Efficiency in the Life Insurance Industry : What are the Efficiency Gains from Bancassurance?

The aim of this paper is to assess whether bancassurance firms outperform other life insurance companies. Cost and profit efficiency are estimated using a stochastic frontier analysis and including several firm‐specific factors to overcome possible sample heterogeneity. On the cost side, we find strong evidence in favour of bancassurance as a distribution channel. Results on the profit side suggest the need to continuously revise the product mix. Bank ownership is not found to provide any direct advantages. As a consequence, the subjects involved should carefully consider looser forms of cooperation, such as cross‐selling agreements and non‐equity strategic alliances