In what ways are the insurance industry and banking sector connected?
Banking
Asked by Question Bot10/Jan/20141 answer
1 Answer
F
Faisal Khan
Answered 10/Jan/2014
Insurance, like banking is all about risk management and the premium applied for managing that risk. The field of Insurance is actually governed by Actuarial Sciences, which is based on statistical and probability mathematics.
You are correct, many banks would keep insurance premiums as interest fees (depending on how the deposit product is structured), some even offer a minimal payout on it (just to keep it attractive).
Banks in themselves don't market insurance products per se on their own, they usually partner with insurance companies and offer the product as part and parcel (read: packaged) of their overall financial products available to individuals, families and businesses.
From a bank's perspective, the risk management that the bank incorporates with respect to the deposites vs loans, is also based on actuarial sciences, along with other complex financial models on how to best balance and manage the money the bank has, and the risks the financial marketplace the bank is operating in.
You are correct, many banks would keep insurance premiums as interest fees (depending on how the deposit product is structured), some even offer a minimal payout on it (just to keep it attractive).
Banks in themselves don't market insurance products per se on their own, they usually partner with insurance companies and offer the product as part and parcel (read: packaged) of their overall financial products available to individuals, families and businesses.
From a bank's perspective, the risk management that the bank incorporates with respect to the deposites vs loans, is also based on actuarial sciences, along with other complex financial models on how to best balance and manage the money the bank has, and the risks the financial marketplace the bank is operating in.