Escolar Documentos
Profissional Documentos
Cultura Documentos
CE
Executive Summary
This has given rise to a new form of business wherein two big financial
institutions have come together and have integrated all their strength and efforts and
have created a new means of marketing and promoting their products and services. On
one hand it is the Banking sector which is very competitive and on the other hand is
Insurance sector which has a lot of potential for growth. When these two join
together, it gives birth to BANCASSURANCE.
Taking all these things into consideration I would like to present my project
“BANCASSURANCE (an emerging concept in India). The project flashes some light
on Bancassurance and how it is perceived by people in India. It deals with the
conceptual part of Bancassurance as well as its practical applications in India.
The Indian as well as Global contexts both are taken into account. The
project also revolves around data, facts and figures that are necessary to prove the
importance of Bancassurance.
Further the project also includes the case study of SBI Life Insurance
Company, its various products, the growth they have experienced since the opening
up of a wholly owned subsidiary of SBI Bank that sells insurance products.
A survey analysis has also been done so as to know the popularity and the
growth perspectives of Bancassurance. The survey tries to identify whether the
conditions are favourable for it India or not. At the end some suggestions are also
given to fill the potholes that still exist in this system.
This project is just a gist about how the Globalization, Liberalization and
tough Competition have brought the Banking as well as the Insurance Industries
together to help each other and to provide excellent services to the customers.
1
BANCASSURAN
CE
Chapter 1
1. Definition
2. History
1. Definition
2. History
2
BANCASSURAN
CE
Introduction to Banking
“accepting for the purpose of lending of deposits of money from the public
for the purpose of lending or investment, repayable on demand through cheques,
drafts or order.”
The development of the Indian banking sector has been accompanied by the
introduction of new norms. New services are the order of the day, in order to stay
ahead in the rat race. Banks are now foraying into net banking, securities, and
consumer finance, housing finance, treasury market, merchant banking etc.They are
trying to provide every kind of service which can satisfy or rather we should say that
it can delight the customers.
3
BANCASSURAN
CE
The Insurance Act, 1938 was the first legislation governing all forms of
insurance to provide strict state control over insurance business.Today there are 14
general insurance companies and 14 life insurance companies operating in the
country. But today also the insurance companies are trying to capture Indian markets
as not many people are aware of it.
The insurance sector is a colossal one and is growing at a speedy rate of 15-
20%. Together with banking services, insurance services add about 7% to the
country’s GDP. A well-developed and evolved insurance sector is a boon for
economic development as it provides long- term funds for infrastructure development
at the same time strengthening the risk taking ability of the country.
4
BANCASSURAN
CE
Chapter 2
About Bancassurance
1. Meaning
2. Origin
3. Models of Bancassurance
i. Structural classification
What is BANCASSURANCE?
With the opening up of the insurance sector and with so many players
entering the Indian insurance industry, it is required by the insurance companies to
come up with innovative products, create more consumer awareness about their
products and offer them at a competitive price. Since the banking services, insurance
and fund management are all interrelated activities and have inherent synergies,
selling of insurance by banks would be mutually beneficial for banks and insurance
companies. With these developments and increased pressures in combating
competition, companies are forced to come up with innovative techniques to market
their products and services. At this juncture, banking sector with it's far and wide
5
BANCASSURAN
CE
reach, was thought of as a potential distribution channel, useful for the insurance
companies. This union of the two sectors is what is known as Bancassurance.
Meaning
Origin
The banks taking over insurance is particularly well-documented with reference to the
experience in Europe. Across Europe in countries like Spain and UK, banks started
the process of selling life insurance decades ago and customers found the concept
appealing for various reasons.
Germany took the lead and it was called “ALLFINANZ”. The system of
bancassurance was well received in Europe. France taking the lead, followed by
Germany, UK, Spain etc. In USA the practice was late to start (in 90s). It is also
developing in Canada, Mexico, and Australia.
In India, the concept of Bancassurance is very new. With the liberalization and
deregulation of the insurance industry, bancassurance evolved in India around 2002.
6
BANCASSURAN
CE
Models of Bancassurance
I. Structural Classification
a) Referral Model
Banks intending not to take risk could adopt ‘referral model’ wherein they
merely part with their client data base for business lead of commission. The actual
transaction with the prospective client in referral model is done by the staff of the
insurance company either at the premises of the ban0k or elsewhere. Referral model is
nothing but a simple arrangement, wherein the bank, while controlling access to the
clients data base, parts with only the business leads to the agents/ sales staff of
insurance company for a ‘referral fee’ or commission for every business lead that was
passed on. In fact a number of banks in India have already resorted to this strategy to
begin with. This model would be suitable for almost all types of banks including the
RRBs /cooperative banks and even cooperative societies both in rural and urban.
There is greater scope in the medium term for this model. For, banks to begin with
can resort to this model and then move on to the other models.
b) Corporate Agency
7
BANCASSURAN
CE
incentives in the banks coupled with selling of simple insurance products in the initial
stage. This model is best suited for majority of banks including some major urban
cooperative banks because neither there is sharing of risk nor does it require huge
investment in the form of infrastructure and yet could be a good source of income.
This model of bancassurance worked well in the US, because consumers generally
prefer to purchase policies through broker banks that offer a wide range of products
from competing insurers.
Apart from the above two, the fully integrated financial service involves
much more comprehensive and intricate relationship between insurer and bank, where
the bank functions as fully universal in its operation and selling of insurance products
is just one more function within. This includes banks having wholly owned insurance
subsidiaries with or without foreign participation. The great advantage of this strategy
being that the bank could make use of its full potential to reap the benefit of synergy
and therefore the economies of scope. This may be suitable to relatively larger banks
with sound financials and has better infrastructure. As per the extant regulation of
insurance sector the foreign insurance company could enter the Indian insurance
market only in the form of joint venture, therefore, this type of bancassurance seems
to have emerged out of necessity in India to an extent. There is great scope for further
growth both in life and non-life insurance segments as GOI is reported have been
actively considering to increase the FDI’s participation up to 49 per cent.
8
BANCASSURAN
CE
products without any additional efforts. In most times, giving insurance cover at a
nominal premium/ fee or sometimes without explicit premium does act as an added
attraction to sell the bank’s own products, e.g., credit card, housing loans, education
loans, etc. Many banks in India, in recent years, has been aggressively marketing
credit and debit card business, whereas the cardholders get the ‘insurance cover’ for a
nominal fee or (implicitly included in the annual fee) free from explicit charges/
premium. Similarly the home loans / vehicle loans, etc., have also been packaged with
the insurance cover as an additional incentive.
There is also another method called 'Bank Referral'. Here the banks do not
issue the policies; they only give the database to the insurance companies. The
companies issue the policies and pay the commission to them. That is called referral
basis. In this method also there is a win-win situation every where as the banks get
commission, the insurance companies get databases of the customers and the
customers get the benefits.
9
BANCASSURAN
CE
Chapter 3
Utilities of Bancassurance
1. For Banks:
i. As a source of fee based income
ii. Product diversification
iii. Building close relations with the customers
i. Stiff competition
ii. High cost of agents
iii. Rural penetration
iv. Multi-channel distribution
v. Targeting middle income customers
10
BANCASSURAN
CE
For Banks
11
BANCASSURAN
CE
been fairly predictable. However shrinking interest rate, growing competition and
increased horizontal mobility of customers have forced bankers to look elsewhere to
compensate for the declining profit margins and Bancassurance has come in handy for
them. Fee income from the distribution of insurance products has opened new
horizons for the banks and they seem to love it.
Product Diversification
12
BANCASSURAN
CE
bancassurance brings about in banks is development of sales culture in their
employees. Also, banking in India is mainly done in the 'brick and mortar' model,
which means that most of the customers still walk into the bank branches. This
enables the bank staff to have a personal contact with their customers. In a typical
Bancassurance model, the consumer will have access to a wider product mix - a rather
comprehensive financial services package, encompassing banking and insurance
products.
Stiff Competition
13
BANCASSURAN
CE
Rural Penetration
Now a days the insurance companies are trying to exploit each and every
way to sell the insurance products. For this they are using various distribution
channels. The insurance is sold through agents, brokers through subsidiaries etc.
In order to make the most out of India’s large population base and reach out to a
worthwhile number of customers there was a need for Bancassurance as a
distribution model.
In previous there was lack of awareness about insurance. The agents sold
insurance policies to a more upscale client base. The middle income group people
got very less attention from the agents. So through the venture with banks, the
insurance companies can recapture much of the under served market. So in order
to utilize the database of the bank’s middle income customers, there was a need
felt for Bancassurance.
14
BANCASSURAN
CE
Chapter 4
15
BANCASSURAN
CE
16
BANCASSURAN
CE
1 Any scheduled commercial bank would be permitted to undertake insurance
business as agent of insurance companies on fee basis. Without any risk
participation
2. Banks which satisfy the eligibility criteria given below will be permitted to set up a
joint venture company for undertaking insurance business with risk participation,
subject to safeguards. The maximum equity contribution such a bank can hold in the
Joint Venture Company will normally be 50% of the paid up capital of the insurance
company.
3. In cases where a foreign partner contributes 26% of the equity with the approval of
Insurance Regulatory and Development Authority/Foreign Investment Promotion
Board, more than one public sector bank or private sector bank may be allowed to
participate in the equity of the insurance joint venture. As such participants will also
assume insurance risk, only those banks which satisfy the criteria given in paragraph 2
above, would be eligible.
4. A subsidiary of a bank or of another bank will not normally be allowed to join the
insurance company on risk participation basis.
5. Banks which are not eligible for ‘joint venture’ participant as above, can make
investments up to 10% of the net worth of the bank or Rs.50 crore, whichever is
lower, in the insurance company for providing infrastructure and services support.
Such participation shall be treated as an investment and should be without any
contingent liability for the bank.
6. All banks entering into insurance business will be required to obtain prior
approval of the Reserve Bank. The Reserve Bank will give permission to banks on
case to case basis keeping in view all relevant factors including the position in regard
17
BANCASSURAN
CE
to the level of non-performing assets of the applicant bank so as to ensure that non-
performing assets do not pose any future threat to the bank in its present or the
proposed line of activity, viz., insurance business. It should be ensured that risks
involved in insurance business do not get transferred to the bank. There should be
‘arms length’ relationship between the bank and the insurance outfit.
8. Latest audited balance sheet will be considered for reckoning the eligibility criteria.
The Insurance regulatory development & Authority has given certain guidelines for
the Bancassurance they are as follows: -
1) Chief Insurance Executive: Each bank that sells insurance must have a chief
Insurance Executive to handle all the insurance matters & activities.
18
BANCASSURAN
CE
2) Mandatory Training: All the people involved in selling the insurance should
under-go mandatory training at an institute determined (authorized) by IRDA & pass
the examination conducted by the authority.
Issues for regulation: Certain regulatory barriers have slowed the development of
Bancassurance in India down. Which have only recently been cleared with the
passage of the insurance (amendment) Act 2002. Prior it was clearly an impractical
necessity and had held up the implementation of Bancassurance in the country. As
the current legislation places the following:-
(2) Specified person to satisfy the training & examination: According to new
regulation of IRDA only the specific persons have to satisfy the training &
examination requirement as insurance agent.
Chapter 5
Benefits of Bancassurance
19
BANCASSURAN
CE
1. To Banks
2. To Insurance companies
3. To Customers
To Banks
(A)By selling the insurance product by their own channel the banker can increase
their income.
(B) Banks have face-to-face contract with their customers. They can directly ask
them to take a policy. And the banks need not to go any where for customers.
(C) The Bankers have extensive experience in marketing. They can easily attract
customers & non-customers because the customer & non-customers also bank on
banks.
(D) Banks are using different value added services life-E. Banking tele banking,
direct mail & so on they can also use all the above-mentioned facility for
Bankassurance purpose with customers & non-customers.
(F) By providing customers with both the services under one roof, they can
improve overall customer satisfaction resulting in higher customer retention
levels.
(G) Increase in return on assets by building fee income through the sale of
insurance products.
(H) Can leverage on face-to-face contacts and awareness about the financial
conditions of customers to sell insurance products.
(I) Banks can cross sell insurance products E.g.: Term insurance products with
loans.
20
BANCASSURAN
CE
To Insurers
(A) The Insurance Company can increase their business through the banking
distribution channels because the banks have so many customers.
(B) By cutting cost Insurers can serve better to customers in terms lower premium rate
and better risk coverage through product diversification.
(C)Insurers can exploit the banks' wide network of branches for distribution of
products. The penetration of banks' branches into the rural areas can be utilized to sell
products in those areas.
(E)Since banks have already established relationship with customers, conversion ratio
of leads to sales is likely to be high. Further service aspect can also be tackled easily.
(F)The insurance companies can also get access to ATM’s and other technology being
used by the banks.
(H) The product can be customized as per the needs of the customers.
To Customers
21
BANCASSURAN
CE
From the customers' point of view:
(A) Product innovation and distribution activities are directed towards the
satisfaction of needs of the customer.
(D) Easy access for claims, as banks are a regular visiting place for customers.
(E) Innovative and better product ranges and products designed as per the needs of
customers.
(G) Customers could also get a share in the cost savings in the form of
reduced premium rate because of economies of scope, besides getting
better financial counseling at single point.
Chapter 6
22
BANCASSURAN
CE
Distribution Channels:
1. Career agents
2. Special advisers
3. Salaried agents
4. Bank employees
6. Direct response
7. Internet
8. E- Brokerage
Distribution Channels
Career Agents:
23
BANCASSURAN
CE
Career Agents are full-time commissioned sales personnel holding an
agency contract. They are generally considered to be independent contractors.
Consequently an insurance company can exercise control only over the activities of
the agent which are specified in the contract. Many bancassurers, however avoid this
channel, believing that agents might oversell out of their interest in quantity and not
quality. Such problems with career agents usually arise, not due to the nature of this
channel, but rather due to the use of improperly designed remuneration and incentive
packages.
Special Advisers:
Salaried Agents:
Salaried Agents are an advantage for the bancassurers because they are
under the control and supervision of bancassurers. These agents share the mission
and objectives of the bancassurers. These are similar to career agents, the only
difference is in terms of their remuneration is that they are paid on a salary basis
and career agents receive incentive compensation based on their sales.
Platform Bankers are bank employees who spot the leads in the banks
and gently suggest the customer to walk over and speak with appropriate
representative within the bank. The platform banker may be a teller or a personal
loan assistant. A restriction on the effectiveness of bank employees in generating
insurance business is that they have a limited target market, i.e. those customers
who actually visit the branch during the opening hours.
24
BANCASSURAN
CE
There are a number of banks who cooperate with independent agencies or
brokerage firms while some other banks have found corporate agencies. The
advantage of such arrangements is the availability of specialists needed for
complex insurance matters and through these arrangements the customers get
good quality of services.
Direct Response:
Internet:
E-Brokerage:
25
BANCASSURAN
CE
Banks can open or acquire an e-Brokerage arm and sell insurance
products from multiple insurers. The changed legislative climate across the world
should help migration of bancassurance in this direction. The advantage of this
medium is scale of operation, strong brands, easy distribution and excellent
synergy with the internet capabilities.
26
BANCASSURAN
CE
Chapter 7
Products offered
27
BANCASSURAN
CE
Established on 14th August 2000, HDFC Standard Life Insurance Co. Ltd. is a
joint venture between Housing Development Finance Corporation Limited (HDFC
Limited) - India's leading housing finance institution, and a Group Company of the
Standard Life Plc, UK. The Company is one of leading private insurance companies,
offering a range of individual and group insurance solutions, in India. Being a joint
venture of top financial services groups, HDFC Standard Life has adequate financial
expertise to manage long-term investments safely and resourcefully.
HDFC Standard Life Insurance offers a range of individual and group solutions,
which can be easily personalized to specific needs. Its group solutions have been
planned to offer complete flexibility, together with a low charging structure. As of 31
December, 2008, the Company's new business premium income stood at Rs. 1,839.70
Crores; it has covered over 812,811 lives so far.
The MD and CEO of HDFC Standard Life Mr. Deepak Satwalekar, has given
the company new directions and has helped the company achieve the status it
currently enjoys. HDFC Standard Life brings to you a whole range of insurance
solutions be it group or individual or NAV services for corporations; they can be
easily customized as per specific needs.
HDFC Standard Life Insurance India boasts of covering around 8.7 lakh lives by
March'2007. The gross incomes standing at a whopping Rs. 2, 856 crores, HDFC
Standard Life Insurance Corporation is sure to become one of the leaders and the first
preference for any life insurance customer.
The Bancassurance partners of HDFC Standard Life Insurance Co Ltd are HDFC,
HDFC Bank India Limited, Union Bank of India, Indian Bank, Bank of Baroda,
Saraswat Bank and Bajaj Capital.
28
BANCASSURAN
CE
Protection Plans
Children's Plans
29
BANCASSURAN
CE
Retirement Plans
30
BANCASSURAN
CE
Health Plans
Group Plans
HDFC Standard Life insurance is the oldest life insurance company in the world. It is
the largest insurer in the UK and is the 28th largest company in the world. In India, the
company is marketing life insurance products and unit linked investment plans. From
my research at HDFC SLIC, I found that the company has a lot of competition from
other private insurers like ICICI, Aviva, Birla Sun Life and Tata AIG. It also faces
competition from LIC. To compete effectively HDFC SLIC could launch cheaper and
31
BANCASSURAN
CE
more reasonable products with small premiums and short policy terms (the number of
year’s premium is to be paid). The ideal premium would be between Rs. 5000 – Rs.
25000 and an ideal policy term would be 10 – 20 years.
HDFC must advertise regularly and create brand value for its products and services.
Most of its competitors like Aviva, ICICI, Max, Reliance and LIC use television
advertisements to promote their products. The Indian consumer has a false perception
about insurance – they feel that it would not benefit them if they do not live through
the policy term. Nowadays however, most policies are unit linked plans where a
customer is benefited even if their death does not occur during the policy term. This
message should be conveyed to potential customers so that they readily invest in
insurance.
Family responsibilities and high returns are the two main reasons people invest in
insurance. Optimum returns of 16 – 20 % must be provided to consumers to keep
them interested in purchasing insurance.
On the whole HDFC standard life insurance is a good place to work at. Every new
recruit is provided with extensive training on unit linked funds, financial instruments
and the products of HDFC. This training enables an advisor/sales manager to market
the policies better. HDFC was ranked 13 in the Best Places to Work survey. The
company should try to create awareness about itself in India. In the global market it is
already very popular. With an improvement in the sales techniques used, a fair bit of
advertising and modifications to the existing product portfolio, HDFC would be all set
to capture the insurance market in India as it has around the globe.
32
BANCASSURAN
CE
Chapter 8
Various Trends
Challenges
Trends
33
BANCASSURAN
CE
Banks even offer space in their own premises to accommodate the insurance
staff for selling the insurance products or giving access to their client’s
database for the use of the insurance companies.
34
BANCASSURAN
CE
Challenges
Increasing sales of non-life products, to the extent those risks are retained by
the banks, require sophisticated products and risk management. The sale of
non-life products should be weighted against the higher cost of servicing those
policies.
Private sector insurance firms are finding ‘change management’ in the public
sector, a major challenge. State-owned banks get a new chairman, often from
35
BANCASSURAN
CE
another bank, almost every two years, resulting in the distribution strategy
undergoing a complete change. So because of this there is distinction created
between public and private sector banks.
The banks also have fear that at some point of time the insurance partner may
end up cross-selling banking products to their policyholders. If the insurer is
selling the products by agents as well as banks, there is a possibility of conflict
if both the banks and the agent target the same customers.
Chapter 10
Indian scenario
Global scenario
Survey Analysis
Findings
Recommendations
Conclusion
Bibliography
36
BANCASSURAN
CE
Indian Scenario
37
BANCASSURAN
CE
competition also makes it difficult for banks to retain their customers. Banassurance
comes as a help in this direction also. Providing multiple services at one place to the
customers means enhanced customer satisfaction. As for the insurance company the
advantage that bancassurance provides is evident. The insurance company gets
improved geographical reach without additional costs. In India around 67,000
branches are there for PSU banks alone. If all 67,000 branches sell the insurance
products one can see the reach. This is one method of penetrating the market.
India's rural market has huge potential that is still untapped by the
insurance companies. Setting up their own networks entails such a huge cost, that no
company would be interested in doing so. Bancassurance again comes as an answer. It
helps the insurance companies to tap the market at a much lower cost. As for the
customer the competitive nature of the Indian market ensures that the reduction in
costs would result in benefits in terms of lower premium rates being passed on to him.
The penetration level of life insurance in the Indian market is considerably low at
2.3% of GDP with only 8% of the total population currently insured.
Global Scenario
Bancassurance has grown at different pace and taken different shapes and
forms in different countries depending on the demography, economic and legislations
in that country. During the last two decades, bancassurance has taken deep roots in
38
BANCASSURAN
CE
various countries, especially in Europe. Bnacassurance, so far, has been basically
European.
39
BANCASSURAN
CE
By now, it has become clear that as economy grows it not only demands
stronger and vibrant financial sector but also necessitates to provide with more
sophisticated and variety of financial and banking products and services. The outlook
for bancassurance remains positive. While development in individual markets will
continue to depend heavily on each country’s regulatory and business environment,
bancassurers could profit from the tendency of governments to privatize health care
and pension liabilities.
India has already more than 200 million middle class population coupled
with vast banking network with largest depositors base, there is greater scope for use
of bancassurance. In emerging markets, new entrants have successfully employed
bancassurance to compete with incumbent companies. Given the current relatively
40
BANCASSURAN
CE
low bancassurance penetration in emerging markets, bancassurance will likely see
further significant development in the coming years.
In India the bancassurance model is still in its nascent stages, but the
tremendous growth and acceptability in the last three years reflects green pasture in
future. The deregulation of the insurance sector in India has resulted in a phase where
innovative distribution channels are being explored. In this phase, bancassurance has
simply outshined other alternate channels of distribution with a share of almost 25-
30% of the premium income amongst the private players.
Other tie-ups
41
BANCASSURAN
CE
15. Bharti Axa Life Insurance Co. Ltd.
A survey was conducted of about 50 people who did regular banking transactions and
also had an insurance policy. These included several housewives, businessmen,
professionals, students, etc. The following analysis was done on the basis of the
survey conducted:
42
BANCASSURAN
CE
No 20%
Yes
Yes 80% No
43
BANCASSURAN
CE
Yes
34%
No
No Yes
66%
Interpretation: Among the people who were surveyed, there were only 34%
people who had taken insurance policy from their respective banks. Remaining 66%
respondents didn’t opt to take a policy from their banks.
44
BANCASSURAN
CE
70 63%
60
50 42%
40
30 23%
18%
20
10
45
BANCASSURAN
CE
Interpretation: There was a mixed response from the customers. 80% said that
they took the insurance policy because of security benefits. 65% said that since, they
trusted their bank, they took the policy. There were 4o% who said that the brand
image of the company also mattered. Only 28% said that savings was a reason that
encouraged them to buy insurance policy.
Ins urance
com panies Banks
20% 23%
Brokers
7%
Ag ents
50%
46
BANCASSURAN
CE
100
90%
90
80
70%
70
60
50 38%
40
30
20
10
0
Interpretation: 90% people said that private sector banks would excel in this
because of their aggressive selling policies and they provide quality services to the
customers. 70% votes were given to foreign banks. Because foreign banks have
proper management and aggressive selling strategies. The public sector banks were
given the least votes because of their lazy approach to work.
No,5%
Yes
No
Yes,95%
47
BANCASSURAN
CE
Interpretation: 95% people said that they believe that Bancassurance has a very
bright future because there is an immense potential for the insurance industry in India.
But 7% believe that because of the emergence of the new technology such as ATM’s,
Internet banking etc the banks will soon go virtual so there is not much scope for it.
48
BANCASSURAN
CE
Findings
Although the concept is simple enough in theory, but in practice it has been
found to be far from straightforward.
Almost many people have a fair idea about Bancassurance and that their banks
sell various insurance products. But still few people don’t know about
Bancassurance as a concept.
It has been also found out that the banks have various opportunities to cross
sell insurance products. The insurance companies also have the opportunity to
take advantage of the bank’s network and other avenues.
It is also seen that customers have a lot of trust on the banks, and because of
that trust the customers will take the insurance products from banks.
As the brand name of the banks is important so is the brand image of the
insurance companies. So the banks and the insurance companies must tie-up
with the right partners. This will help them to create a better image in the
minds of the customers.
It has also clear from the study that the private sector and the foreign banks
have better future in Bancassurance. But the public sector banks are also
trying to give them a tough competition e.g. SBI Life Insurance Co.
The insurance business can go a long way because there is a large population
who is still unaware about insurance. So the insurance companies have a huge
potential market in the years to come.
The banks fail to provide personalized services as are provided by the agents.
So banks will have to improve in that area. They should provide after sales
services to the customers.
Banks now-a-days are trying to provide each and every service to its
customers. So by providing insurance, banks can add one more service to their
list.
49
BANCASSURAN
CE
Recommendations
The employees of the banks who are selling insurance products must be given
proper training so that they can answer to any queries of the customers and can
provide them products according to their needs.
Banks should also provide after sales services and they should be more
aggressive in selling the insurance products.
Banks should also do the settlement of claims which will increase the trust and
reliability of the customers on the banks.
In India, since the majority of the banking sector is in public sector which has
been widely responsible for the lethargic attitude and poor quality of customer
service, it needs to rebuild the blemished image. Else, the bancassurance
would be difficult to succeed in these banks.
A formal and standard agreement between these banks and the insurance
companies should be taken up and drafted by a national regulatory body.
These agreements must have necessary clauses of revenue sharing. In case of
possible conflicts, the bank management and the management of the insurance
company should be able to resolve conflicts arising in future.
Banks and Insurance companies should apply all the skills and potential in this
area and take advantage of the same and they should improve the products
from time to time according to the needs of the customers.
50
BANCASSURAN
CE
Conclusion
The life Insurance Industry in India has been progressing at a rapid growth
since opening up of the sector. The size of country, a diverse set of people combined
with problems of connectivity in rural areas, makes insurance selling in India a very
difficult task. Life Insurance Companies require good distribution strength and
tremendous man power to reach out such a huge customer base.
The concept of Bancassurance in India is still in its nascent stage, but the
tremendous growth and the potential reflects a very bright future for bancassurance in
India. With the coming up of various products and services tailored as per the
customers needs there is every reason to be optimistic that bancassurance in India will
play a long inning.
I have experienced a lot during the preparation of the project. I had just a
simple idea about Bancassurance. But after a detailed research in this topic I have
found how important bancassurance can be for bankers, insurers as well as the
customers. I am contented that all my objectives have been met to its fullest.
I have also experienced that though Bancassurance is not being utilized to its
fullest but it surely has a bright future ahead. India is at the threshold of a significant
change in the way insurance is perceived in the country. Bancassurance will definitely
play a defining role as an alternative distribution channel and will change the way
insurance is sold in India.
The bridge has been reached and many are beginning to walk those cautious
steps across it. Bancassurance in India has just taken a flying start. It has a long way
to go ……….. after all The SKY IS THE LIMIT!
51
BANCASSURAN
CE
Bibliography
Insurance watch.
Business world.
Business today.
52
BANCASSURAN
CE
Bibliography
www.insuremagic.com
www.google.com
www.hdfclife.com
www.india infoline.com
53