-2000 Literature," Journal of Financial Services Research, Springer;Western Finance Association, vol. 36(2), pages 87-110, December.
    8. Saqib Aziz & Michael Dowling & Jean-Jacques Lilti, 2016. "Bank Acquisitiveness and Financial Crisis Vulnerability," Post-Print hal-01393953, HAL.
    9. Diaz, Belen Diaz & Olalla, Myriam Garcia & Azofra, Sergio Sanfilippo, 2004. "Bank acquisitions and performance: evidence from a panel of European credit entities," Journal of Economics and Business, Elsevier, vol. 56(5), pages 377-404.
    10. Li, Li & Zhang, Yu, 2013. "Are there diversification benefits of increasing noninterest income in the Chinese banking industry?," Journal of Empirical Finance, Elsevier, vol. 24(C), pages 151-165.
    11. Barbara Casu & Panagiotis Dontis†Charitos & Sotiris Staikouras & Jonathan Williams, 2016. "Diversification, Size and Risk: the Case of Bank Acquisitions of Nonbank Financial Firms," European Financial Management, European Financial Management Association, vol. 22(2), pages 235-275, March.
    12. Korhonen, Pekka & Voutilainen, Raimo, 2006. "Finding the most preferred alliance structure between banks and insurance companies," European Journal of Operational Research, Elsevier, vol. 175(2), pages 1285-1299, December.
    13. Slijkerman, Jan Frederik & Schoenmaker, Dirk & de Vries, Casper G., 2013. "Systemic risk and diversification across European banks and insurers," Journal of Banking & Finance, Elsevier, vol. 37(3), pages 773-785.
    14. Saqib Aziz & Michael Dowling & Jean-Jacques Lilti, 2016. "Bank Acquisitiveness and Financial Crisis Vulnerability," Post-Print halshs-01360952, HAL.
    15. Mamun, Abdullah & Meier, Garrett & Wilson, Craig, 2023. "How do noninterest income activities affect bank holding company performance?," Finance Research Letters, Elsevier, vol. 53(C).
    16. Panagiotis Dontis‐Charitos & Philip Molyneux & Sotiris K. Staikouras, 2011. "Does the Stock Market Compensate Banks for Diversifying into the Insurance Business?," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 20(1), pages 1-28, February.
    17. Jan Frederik Slijkerman & Dirk Schoenmaker & Casper de Vries, 2005. "Risk Diversification by European Financial Conglomerates," Tinbergen Institute Discussion Papers 05-110/2, Tinbergen Institute.
    18. Nadia Bensaci, 2008. "L’analyse de la banque selon le paradigme de la finance et l’examen du modèle de banque universelle en France," Revue d'Économie Financière, Programme National Persée, vol. 91(1), pages 127-142.
    19. Christian Calmès & Raymond Théoret, 2013. "The change in banks' product mix, diversification and performance: An application of multivariate GARCH to Canadian data," RePAd Working Paper Series UQO-DSA-wp012013, Département des sciences administratives, UQO.
    20. Mr. Gianni De Nicolo & Ms. Mary G Zephirin & Philip F. Bartholomew & Ms. Jahanara Zaman, 2003. "Bank Consolidation, Internationalization, and Conglomeration: Trends and Implications for Financial Risk," IMF Working Papers 2003/158, International Monetary Fund.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intfin:v:19:y:2009:i:4:p:633-644. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/intfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.