Classification of Business Models of Italian Bancassurance by Balance Sheet Indicators
The aim of paper is to analyze business models of bancassurance in Italy for life business. The life insurance business is very developed in the Italian market and banks branches have 80% of the market share. Given its maturity, the life insurance market needs to consolidate its organizational form to allow for the development of non-life business, which nowadays collects few premiums but represents a great opportunity to enlarge the market share of bancassurance using its strength in the distribution channel while the market share of independent agents is decreasing. Starting with the main business model of bancassurance for life business, this paper will analyze the performances of life companies in the Italian market by balance sheet indicators and by main discriminant variables of business models. The study will observe trends from 2013 to 2015 for the Italian market by exploiting a database managed by Associazione Nazionale delle Imprese di Assicurazione (ANIA). The applied approach is based on a bottom-up analysis starting with variables and indicators to define business models’ classification. The statistical classification algorithm proposed by Ward is employed to design business models’ profiles. Results from the analysis will be a representation of the main business models built by their profile related to indicators. In that way, an unsupervised analysis is developed that has the limit of its judgmental dimension based on research opinion, but it is possible to obtain a design of effective business models.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1131647Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 839
 W. Elkington, “Bancassurance,” in Chartered Building Societies Institutions Journal, p.2, March.
 SWISS RE, Bancassurance, Sigma, no. 2/1992, p. 4, Zurich.
 J. H. Boyd, S. L. Graham, R. S. Hewitt, “Bank Holding companies mergers with nonbank financial firms: effect of the risk of failure,” Journal of Banking and Finance 17:1, pp. 46-63.
 N. Genetay, P. Molyneux, Bancassurance. London: Macmillan Press,1998.
 R. Locatelli, C. Morpugno and A. Zanette, “L’integrazionetrabanche e compagnie di assicurazione e ilmodellodeiconglomeratifinanziari in Europa,”in F. Cesarini (ed.) Le strategie delle grandi banche in Europa. Rome: BancariaEditrice, 2003.
 G. Berghendal, “The profitability of bancassurance for European banks,”International Journal of Bank Marketing, XIII, pp.17-28, 1995.
 L. Allen and A.Rai, “Operational efficiency in banking: an international comparison,” Journal of Banking & Finance, XX, vol.4, pp.655-672, 1996.
 R. Vander Vennet, “Cost and profit efficiency of financial conglomerates and universal banks in europe,” Journal of Money, Credit and Banking, XXXIV, vol. 1, pp. 254-282, 2002.
 B. Casu and C. Girardone, “Financial conglomeration: efficiency, productivity and strategic drive,” Applied Financial Economics, XIV, vol.10, pp. 687-696, 2004.
 D. Cummins, M. Weiss H.Zi, “Economies of Scope in Financial Services: a DEA Bootstrapping Analysis of the US Insurance Industry,” working paper, The Wharton School of the University of Pennsylvania, 2003.
 D. Cummins, G. Turchetti and M.Weiss, “Productivity and technical efficiency in the Italian insurance industry,” Working paper n.97/03, Wharton Financial Institutions Centre, 1996.
 D.Cummins and M. Rubio Misas, “ The effect of organizational structure on efficiency: evidence from the Spanish insurance industry,” Journal of Banking and Finance, 28: 12, pp. 3113-3150, 2004
 W. H. Green, D. Segal, “Profitability and efficiency in the U.S. life insurance industry,” Journal of Productivity Analysis, 21:3, pp.229- 247, 2004.
 P. Fenn, D. Vencappa, S. Diacon, P. Klumpes and C. O’Brien, “Market structure and the efficiency of European insurance companies: a stochastic frontier analysis,” Journal of Banking and Finance, 32: 1, pp.86- 100, 2008.
 J. A. Bikkerand M. Van Leuvensteijn, “Competition and efficiency in the Dutch life insurance industry,” Applied Economics, 40: 16, pp.2063- 2084, 2008.
 T. Hwang and S. Gao, “An empirical study of cost efficiency in the Irish life insurance industry,” International Journal of Accounting, Auditing and Performance Evaluation, 2:3, pp.264- 280, 2005.
 C. B. Barros, N. Barroso and M.R. Borges, “Measuring efficiency in the life insurance industry with a stochastic frontier model,” paper presented at the 28 International Congress of Actuaries, May 28- June 2, 2006, Paris.
 F. Fiordelisi and O. Ricci, “Bancassurance efficiency gains in the insurance industry: the Italian case,” European Journal of Finance, 9-11, vol. 17, pp.789-810,2011.
 J. H. Jr. Ward, “ Hierarchical grouping to optimize an objective function,” Journal of the American Statistical Association, no.58, pp. 236-244, 1963.
 R. Roengpitya, N. Tarashev, K. Tsatsaronis, “Bank business models,” BIS Quarterly Review, December 2014.
 R. Ayadi and W. de Groen, “Banking business models monitor 2014,” Europe Centre for European Policy Studies and International Observatory on Financial Services Cooperatives, 2014.