Does Bancassurance Reduce the Price of Financial Service Products?
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- Okeahalam, C.C. J Finan Serv Res (2008) 33: 147. doi:10.1007/s10693-008-0031-x
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I assess the impact of bancassurance on the price of retail financial services. I find that service fees in a product bundle increase less than proportionally to the number of services; that an increase in the number of clients in each product bundle market reduces fees by 1.5%; that the degree of competition in the markets of each bundle also reduces fees; that premium products have higher average costs; and finally, that cross-holdings reduce prices by about 5% and bancassurance reduces prices by just over 6%. The price reduction declines if both strategies are combined.