The bank reorganizes its millionaire alliances with insurers to increase its commission billing
The bank prepares for the end of cheap credits. Interest rates have been rising for months and the ECB has already set a date for the first rate hike in 11 years. In the long period in which they have moved in the negative field, banking has driven growth in other businesses that gave greater profitability with significant income from commissions. One of these activities is insurance and in the last two years there has been a shift in the map of alliances between banks and their partners in the insurance sector in the last two years. These changes have brought with them millionaire agreements.
The mergers in CaixaBank or Unicaja and the changes of partners in BBVA or Bankinter are some of the operations that have taken place in the sector to compete in a product that has become very important in the banks' strategy of retaining customers with multiple products. Schemes are often similar. Banks create companies to bring together their entire insurance business and subsequently sell a stake of more than 50% to their insurance partners.
These agreements usually have exclusivity conditions. In this way, the insurer has unrivaled access to the entire network of clients and offices of the bank with which it seals the alliance to sell its products. The bank, for its part, obtains a channel of income from commissions. In addition, it serves as an added product to your traditional services such as mortgages or current accounts with which you can agree savings for customers in the costs that you pass on. For example, signing a loan to buy a house will usually be cheaper if the necessary insurance is formalized with the entity itself than with another insurer.
The last of these operations has been carried out by Unicaja. Just a few weeks ago, the Andalusian bank completed one of the last fringes of the merger with Liberbank, which precisely affected the insurance business. The heir to the old Asturian savings banks had an alliance with an insurer other than Unicaja, so the new bank has agreed to sell these companies to Santalucía, its traditional partner, for 318 million euros. Of course, the Andalusian entity will now have to compensate Mapfre and Aegon, who were partners of Liberbank for this operation.
It is not the only alliance that Mapfre has lost in this reorganization process. The other, in fact, was much more significant economically and symbolically. The insurer was the historical partner of Caja Madrid, first, and of Bankia, later. She even became a shareholder of the entity before being rescued. When CaixaBank announced the takeover of Bankia, many eyes necessarily turned to Mapfre. CaixaBank has its own insurer and also has another alliance with Mutua Madrileña, so there was no room to maintain the agreement with Mapfre.
From that moment it became known that CaixaBank would have to end up compensating Mapfre to break the alliance with Bankia. The negotiations dragged on for months and it was not until the end of 2021 that an agreement was reached, with the intervention of an independent third party that mediated to set a price. Finally, it was 571 million that the Catalan entity had to pay to the insurer. Mapfre was not convinced by this figure and announced legal action against the bank to raise the final amount of the operation.
This same year there was another alliance between the main entities of the country. Bankinter, which last year separated its insurer Línea Directa and took it public, announced an agreement with Liberty Seguros for home and car insurance. The insurer keeps 50.01% of the company that encompasses this activity of the bank. These will be the insurances that are marketed exclusively in the entity chaired by María Dolores Dancausa. The bank maintains, in turn, its alliance with Mapfre in life insurance.
In these two years, since the pandemic began, another bank that has carried out a million-dollar operation has been BBVA. The entity reached an agreement with Allianz in 2020 to sell 50% plus one share of its non-life insurance subsidiary, except health insurance, for 274 million euros. The agreement contemplated another 100 million based on certain milestones. Thus, Allianz became the exclusive provider of this insurance to BBVA customers in Spain, both in the physical branch network and in the bank's app.
In 2021, the alliance between Banco Santander and Aegon was completed, an operation that had begun two years earlier. When Banco Santander took over Banco Popular after its collapse in 2017, the entity chaired by Ana Botín decided to reorganize the alliances that the old bank had, which also included the insurance business. Thus, she bought Allianz its stake in the insurance subsidiary with Popular and in 2020 formalized the new company, now controlled by Aegon. To take control, the insurer paid 187 million euros, with a variable that can reach another 74 million depending on the achievement of certain milestones. A year before the pandemic, it had sealed an agreement with Mapfre, for which the insurer paid 82 million euros to distribute its auto and business insurance in the Santander network.
The latest mortgage law, approved in 2019, prohibits the sale of linked products when a loan of this type is formalized. However, the banks have offered reductions in the interest rates of these credits if the life insurance to be formalized is done with the entity itself. Some voices, such as the consumer association Asufin, have drawn attention to this fact, since despite the reduction in the interest rate, it may end up being a more expensive operation for the client than if he agreed to insurance with an independent entity. Insurance belongs to the same business group as pension plans or investment fund management, which are the activities in which banking has grown the most and where it has focused its strategy to maintain the level of income in a context of low interest rates and low profitability on loans, especially mortgages.
The largest insurer in the country by volume of premiums belongs, in fact, to a bank. This is Vidacaixa, the company that manages most of CaixaBank's insurance business. According to ICEA statistics for the first quarter of the year, the insurance statistical center has a share of close to 15%. It is followed by Mapfre, which includes the businesses it has under its own brand and those it distributes in its agreements with Bankinter or Santander. It has just over an 11% share. Mutua Madrileña, a CaixaBank partner in SegurCaixa Adeslas, is the third entity in the country with 9%. Allianz and Catalana Occidente close the five main insurance groups by level of premiums.