HNB Assurance and SMIB linking together to expand bancassurance reach in Sri Lanka

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HNB Assurance PLC, the insurance arm of HNB, has entered into a strategic partnership with the State Mortgage and Investment Bank (SMIB). This collaboration aims to deliver tailored life insurance products to SMIB’s extensive customer base as a landmark partnership in bancassurance.


What is Bancassurance?


                             

                                                                                    Source : LinkedIn

A bank and an insurance company collaborate to offer insurance products or insurance benefits to the bank's customers. The bank will become the main point of contact for the customer for insurance needs.

The beginning of this partnership was in October 2024, when the two organisations signed the initial Memorandum of Understanding (MOU). They expect to integrate insurance solutions into SMIB’s product offerings. Their primary intention is focused on facilitating Decreasing Term Assurance (DTA), a type of life insurance where the payout reduces over time. It is mutually beneficial as customers now have access to financial protection that meets their requirements.

SMIB will benefit from HNB Assurance’s industry-leading expertise and diversify the protection products beyond its core banking services. Meanwhile, HNB Assurance can access new market segments with minimal incremental distribution cost. 

Impact on Sri Lanka’s Insurance Landscape


Insurance Penetration and Market Growth

Such partnerships will have a long-term impact on increasing insurance penetration in Sri Lanka. Bancassurance channels, especially through well-established banks like SMIB, can significantly increase the distribution of insurance products built on a basis of trust, distribution networks, and customer relationships.


Digitization of HNB Assurance Platform

In July 2025, HNB Assurance deployed a digital core system, replacing outdated legacy platforms. This innovative backbone will also support streamlining bancassurance operations, from quoting to policy issuance, and integrate more seamlessly with SMIB’s systems.

In conclusion, this strategic partnership is a growing convergence of banking and insurance. As banks like SMIB embed insurance offerings into their core services, insurance becomes increasingly integrated into the normal banking behaviour of consumers.

It will have broader implications for improving financial inclusion and access to financial security products. Financial markets will receive benefits from the synergy and economies of scale from such collaborations.


Written by - Yesara Wijeratne

Title of the original article - “ HNB Assurance and SMIB partner to expand bancassurance reach ”

Publication Date - 17.08.2025

Source - Daily FT

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