BANCASSURANCE Implementing Bancassurance: Key Challenges in the Indian context

Creating an environment of top level involvement of bank management. Bringing relevance, motivation and skill development at the operating level at bank branches. Resolving possible conflicts of interest between the bank and the insurer. Setting up distribution procedures consistent with the manual systems in most banks. Establishing credible service level agreements between the bank and the insurer.

Important Bancassurance tie-up in India: There are certain tie-up between the Insurance company & banks are given at present days these tie-up are going well, running well & past in the field of Bancassurance. (1) LIC: The insurance company LIC of India have tie up with the following bank for Bancassurance. They are: (A) Corporation Bank (B) Indian Overseas Bank (C) Centurion Bank (D) Sahara District Central Co-operative bank (E) Janta Urban Co-operative bank (F) Yeotmal Mahila Sahakari Bank (G) Vijaya Bank & (H) Oriental Bank of Commerce 2) SBI Life Insurance Co: The SBI life Insurance Co Ltd is starting & Running its Insurance business with the help of S.B.I. 3) Bajaj Allianz general Insurance Co. Ltd: In the field of general Insurance the Bajaj Allianz General Insurance Co Ltd., has tie-up with Karur Vysya Bank & Lord Krishna Bank. 4) Birla Sun life Insurance Co. Ltd: The Birla Sun life Insurance Company has a tie-up with the following bank for the insurance purpose :(a) Bank of Rajasthan (b) Andhra Bank (c) Bank of Muscat (d) Development Credit Bank (e) Dutch Bank & (f) Catholic Syrian Bank Inspite of above mentioned tie-up with banks. There are many tie-ups for the purpose of bancassurance. Like ICICI Prudential, United India Insurance Co-Ltd. & so on

* Issues to be keep in mind while tie-up: The followings are certain issues that we have to keep in mind while tie-up with bank for Bancassurance purpose (1) Do not depend upon traditional Method: The tie-up needs to develop innovative products and services rather than depends upon the traditional tracks. The kind of products. The bank would be allowed to sell are another major issue. For example: - a complex unit-linked life insurance product is better sold through brokers & agents, while a standard term product or simple products like auto Insurance, home loan and accident Insurance cover can be handled by bank branches. (2) Clarity on operational activities : There is need to be clarify on the operational activities of Bancassurance that :(a) Who will do branding? (b) Will the Insurance Company prefer to place a person at the branch of the bank? Or (c) Will the bank branch train and keep its own people? (d) Who will pay remuneration of above-mentioned people bank or Insurance Company or both in some ratio? (3) Required Good Training: Even though the banks are in personal contact with its client, a high degree of active marketing skill is required to sell the insurance products. These can be possible through proper training only.

Advantages of Banassurance: Bancassurance is a tool, which is beneficial to bank, customer & Insurer at a time. There are certain benefits of bancassurance are given. (1) From the banks point of view: (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. (II) From the Insurer Point of view: (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. (III) From the customers' point of view: Product innovation and distribution activities are directed towards the satisfaction of needs of the customer. Bancassurance model assists customers in terms of reduction price, diversified product quality in time and at their doorstep service by banks.