bank assurance in india final 1

8/11/2019 Bank Assurance in India Final 1

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Bancassurance In India

INTRODUCTION OF INSURANCE IN INDIA

The Insurance sector in India governed by Insurance !ct, /036, the 7ife

Insurance &orporation !ct, /081 and -eneral Insurance Business ('ationalisation

!ct, /09", Insurance Regulatory and $evelopment !uthority (IR$! !ct, /000 and

other related !cts. :ith such a large population and the untapped market area of this

population Insurance happens to be a very big opportunity in India. Today it stands

as a business growing at the rate of /8;"# per cent annually. Together with banking

services, it adds about 9 per cent to the country


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HISTORY OF INSURANCE SECTOR

The business of life insurance in India in its e*isting form started in India in

the year /6/6 with the establishment of the )riental 7ife Insurance &ompany in

&alcutta. Some of the important milestones in the life insurance business in India are

given in the table /.

TABLE 1 MILESTONE!S IN THE LIFE INSURANCE BUSINESS

IN INDIA

Year Mile"to#e" i# the li$e i#"%ra#&e '%"i#e"" i# I#(ia

/0/" The Indian 7ife !ssurance &ompanies !ct enacted as the first statuteto regulate the life insurance business

/0"6 The Indian Insurance &ompanies !ct enacted to enable the

government to collect statistical information about both life and non;

life insurance businesses

/036 @arlier legislation consolidated and amended to by the Insurance !ct

with the obective of protecting the interests of the insuring public.

/081 "28 Indian and foreign insurers and provident societies taken over

by the central government and nationalised. 7I& formed by an !ct of

=arliament, vi. 7I& !ct, /081, with a capital contribution of Rs. 8crore from the -overnment of India.

The -eneral insurance business in India, on the other hand, can trace its roots

to the Triton Insurance &ompany 7td., the first general insurance company

established in the year /68# in &alcutta by the British. Some of the important

milestones in the general insurance business in India are given in the table ".

3


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TABLE ) MILESTONE!S IN THE *ENERAL INSURANCE

BUSINESS IN INDIA

Year Mile"to#e" i# the +e#eral i#"%ra#&e '%"i#e"" i# I#(ia

/0#9 The Indian ercantile Insurance 7td. set up, the first company to

transact all classes of general insurance business

/089 -eneral Insurance &ouncil, a wing of the Insurance !ssociation of

India, frames a code of conduct for ensuring fair conduct and sound

business practices

/016 The Insurance !ct amended to regulate investments and set

minimum solvency margins and the Tariff !dvisory &ommittee setup.

/09" The -eneral Insurance Business ('ationaliation !ct, /09"

nationalised the general insurance business in India with effect from

/st Aanuary /093.

/#9 insurers amalgamated and grouped into four companies vi. the

'ational Insurance &ompany 7td., the 'ew India !ssurance

&ompany 7td., the )riental Insurance &ompany 7td. and the nited

India Insurance &ompany 7td. -I& incorporated as a company.

2


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HISTORY OF BANCASSURANCE

!fter Cirst 'arasimham &ommittee report, Indian banking system gone

through huge reforms like merchant banking, lease and term finance, capital

market D e?uity market related activities, hire purchase, real estate finance and so on.

Cew years back banks of India entered into another financial instrument that by end of march;"##1 which was far less than world. It also indicates that a vast maority of population remain outside the reach

of the insurance, especially in rural and semi;urban areas, in the conte*t of the

absence of social security schemes.

In year "##2, due to these vulnerable statistics, IR$! introduced an additional

channel of distribution in way long traditional distribution model of Insuranceindustry called Bancassurance.

The prospects of bancassurance in India is really bright because of following

reasons+

Indian economy is growing with 0> of growth rate.

Increasing === (purchasing power parity.

%uge inflow of C$I.

@*pansion of middle income class Indians.

%uge banking infrastructure across urban, semi urban E rural India.

B!S@7 ')R;II ("##0

8


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DEFINITION

The sale of insuranceand other similar products through abank. This can

help the consumer in some situations4 for e*ample, when a bank re?uires lifeinsurance for those receiving a mortgage loan, the consumer could purchase the

insurance directlyfrom the bank. Some critics feel that bancassurance gives the bank

too much control. Bancassurance is not legal in all countries, but it is legal in the

nited States.

A#other rea"o#" are

BANK INSURANCE COM,ANY

&ustomer retention Revenue and channel

diversification

Satisfaction of more financial

needs under the same roof.

Fuality customer access

Revenue diversification Fuicker geographical reach

ore profitable resource

utiliation

&reation of brand e?uity

@nriched work environment 7everage service synergies with

Bank

@stablish sales orientated culture @stablish a low cost ac?uisition

channel

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BANCASSURANCE STRUCTURE

BANCASSURANCE MODEL

ost of the partnerships in India fall into the Fir"t Mo(el, where banks have

offered their services as distribution channels for insurance products through their

branch network. In terms of the present regulatory framework, Banks have taken up

a corporate agency for marketing insurance products for an agreed referral feeD

commission. The regulations provide for one bank tying up with only o#e life and

o#enon;life insurer, while insurers have the choice to tie;up with any number of

banks.

Cor the Se&o#( Mo(el, we have e*amples of SBI Li$eand ICICI ,r%(e#tial

where separate oint ventures were floated to make a foray into the life insurancebusiness as private sector players.

!s yet, there are no instances of the Thir( and Fo%rth Mo(el" in India.

There is also a need for the evolution of regulations to accommodate these two

models.

It can be seen that in the Indian conte*t most of the players on both sides have

opted for the Fir"t Mo(el, a decision, which is in a way ?uite prudent. !s banks are

averse to assume risk and long;term commitments, a tentative coming together, akin

to dating without any firm or long;term commitment on either side, rather than

plunging into a marriage alliance, which would be ?uite costly and cumbersome to

e*tricate oneself from, make business sense.

6

Di"tri'%tio#

Allia#&e

oi#t .e#t%re

Bet2ee# 'a#3

4 I#"%rer

Mer+er 'et2ee#

Ba#3

4 I#"%rer

B%il( or '%5

O2# i#"%ra#&e

O6eratio#


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BANCASSURANCE RE*ULATIONS IN INDIA

Bancassurance in India is a very new concept, but is fast gaining ground. In

India, the banking and insurance sectors are regulated by two different entities

(banking by RBI and insurance by IRDA and bancassurance being the

combinations of two sectors comes under the purview of both the regulators. @ach of

the regulators has given out detailed guidelines for banks getting into insurance

sector. %ighlights of the guidelines are reproduced below+

RBI *UIDELINES

RBI guideline for banks entering into insurance sector provides threeoptions for

banks. They are+

17 ! bank can form a 0oi#t 8e#t%re with an insurance company for doing

bancassurance business. There will be ri"3 6arti&i6atio# in this model, i.e.4

through oint venture the bank can underwrite or perform the principal function

of insurance.

)7 Cor banks, which are not eligible for this oint;venture option, an i#8e"tme#t

o6tio#of up to /#> of the net worth of the bank or Rs.8# crores, whichever is

lower, is available. The bank can invest in the insurance company to provide

infrastructure and service support.

97 Cinally, any commercial bank will be allowed to undertake insurance business

as a &or6orate a+e#tof insurance companies. This will be on a fee basis with

#o-ri"3 6arti&i6atio#.

0


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IRDA *UIDELINES

!s per the recommendations of the alhotra &ommittee on Reforms in the

Insurance Sector, the Insurance Regulatory E $evelopment !uthority (IR$! !ct

/000 was passed by Indian =arliament. IR$! is constituted to regulate, promote and

ensure orderly growth of insurance and reinsurance business. !ccording to IR$!, a

private sector participant has to fulfill the following criteria for entry into insurance

sector+

(a inimum paid;up capital of Rs./## crores

(b Investment in policyholders< funds only in India

(c Restriction of international companies to

minority e?uity holding of "1>

The I#"%ra#&e Re+%lator5 a#( De8elo6me#t A%thorit5 :IRDA; +%i(eli#e"$or the 'a#&a""%ra#&e are

1;Chie$ I#"%ra#&e E


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NEED AND SUCCESS OF BANCASSURANCE

In their natural and traditional roles and with their current skills, neither banks

nor insurance companies could effectively mount a bancassurance start;up alone.

Colla'oratio# i" the 3e5 to making this new channel work. The motive behind

bancassurance may differ from that of banker to that of an insurer.

NEED FOR BANKS

The motives behind banks selling insurance are >,ro(%&t Di8er"i$i&atio#!

and a source of >A((itio#al Fee-Ba"e( I#&ome!.

,ro(%&t Di8er"i$i&atio#Banks, without the e*ception of public sector banks

have become fle*ible, cost;conscious, competitive, customer;oriented and hi;

tech. Thanks to the innovations in the financial services, resulting in an

evolution of interconnected services, the movement towards O#e-Sto6

Fi#a#&ial S%6ermar3etis catching up. Banks today, are forced to offer wide

range of sophisticated products to their clients. The traditional products that the

banks offer are no longer sufficent, and there is an urgent need for product

diversification resulting in the need for Bancassurance.

A((itio#al Fee-Ba"e( I#&ome The opportunity to augment HFee-Ba"e(

I#&ome!is another alluring factor which has given impetus to the concept of

Bancassurance in India.

It is no longer possible for any financial Institution operating in global;sied

market to survive without additional sources of revenues. Banks today are finding

it hard to make money. @arlier banks used to make money from the interest

income4 mainly from the difference in interest rates on what they charged on

advances and those they paid on deposits. The net margin used to be the biggest

contributor to their bottom;line. -rowing market competition, however is weighing

down heavily on bank


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NEED FOR INSURER

Cor insurance company it acts as a tool for increasing their Mar3et ,e#etratio#

and ,remi%m T%r#o8erJ

Sti$$ Com6etitio# !t present there are /8 life insurers and /2 general

insurers in India. The 7iberaliation of the economy resulted in the entry of a

number of private companies into the battlefield resulting in an urgent need to

outwit one another. @ven the 26;year old 7I& started feeling the heat of

competition. %ence to outwit each other and to stay a step ahead there was a

need for a new strategy in the form of Bancassurance.

Hi+h Co"t o$ A+e#t" Insurers have been turning in great numbers to

alternative modes of distribution because of the high costs they have paid for

agency services. These costs became too much of a burden for many insurers

compared to the returns they generate. %ence there was a need felt for

bancassurance as a Co"t-E$$e&ti8e Di"tri'%tio# channel.

R%ral ,e#etratio# Insurance industry has not been much successful in rural

penetration so far. %owever, Bancassurance could help bridge this gap. The

e*isting wide network of banks in rural areas can be utilised for selling

insurance products. %ence, there was need for bancassurance.

M%lti-Cha##el Di"tri'%tio# Insurers today are trying to gain entry into the

market through various distribution channels. !part from the traditional

agents, there was a need for a 2ell-'ala#&e(, alternative distribution channel.

Insurers started leveraging on multi;channel distribution. !nd, hence aroused

the need for Bancassurance in order to make the most of India5s large

population base and reach out to a worthwhile number of customers.

Tar+eti#+ Mi((le-I#&ome C%"tomer" )ver the last decade, life insurance

agents have sold fewer and larger policies to a more upscale client base.iddle;income customers, who comprise the '%l3 o$ 'a#3 &%"tomer", get

little attention from most life agents. By capitaliing on bank relationships,

insurers will recapture much of this under served market. %ence, to capture

the large database of bank


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BANCASSURANCE .ENTURES MUST HA.E CLEAR

OBECTI.ES

I#"%rer" Ba#3"

Be ali+#e( 2ith +oo( ,e#etrate &lie#t 'a"e

,%'li& ima+e o$ 'a#3 F%rther 2ith more 6ro(%&t"

For+e relatio#"hi6 Le8era+e 6o"iti8e ima+e

Earlier i# &%"tomer!" li$e I#&rea"e &%"tomer lo5alt5

Lo2er a&?%i"itio# &o"t"

C%"tomer"

B%5 lo2er-&o"t" 6ro(%&t"

B%5 more 6ro(%&t" $rom a Si#+le "o%r&e

*et 'etter@ more e$$i&ie#t Ser8i&e

/3


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BENEFITS OF BANCASSURNCE

Bancassurance is an important tool in the hands of Bankers, Insurers and

&ustomers to ma*imie their benefits at the same time, as everybody is a winner in

this system.

The Ba#&a""%ra#&e Co#&e6t I" So /ell De"i+#e( That@

HEAD BANK /INS TAIL INSURER /INS

!nd If The &oin %ad ! Third Side Truly :e &an Say That The C%"tomer Al"o/i#"7 Thus, it is /i#-/i#situation for all.

Th%"@ The Be#e$it" O$ Ba#&a""%ra#&e Ca# Be Co#"i(ere( From The Follo2i#+

,oi#t O$ .ie2

17 Benefit To Banks

)7 Benefit To Insurers

97 Benefit To &ustomers.

/2


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BENEFITS TO BANKS

There Are Si+#i$i&a#t A(8a#ta+e" To Ba#3" ,arti&%larl5 I# The Li+ht

O$ The Cha#+i#+ I#tere"t S&e#ario O$ Ba#3i#+ I# I#(ia7 The5 Are

Fee-Ba"e( I#&ome Cor banks, Bancassurance would mean a maor gain.

Since interest rates have been falling and profit on off take of credit has been

low, all banks have been able to do is sustain themselves but not profit much.

%ence the banks today have shifted their focus from F%#(-'a"e( revenue

(loans E advances to Fee-'a"e(income. @nter bancassurance and fee based

income through hawking of risk products would be guaranteed, thus giving an

additional boost to the banks bottom line. E K /6 cr accounts L Rs./3,8## cr in commission

I#&rea"e( Ret%r# O# A""et" :ROA; )ne of the ways to increase R)!,

assuming a constant asset base, is through fee income. Banks that build fee

income can cover more of their operating e*penses. The sale of insurance

products builds fee income. Banks that effectively cross;sell financialproducts can leverage their distribution and processing capabilities for

profitable operating e*pense ratios.

I#&rea"e" Sta$$ ,ro(%&ti8it5 Bancassurance gives an opportunity to the

bank staff to harness their sales skills and adapt to the changing business

environment. Selling of insurance products provides bank employees with

new challenges and enhanced skills thus improving their productivity and

efficiency.

,ro$ita'ilit5 Bancassurance provides financial benefits in the form of

commissions, profits from new business, bank


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E#ha#&e" C%"tomer Relatio#"hi6 Bancassurance results in high customer

relationship with the bank by providing more services. It seeks C%"tomer

Lo5alt5 by offering satisfactory and e*panded base for services. Selling

whole range of financial services to clients increases C%"tomer Rete#tio#7

Creati#+ A U#i8er"al Ba#3i#+ ,lat$orm + Bancassurance offers a good

opportunity to increase the bank


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E


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,ro8i(e" Com6etiti8e A(8a#ta+e =rovides &om6etiti8e A(8a#ta+e over

the non;bancassurers. %aving been accustomed to the customer


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BENEFITS TO CUSTOMERS

A8aila'ilit5 O$ A Com6lete ,a&3a+e &ombined bank and insurance

products will find Com6lete Sol%tio# to the customers7 Banks and Insurance

companies are converging towards a model of global retail financialinstitution offering a wide array of products. It leads to the creation of O#e-

Sto6 Sho6where a customer can apply for mortgages, pensions, savings and

insurance products.

Re(%&e( Co"t" + Bancassurance gives the insurance company the benefit of

cost;effective distribution channel, the benefit ultimately passing on to the

customers in way of reduced premiums. The customer gains as the costs are

reduced.

*oo( %alit5 ,ro(%&t =roduct innovation and distribution activities are

directed towards the satisfaction of the needs of the customer. Since banks

can understand the needs of the customers in a better way, the customer gets a

good ?uality product. !lso, he gets the advantage of a &%"tomie(product as

per his need and re?uirements.

Time Sa8i#+" 4 Co#8e#ie#&e The customers can get risk coverage at bank

itself which saves time and adds to the customer


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BANCASSURANCE A S/OT ANALYSIS

Banking and Insurance are very different businesses. The latter has a

greater risk and hence is a more capitalied one. oreover, the two have

different time horions, with life insurance in particular, focusing on thelong run. !lso Bankers and Insurers come from diametrically opposite

work cultures where the former are accustomed to ,%ll type of

environment; meaning dealing with walk in customers, the latter are

trained to go out and solicit customers; the so;called ,%"hmarketing

techni?ue.

%owever. @very coin has two sidesM similarly4 Bancassurance

enables banks and insurance companies to complement each other


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STREN*THS

Ba#&a""%ra#&e S&ore" O8er The Other I#"%ra#&e Di"tri'%tio# Cha##el"

O# A&&o%#t O$ The Follo2i#+ Rea"o#"

Banks have&re(i'ilit5 established and enoy a wide network of branches evenin remotest areas.

Banks enoy 6ri(e o$ 6la&e in the hearts of people because of their long

presence and sustained image.

Banks understand r%ral 6"5&holo+5because of their incessant interaction with

the public and fle*ibility of approach.

Inspite of the hype created regarding total branch mechaniation (TB andfull computeriation of branches, this is mostly in metro and urban centers. The

rural and semi;urban branches still function using traditional ma#%al

o6eratio#systems.

The bankers have a branch network to make $a&t to $a&e &o#ta&t with the

customers and a great deal of trust over the customers.

Indian banks have built fairly intimate ties with customers by effectively

leveraging the Indian propensity of tr%"t i# 'a#3i#+. Such customer bases

offer an e*citing opportunity of reaching potential life insurance buyers atrelati8el5 lo2 &o"t7

!s banks understand customer


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O,,ORTUNITIES

!lthough banks and insurance companies are yet to e*change their wedding

rings, Bancassurance is already in some form in India. Banks are selling personal

accident and baggage insurance for its credit card members, issued mortgage linked

insurance products like fire, motor or cattle insurance to their customers and

establishing face to face relationship with their customers by leveraging their

e*isting capabilities.

The O66ort%#itie" For Ba#&a""%ra#&e Ca# Be Di"&%""e( A" Belo2

In a country of 1 Billio# 6eo6le, sky is the limit for insurance products. !fter

discounting the population below poverty line the middle market segment is the

second largest in the world after &hina. The insurance companies worldwide

are eyeing on this, why not tap this market ourselves.

There is a vast untapped potential waiting to be mined particularly for li$e

i#"%ra#&e 6ro(%&t". There are more than Gillion lives waiting to be given

a life cover.

There are about ) illion households waiting to be approached for a

ho%"ehol(er" i#"%ra#&epolicy.

illions of people traveling in and out of India can be tapped for O8er"ea"

Me(i&laimand Tra8el I#"%ra#&epolicies.

In urban and metro areas, where affluent customers clamor for many services

like lockers and safe deposit systems, there is a good opportunity to market

many property related general insurance policies like $ire i#"%ra#&e@ '%r+lar5

i#"%ra#&e a#( me(i-&are i#"%ra#&e.

&ommercial entities and corporates enoying various banking facilities may be

advised to opt for >Ke5 ,er"o#!insurance to cover their downside risk.

Banks in their normal course of functions lend finance in the form of loans for

cars, or for buying a house to clients. They can &ro"" "ell insurance products

and combine it as a package.

"3


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THREATS

No#-Re"6o#"e From The Tar+et *ro%6" !nother possible threat may

come from non;response from the target customers. This happened in USAin

1G"after the enactment of St -ermaine !ct. ! rush of oint ventures took

place between banks and insurance companies and all these failed due to the

non;response from the target customers.

H%ma# Re"o%r&e Challe#+e" Success in bancassurance venture re?uires a

change in mindset. Though we have a large talent pool, the inability to sell

comple* insurance products on the part of bank professionals and their

reluctance to learn can be severe setback. There has to be a change in the

thinking, approach and work culture.

I#ter$ere#&e /ith Ba#3!" ,ro(%&t" Insurance in India is perceived more asa "a8i#+" o6tio#than providing risk cover. %ence, there is a feeling among

bank employees that it could eat into the sales of regular bank saving

products. !lso, selling of investment cum risk oriented products through

banks may adversely affect the FD 6ort$olioof the bank.

O66o"i#+ Ri"3 Ma#a+eme#t C%lt%re" The downside of mi*ing banking

and insurance activities is likely to result in a clash between opposing risk

management cultures i.e. in banking, risk management is dominated by

concerns about asset ?uality, while the principal source of concern ininsurance is behavior of liabilities. -iven such different management

approaches, coming together of banking and insurance may increase

operational risk at both the establishments.

Re6%tatio#al Co#ta+io# There would be a problem of Re6%tatio#al

Co#ta+io#! i.e. loss of market confidence towards one in a conglomerate

leading to loss of confidence on the other because of identical brand

recognition, similar management and consolidated financial reporting etc.

"8


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INDIAN SCENARIO

Immediately after the opening up of the Indian insurance sector from the

hold of the government insurance companies, the activity has fueled up. :hat

remained as a strong hold for the government owned insurance companies is

immediately under threat. In less than one year, private insurance companies are

eager to board the bandwagon of Bancassurance. @yeing the lucrative market of

insurance in India maority of banks from both public and private sector are forming

alliances with either the sector insurance companies or with new private insurers to

take advantage of huge untapped potential.

Some O$ The Ba#&a""%ra#&e Tie-%6" i# I#(ia Are

LIFE INSURANCE

COM,ANY

BANKIN* ,ARTNER

%$C& Standard 7ife Insurance &o. 7td. nion Bank )f India, Indian Bank, %$C&

Bank.

I&I&I =rudential 7ife Insurance &o 7td. 7ord Orishna Bank, I&I&I Bank, Bank of

India, &itibank, !llahabad Bank, Cederal

Bank, South Indian Bank, and =unab and

aharashtra &o;operative Bank

Birla Sun 7ife Insurance &o. 7td. Bank of Raasthan, !ndhra Bank, Bank of

uscat, $evelopment &redit Bank,

$eutsche Bank and &atholic Syrian Bank,

Oarur Nysya Bank 7td

SBI 7ife et 7ife India Insurance &o.

7td.

SBI, B'= =aribas

Oarnataka Bank, $hanalakshmi Bank and

AEO Bank

!NIN! life Insurance &anara Bank, 7akshmi Nilas Bank,

!merican @*press Bank and !B' !R)

Bank

"9


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NON-LIFE INSURANCE

COM,ANY

BANKIN* ,ARTNER

Baa !llian -eneral Insurance &o.

7td.

Oarur Nysya Bank and 7ord Orishna Bank,

=unab E Sind Bank

'ational Insurance &o. 7td. &ity nion Bank, Niaya Bank

Royal Sundaram -eneral Insurance

&ompany

Standard &hartered Bank, !B' !R)

Bank, &itibank, !me* and Repco Bank.

nited India Insurance &o. 7td. South Indian Bank, =unab 'ational Bank,!ndhra Bank, $hanalakshmi Bank, Indian

Bank

'ew India !ssurance &o 7td. nion Bank )f India, SBI, &orporation

Bank, and nited :estern Bank.

"6


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THE FUTURE OF BANCASSURANCE

!lthough Bancassurance ventures in 7atin !merica and !sia have

followed different paths, they share the same obectives and re?uirements

for success. !ll recognie the value of the bank


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SCO,E FOR BANCASSURANCE IN INDIA

By now, it has become clear that as economy grows it not only

demands stronger and lively financial sector but also necessitates to

provide with more sophisticated and variety of financial and bankingproducts and services. Orueger ("##2 pointed out that the history of the

'orth !merica is a case in reference of one of financial growth and

deepening in tandem with economic growth. !s India is being considered

one of the developing countries among the @merging market economies,

financial sector has also developed much vibrant with the financial

reforms.

Significantly, Indian financial system has recorded an average

growth of over 6.8 per cent for the last four years, with macroeconomic

and financial stability (RBI, "##1 and indications are that it may grow

at even improved rate in the near future provided there is good

monsoon. @*perience also showed that economic growth had

powerfully supported the e*pansion of middle income class in most of

the !sian countries, and now it is the turn of India. @*perience reveals

that at the early growing stage of the economy the primary financial

needs are met by the banking system and thereafter as the economy

moves on to advanced pedestal, the need for the other non;bankingfinancial products including insurance, derivatives, etc., were strongly

felt. oreover, as India has already more than "## million middle class

populations coupled with vast banking network with largest depositor


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UESTIONNAIRS

:1; /HAT IS BANCASSURANCEJ

A#"7 Bancassurance is the distribution of insurance products through a bank5s own

distribution channels. Bancassurance offers convenience, risk diversion and financial

advisory services with the availability of different product ranges for its bank clientsaccording to their needs.

:); HO/ DOES BANCASSURANCE /ORKJ

A#"7 The success of Bancassurance has been limited to life insurance mostly,

primarily because of the matching of banking products with the personal financial

needs of individuals and families.

:9; /HAT ARE THE CHALLEN*ES FACE BY THE BANKSJ

A#"7 =rivate sector insurance firms are finding Hchange management< in the publicsector, a maor challenge.

:=; /HAT ARE THE ,RODUCT OFFERS BY BANKJ

A#"7 =roduct offered by bank are as follows+

(/SBI 7ife Q nit =lus &hild =lan

("SBI 7ife Q 7ifelong pensions

(3SBI 7ife Q Swadhan

(2SBI 7ife Q !nnuity

:; /HAT IS THE MAIN MOTI.E OF ,OLICYHOLDRS FOR TAKIN* ANINSURANCE ,OLICYJ

A#"7 There was mi*ed response from the customer. The reason like saving ,

security, brand image of bank, brand image of insurance.

:; DO YOU THINK BANCASSURANCE HAS A *OOD FUTUREJ

A#"7 es. Bancassurance has a good future because there is an immense potential

for the insurance industry in India.

:; /HY SHOULD BANKS ENTER INSURANCEJ

A#"7 There are several reasons why banks should seriously considerBancassurance, the most important of which is increasedRet%r# o# A""et" :ROA;.

)ne of the best ways to increase R)!, assuming a constant asset base, is through

fee income. Banks that effectively &ro""-"ell $i#a#&ial 6ro(%&t"can leverage their

distribution and processing capabilities for profitable operating e*pense ratios.

3/


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CONCLUSION

In India the bancassurance model is still in its #a"&e#t "ta+e", but

the tremendous growth and acceptability in the last three years reflects

+ree# 6a"t%re i# $%t%re7 :ith almost half of the population likely to bein the 2a+e ear#er 'ra&3et '5 )1, there is every reason to be

o6timi"ti&that bancassurance in India will play a long inning.

$uring the proect, I came to know the role that Bancassurance

plays in the Banking E Insurance sector. Before I started this proect, I

only had a brief idea of this concept, but during my proect due to

interaction with several Bankers and Insurers, I realied what this concept

actually meant. !lso interaction with several customers made me realiethe present position of Bancassurance. . I can now firmly and proudly say

that every obective that I had laid in mind for this =roect is met to its

fullest e*tent.

I am also confident that though Bancassurance is not being utilied

to its full potential, it surely has a bright future. :e are at the threshold of

a significant change in the way insurance in the country is poised to be in

the days to come and we would be catalysts of this change, as Insurance

Sector will take greater leaps in near future. Bancassurance will definitely

play a defining role as an alternative distribution channel and will &ha#+e

the 2a5 i#"%ra#&e i" "ol( i# I#(ia. Riding the wave of convergence,

banks will ideally be positioned to capture consumer data and hence,

provide the best of services to the customers.

The bridge has been reached and many are beginning to walk those

cautious steps across it. Bancassurance in India has ust taken a flying

start. It has a long way to goMM after all The SKY IS THE LIMIT

3"


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BIBLIO*RA,HY

2227ir(a7&om

2227h($&i#"%ra#&e7&om

I#"%ra#&e C%"tomer Ser8i&e K7B7S K%mar7

bank assurance in india final 1

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