Bancassurance and its dangers: the Hispano-Estrella case, 1901-1993

Abstract

Bancassurance is understood as the relationship between a bank and an insurance company that decide to support each other by the fact that both carried out financial activities. It is a very important phenomenon in the Spanish financial history, where banks have dominated the scene with the formation of large groups with subsidiaries in the industry and the financial services. The bank-industry relationship has earned much attention, but the bancassurance relationship has never been studied in depth. This work analyzes, with archival sources, the Hispano-Estrella case, i.e., the relationship established between the Banco Hispano Americano, which led its ranking for many years, and La Estrella, an insurance company that at times was second in its ranking. This study of a relevant and protracted (more than 90 years) case and helps to understand how the bancassurance limited the development of the Spanish insurance, because the strategy of the bank (the strong partner) always tended to be imposed on that of the insurance company (the weak partner).