THE EFFECT OF MEDIA REPRESENTATION ON THE DEVELOPMENT OF BANCASSURANCE IN THE REPUBLIC OF SERBIA

Abstract

The intense competition among banks, in terms of narrowing the interest margins, has led to an increase in administrative and marketing expenses and has limited the profit margins of traditional banking products. At the same time, there has been a change in the preferences of bank clients in terms of reduced interest in investing in the classic banking products of the deposits-saving character and an increasing interest in investing in various forms of life and voluntary pension insurance. Accordingly, as well as with a number of other developments in the market for financial services in the last two decades, a connection between banks and insurance companies has been formed. This process is known as bancassurance. Bancassurance in its simplest form represents the distribution of insurance products through the branch network of banks as a sales channel. For banks this is a way to increase customer loyalty, the diversity of offers and the source of additional income in the form of a reimbursement paid by the insurer. In bancassurance, insurance companies see a relatively inexpensive sales channel of insurance compared to traditional channels, which allows them better market positioning and easier access to a higher quantity of clients. The largest success that bancassurance has had, is with the sale of life insurance, keeping in mind the similarity with the traditional deposit banking products. Past results of the implementation of bancassurance in the Republic of Serbia are insignificant in comparison to the value achieved on this basis in most EU countries. Apart from the objective factors, such results are caused by the lack of information among the population about the possibilities of purchasing different types of financial services in one place (in a bank) and numerous benefits which such integrated purchasing offers. The success of bancassurance largely depends on the determination of the participants (banks and insurance companies) to present the sales channel through the joint appearance on the market, continuous advertisement in the media, especially those who have access to the widest part of the population. For that reason, special emphasis is given to the influence of media representation for the faster development of bancassurance, which would result in greater awareness and education of the population on that basis, which can later cause an increase in life and non-life insurance sales, given the size of the client basis and sales capacities of Serbian commercial banks.