The new Discovery Bank may be hoping to shake up the financial services sector by turning the insurer into a one-stop shop, but the bancassurance model, in which insurers and banks cross-sell products, has met with limited success in the South African market. While there have been good stories, with the Old Mutual and Nedbank partnership often held up as one such, there are few alliances between banks and insurers that have proved to be wildly successful. Instead, many companies that have ventured into bancassurance have found the capital risks dampen the operational benefits - a burden felt beyond local borders and one that, some might argue, may see the model die a slow death. According to Jaap Meijer, an analyst at Arqaam Capital, bancassurance groups in Europe did not cope well in the 2008-09 financial crisis, with both banking and insurance arms hit by losses on equity investments and impairments on their credit books. "The global trend is moving towards a separation of the two...

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