Bancassurance: Challenges and Opportunities in Republic of Serbia

Bancassurance is not just a sale of insurance products at bank counters, but a complex cooperation involving both partners in the project realization, with the goal of satisfying their own interests as well as clients' interests. In the Republic of Serbia, banks began to deal with insurance activities in 2007. Since then, the sale of insurance products through banks has been constantly growing. The paper will present the current bancassurance models in the Republic of Serbia: integral distribution; expert distribution and combined distribution. The paper will present the comprehensive condition of bancassurance in the Republic of Serbia, above all the legal framework of the bancassurance concept; activities necessary for the successful implementation of bancassurance; market participants; competition among banking products and insurance products; the current level of cooperation between banks and insurance companies. Participants in the insurance market established by the Republic of Serbia, such as the National Mortgage Insurance Corporation, the Serbian Export Credit and Insurance Agency and the Deposit Insurance Agency, will be presented in paper, with an overview of the advantages and disadvantages of state insurance regulations. By gathering facts and data based on available literature and public databases, the current state of the insurance market and the possibilities for further development of bancassurance in the Republic of Serbia will be determined. The choice of a bancassurance model is essential for the successful functioning of the overall concept and its long-term sustainability in a dynamic business environment. The paper points to the fact that by designing an adequate bancassurance model, there may be a significant development of the Serbian financial services market.