This paper aims to examine how financial conglomeration affects the overall efficiency of the financial industry and to propose strategies for financial institution conglomeration by conducting simulated mergers between banks and life insurance companies under the bancassurance model and analyzing cost, revenue, and profit efficiency before and after conglomeration. Changes in efficiency before and after conglomeration were measured using the thick frontier approach. The analysis results showed that for insurance companies, foreign insurance companies and small-to-medium-sized insurance companies could improve their cost and profit efficiency through bancassurance, although their revenue efficiency decreased. For large insurance companies, cost efficiency could be increased, but revenue and profit efficiency decreased. For banks, considering consumer awareness of insurance companies and product portfolio considerations, selecting large insurance companies as bancassurance partners was found to be desirable in terms of revenue and profit efficiency. However, when commercial banks chose small-to-medium-sized insurance companies as bancassurance partners, revenue efficiency increased while profit efficiency decreased.