Management Closeness Factor Impact on Bancassurance Development in Latvia

Abstract

Banks and insurers as part of financial service industry engage in partnership under the concept of Bancassurance. On the path to success, both parts are permanently looking for increased income possibilities and higher level of customer's satisfaction. Those aspects are on researchers agenda in many countries. Academics are providing academic society, as well as business society with the research results on a topic -What are the key factors influencing the development of Bancassurance. The researchers in many countries analyse market-based and operational-based factors determining more successful or less successful performance within the chosen Bancassurance model. Operational-based factors cover corporate closeness, management initiative and corporate governance issues. These factors role becomes critical for Bancassurance implementation especially in the companies with different business cultures. Such companies' transformation takes uneven path from diversity to harmony in banks and insurance company's corporate governance and management excellence. It includes the top level of companies, as well as sales staff philosophy and work with common clients' database. General solution is deeper integration of banks' and insurance companies' top management and main operational processes to be able to sell combined banking-insurance products to their common clients. Aim of this research paper is to investigate the role of management team in development of Bancassurance in Latvia. Research tasks are: 3. compare differences of representatives of financial market experts and representatives of banks on factors influencing Bancassurance in Latvia; and 4. test proposition: "Management closeness determines successful partnership and enlarges integration possibility of banks and insurance companies in Bancassurance".Research methods used: analysis of scientific publications, analysis of previous conducted research, expert survey, case studies analysis. To test the proposition two types of units have been analysed: total system units -financial institutions, https://doi.org/10.22364/hssl.27.1.07 depends on a character of partnership between the bank and the insurer carried out by teams. Effective teamwork depends on management style, types of personalities, interpersonal relationship and gender diversity. Therefore, the significance of Bancassurance partners' management closeness in successful partnership, which also enlarges integration possibility between the companies, has been approved. For Bancassurers this finding highlights the importance of interpersonal relationship in business success. It provides the necessity to create the cooperation management framework between the bank and insurance company and maintain on every level of companies' structures through all Bancassurance life circles in the company.