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The impact of bancassurance on efficiency and profitability of banks: Evidence from the banking industry in Taiwan

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  • Peng, Jin-Lung
  • Jeng, Vivian
  • Wang, Jennifer L.
  • Chen, Yen-Chih

Abstract

We set out in this study to investigate whether bancassurance business leads to improvements in the efficiency and profitability of banks. We examine the positive impacts on the system using actual data provided by a unique database on banks engaging in bancassurance business in Taiwan between 2004 and 2012. Our results reveal that banks with greater involvement in bancassurance business generally tend to experience improvements in their efficiency, and thus also accrue greater profits. Our empirical results provide evidence to support that bancassurance business offers substantial benefits for banks, ultimately leading to an increase in shareholder value. Finally, our results also reveal that the adoption of a diversification strategy in bancassurance can impact bank performance.

Suggested Citation

  • Peng, Jin-Lung & Jeng, Vivian & Wang, Jennifer L. & Chen, Yen-Chih, 2017. "The impact of bancassurance on efficiency and profitability of banks: Evidence from the banking industry in Taiwan," Journal of Banking & Finance, Elsevier, vol. 80(C), pages 1-13.
    • Handle: RePEc:eee:jbfina:v:80:y:2017:i:c:p:1-13
    DOI: 10.1016/j.jbankfin.2017.03.013
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    More about this item

    Keywords

    Bancassurance; Banking; Efficiency; Profitability;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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