The first banking division for insurance mediation was established in the RS at the beginning of the year. This represents a step in the development of the local market that is burdened by unfair competition and illegal rebates.
The RS Insurance Agency said that for a long time legislation provides insurance brokerage, but that only this year has the need developed for a new vision to connect clients and insurance companies.
The Banja Luka Hypo Alpe Adria Bank, Balkan Investment Bank and the “First Broker” Society obtained permission to work in insurance brokerage in 2013.
Insurance brokers, in contrast to agents who work for insurance companies as their ‘extended arm’, are working in the interest of their clients and advise on what type of insurance to select and the risks from which they should protect themselves. They do not charge a commission from the client, but rather from the insurance companies.
The Director for the RS Insurance Agency Božana Šljivar said that insurance companies have expressed interest to change traditional sales channels across individuals, and to turn to collaboration with banks that have an advantage due to a large network of branches and direct contact with clients.
She expressed hope that the entry of banks into insurance mediation would contribute to the partial suppression of unfair competition, because she believes that due to their reputation they would consistently comply with legal regulations.
“Bank insurance is especially attractive for companies that could now obtain a package of financial services in one place, from loans, securities trading, to offers of insurance policies”, said Šljivar, and suggesting that this is a common practice in many EU countries.
