BANCASSURANCE AS AN EFFECTIVE TOOL FOR PROMOTING INSURANCE PENETRATIONAND CREATION OF INSURANCESERVICES AWARENESS IN TANZANIA

BancAssurance is anon-conventional distribution channel of insurance products through banks. In some advanced economies, it has had a profound impact on increasing sales volumes, securing new market niche of more than 50 percent in Long term assurance and more than 10 percent in General Insurance or P&C segment. Its impact is not even worldwide as in other developed countries, it has had much less impact. As a strategic tool in both advanced and developing economies, its benefits to those countries are wide ranging. This article discusses the strategic potential of BancAssurance it can contribute to provision of liquidity to banks, income growth through commission collection, management of credit risks, the growth of insurance market in terms of penetration and the stability that both life and non-life insurance products can bring to developing countries. The article also discusses on how some approaches work better than others, and how regulation and consumer protection issues can impact such development together with the possible challenges faced by developing countries in promoting insurance market expansion. The paper shade some lights on the operation of BancAssurance in a major developed market such as France. Multivariate econometric OLS model was used to depict the impact of BancAssurance product in enhancing insurance penetration in Tanzania.Independent variables of the model are; Banc-Assurance Market Share (BMS) in percentage, logarithmic function for Gross Domestic Product (logGDP) and Gross Written Premium (logGWP) respectively, while the dependent variable is Insurance Penetration in percentage (IP).