Banking markets have experienced a general trend towards conglomeration in recent years, which has been facilitated by the deregulation of banks' activities. A particular feature of financial conglomeration has been the diversification of banks into insurance (especially life) activities--a phenomenon known as bancassurance. Many European banks have adopted bancassurance strategies but there has been little empirical evidence investigating the implications of this strategy for bank performance. This text aims to redress this imbalance by providing a comprehensive analysis of the development and market characteristics of the bancassurance phenomenon, as well as empirical evidence on the risk and return effects of bank diversification into the life insurance business.