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GIREESHA Final Report.
GIREESHA Final Report.
GIREESHA Final Report.
Introduction
Introduction
The Banking and Insurance industries have changed rapidly in the changing and
challenging economic environment throughout the world. In this competitive and liberalized
environment everyone is trying to do better than others and consequently survival of the
fittest has come into effect.
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.
It is a new buzz word in India but it is taking roots slowly and gradually. It has been
accepted by banks, insurance companies as well as the customers. It is basically an
international concept which is spreading all around the world and is favored by all.
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.
Introduction to Banking
A sound and effective banking system is necessary for a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors. Many new
things have come up in the banking sector in the recent years. Banks have adopted the new
technology because banking has not remained up to accepting and lending but now it is all
about satisfying the needs of the customers.
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.
Entry of private and foreign banks in the segment has provided healthy competition
and is likely to bring more operational efficiency into the sector. Banks are also coping and
adapting with time and are trying to become one-stop financial supermarkets. The market
focus is shifting from mass banking products to class banking with the introduction of value
added and customized products.
In India, insurance has a deep-rooted history. Insurance in India has evolved over time
heavily drawing from other countries, England in particular. The insurance sector in India has
come a full circle from being an open competitive market to nationalization and back to a
liberalized market again. The business of life insurance in India in its existing form started in
India in the year 1818 with the establishment of the Oriental Life Insurance Company in
Calcutta.
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.
About Bancassurance
1. Meaning
2. Origin
3. Models of Bancassurance
i. Structural classification
ii. Product based classification
iii. Bank Referrals
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 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
Bancassurance is the distribution of insurance products through the bank's distribution
channel. It is a phenomenon wherein insurance products are offered through the distribution
channels of the banking services along with a complete range of banking and investment
products and services. To put it simply, Bancassurance, tries to exploit synergies between
both the insurance companies and banks.
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.
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
The other form of non-sick participatory distribution channel is that of ‘Corporate
Agency’, wherein the bank staff as an institution acts as corporate agent for the insurance
product for a fee/commission. This seems to be more viable and appropriate for most of the
mid-sized banks in India as also the rate of commission would be relatively higher than the
referral arrangement. This, however, is prone to reputational risk of the marketing bank.
There are also practical difficulties in the form of professional knowledge about the insurance
products. This could, however, be overcome by intensive training to chosen staff, packaged
with proper 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.
Research Methodology
Research Methodology:-
Research is one of the most important parts in the survey to collect information and
knowledge. Marketing research is defined as the systematic design, collection, analysis, and
reporting of data and findings relevant to a specific marketing situation facing the company.
“A study of, how the Bancassurance channel influence on selling of insurance products
through the banks”.
Research Objectives:
The proposed study covers detailed examination in Davanagere city. It mainly focus
on in learning the clear information about the Bancassurance and finding out the factors that
highly influence on it.
Research methodology:
Since there are very few studies have been conducted in this area of study, the
researcher will use exploratory research methodology to better comprehend the nature of the
problem. So this involves extensive interviews with the citizen of the city as well as the
customers of SBI.
Data needed for this research study is collected from both primary and secondary
sources.
Primary data:
The primary data will be collected by administering the pre-tested questionnaires among the
customers of the selected sample unit, followed by indirect collection by interviews with
customers of different income levels and knowledge levels in selected area.
Secondary data:
The secondary data will be collected from the news papers, journals, publications
published by research institutions, university libraries as well as those published on internet
or websites.
Sample Size:
A Sample size of 50 respondents will be taken for the current study because it is not
possible to cover the whole universe in the available time period. So it is necessary to take the
sample size. The sample will the peoples of age group lying between eighteen to thirty years.
The sample will be taken in the form of strata based on age, sex, and income group.
CHAPTER – 3
Profile of SBI Life Insurance
State Bank of India enjoys the largest banking franchise in India. Along with its 7
Associate Banks, SBI Group has the unrivalled strength of over 14,500 branches across the
country, arguably the largest in the world. Cardif is a wholly owned subsidiary of BNP
Paribas, which is the Euro Zone’s leading Bank. BNP Paribas is one of the oldest foreign
banks with a presence in India dating back to 1860. Cardif is ranked 2nd worldwide in
creditor’s insurance offering protection to over 35 million policyholders and net income in
excess of Euro 1 billion. Cardif has also been a pioneer in the art of selling insurance
products through commercial banks in France and in 35 more countries.
SBI Life extensively leverages the SBI Group as a platform for cross-selling
insurance products along with its numerous banking product packages such as housing loans
and personal loans. SBI’s access to over 100 million accounts across the country provides a
vibrant base for insurance penetration across every region and economic strata in the country
ensuring true financial inclusion.
Agency Channel, comprising of the most productive force of more than 25,000
Insurance Advisors, offers door to door insurance solutions to customers.
B. Pension Products
SBI Life - Horizon II Pension:
A unique Unit Linked Pension Plan that will enable the customers to build a kitty good
enough to enable them to spend a peaceful and financially sound, retired life. SBI Life -
Horizon II Pension is a safe and hassle free way to get high returns. It comes with the unique
feature of Automatic Asset Allocation by means of which you truly, don’t need to be an
expert to grow your money.
F. For Brokers :
1) SBI Life - SARAL ULIP:
It is a simple Unit Linked Non-Participating Insurance Plan. The sum assured is based on
Term and Premium amount. There is also flexibility to increase or decrease regular premium
and it also provides tax benefits.
➢ Group Products
A. Group Employee Benefit Products
I. Retirement Solutions:
1) SBI Life - CapAssure Gratuity Scheme:
It is a Non-Participating yearly renewable traditional Group Gratuity Scheme. Under this
scheme, the contributions paid continue to accumulate on traditional platform of investments
and at the end of the financial year; an investment income earned on your contributions is
credited to your gratuity fund account.
10) SBI Life provides SBI Life - Group Leave Encashment cum Life Cover
Scheme:
It is a Non-Participating yearly renewable traditional group leave encashment scheme.
Under this scheme, the contributions paid continue to accumulate on traditional platform of
investments.
SBI has the largest banking network in the county. The bank is looking for business
from every customer segment of the bank rural and urban segments, upper, middle and lower
income segments /groups and corporate segment. Besides their own channels they are
planning to distribute products through other interested banking channels also. It is expected
that 2/3 rd of the premium income in expected to come by way of bancassurance and the rest
from the traditional agency channel as well as ties up with corporate agents (Sundaram
Finance). SBI has also introduced group insurance to some well managed corporate staffs.
Even as it plans to scale up operations shortly, SBI Life Insurance Company Ltd is
looking at tripling its gross premium income in the new financial year. In 2007-08, SBI Life
earned a total premium income of Rs 5,622 crore, of which income from new policy sales
was Rs 4,800 crore. For the current financial year, their target is to achieve a total premium
income of Rs 10,500 crore and a first year premium income of Rs 8,500 crore”. The SBI Life
ranks second in terms of market share among private life insurers in the country.
SBI Life Insurance Company is the first among the 14 life insurance companies in
the private sector to post a net profit in 2005-06. There are life insurance players much more
aggressive than SBI and they have still not been able to break the record of SBI. Their
success is largely on the channel strategy and product strategy. The another aspect is their
superior investment performance. They have consistently, over the last two years, generated
11-12 per cent earnings from the investments.
SBI Life Insurance is uniquely placed as a pioneer to usher bancassurance into India.
The company hopes to extensively utilize the SBI Group as a platform for cross-selling
insurance products along with its numerous banking product packages such as housing loans,
personal loans and credit cards. SBI’s access to over 100 million accounts provides a vibrant
base to build insurance selling across every region and economic strata in the country.
CHAPTER – 4
Utilities, Regulations, Benefits and
Distribution Channels of Bancassurance.
Utilities of Bancassurance
1. For Banks:
i. As a source of fee based income
ii. Product diversification
iii. Building close relations with the customers
2. For Insurance Companies
i. Stiff competition
ii. High cost of agents
iii. Rural penetration
iv. Multi-channel distribution
v. Targeting middle income customers
For the new insurance players who started during the post- reform period in India,
bancassurance has come as a blessing in disguise. Getting a ready- made distribution network
at one shot and that too at a fraction of the total cost to develop a distribution network of their
own, enabled them to go aggressive on this channel. Companies like SBI life and Aviva have
reported over 65% of their businesses through bancassurance channel for the year 2004-05.
ICICI Prudential Life Isurance Co. Lord Krishna Bank, ICICI Bank,
Ltd Bank of India, Citibank, Allahabad
Bank, Federal Bank.
Met Life India Insurance Co. Ltd. Karnataka Bank, Dhanalakshmi Bank & J&
K Bank
SBI Life Insurance Company Ltd. State Bank of India
Bajaj Allianz general Insurance Co. Ltd. Karur Vysya Bank and Lord kishna Bank
National Insurance Co Ltd. City Union Bank
Royal Sundaram General Insurance Standard Chartered Bank, ABN AMRO
Company Bank, Citi Bank
United India Insurance Co. Ltd. South Indian Bank.
Banks have got a wide retail network, which can be exclusively used by there
insurance companies to sell their products. India’s 27 public sector banks accounts for
approximately 92% of the total network. Among other things, the network involves 33000
rural branches and 14000 semi- urban branches where insurance penetration largely
untapped.
In this competitive world there are utilities of bancassurance for Bank & Insurance Company
which is as follows:
1. For Banks
i. As a source of fee income
Banks’ traditional sources of fee income have been the fixed charges levied on loans and
advances, credit cards, merchant fee on point of sale transactions for debit and credit cards,
letter of credits and other operations. This kind of revenue stream has been more or less
steady over a period of time and growth has 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. From the banks’ point of view,
opportunities and possibilities to earn fee income via Bancassurance route are endless. A
typical commercial bank has the potential of maximizing fee income from Bancassurance up
to 50% of their total fee income from all sources combined. Fee Income from Bancassurance
also reduces the overall customer acquisition cost from the bank’s point of view. At the end
of the day, it is easy money for the banks as there are no risks and only gains.
III.Rural Penetration
Insurance industry has not been much successful in rural penetration of insurance so far.
People there are still unaware about the insurance as a tool to insure their life. However this
gap can be bridged with the help of Bancassurance. The branch network of banks can help
make the rural people aware about insurance and there is also a wide scope of business for
the insurers. In order to fulfill all the needs bancassurance is needed.
B. 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.
C. Corporate agents: Commercial banks, including co-operative banks and RRBs may
become corporate agents for one insurance company. Banks cannot become insurance
brokers.
D. 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:-
Benefits of Bancassurance
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1. To Banks
From the banks point of view:
By selling the insurance product by their own channel the banker can increase their
income.
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.
The Bankers have extensive experience in marketing. They can easily attract
customers & non-customers because the customer & non-customers also bank on
banks.
Banks are using different value added services life-E. Banking tele banking, direct
mail & so on they can also use all the abovementioned facility for Bankassurance
purpose with customers & noncustomers.
Productivity of the employees increases.
By providing customers with both the services under one roof, they can improve
overall customer satisfaction resulting in higher customer retention levels.
Increase in return on assets by building fee income through the sale of insurance
products.
Can leverage on face-to-face contacts and awareness about the financial conditions of
customers to sell insurance products.
Banks can cross sell insurance products E.g.: Term insurance products with loans.
1. To Insurers
From the Insurer Point of view:
➢ The Insurance Company can increase their business through the banking distribution
channels because the banks have so many customers.
➢ By cutting cost Insurers can serve better to customers in terms lower premium rate
and better risk coverage through product diversification.
➢ 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.
➢ Customer database like customers' financial standing, spending habits, investment and
purchase capability can be used to customize products and sell accordingly.
➢ 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.
➢ The insurance companies can also get access to ATM’s and other technology being
used by the banks.
➢ The selling can be structured properly by selling insurance products through banks.
➢ The product can be customized as per the needs of the customers.
1. To Customers
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.
• Comprehensive financial advisory services under one roof. i.e., insurance services
along with other financial services such as banking, mutual funds, personal loans etc.
• Easy access for claims, as banks are a regular visiting place for customers.
• Innovative and better product ranges and products designed as per the needs of
customers.
• Any new insurance product routed through the bancassurance Channel would be well
received by customers.
• 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.
Banks Insurance
• Revenues and
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• Creation of
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Bank.
Distribution Channels
Traditionally, insurance products were promoted and sold principally through agency
systems only. The reliance of insurance industry was totally on the agents. Moreover with the
monopoly of public sector insurance companies there was very slow growth in the insurance
sector because of lack of competition. The need for innovative distribution channels was not
felt because all the companies relied only upon the agents and aggressive marketing of the
products was also not done. But with new developments in consumers’ behaviours, evolution
of technology and deregulation, new distribution channels have been developed successfully
and rapidly in recent years. Recently Bancassurers have been making use of various
distribution channels, they are:
1. Career Agents:
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.
2. Special Advisers:
Special Advisers are highly trained employees usually belonging to the insurance partner,
who distribute insurance products to the bank's corporate clients. The Clients mostly include
affluent population who require personalised and high quality service. Usually Special
advisors are paid on a salary basis and they receive incentive compensation based on their
sales.
3. 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.
6. Direct Response:
In this channel no salesperson visits the customer to induce a sale and no face-to-face
contact between consumer and seller occurs. The consumer purchases products directly from
the bancassurer by responding to the company's advertisement, mailing or telephone offers.
This channel can be used for simple packaged products which can be easily understood by
the consumer without explanation.
7. Internet:
Internet banking is already securely established as an effective and profitable basis for
conducting banking operations. Bancassurers can feel confident that Internet banking will
also prove an efficient vehicle for cross selling of insurance savings and protection products.
Functions requiring user input (check ordering, what-if calculations, credit and account
applications) should be immediately added with links to the insurer. Such an arrangement can
also provide a vehicle for insurance sales, service and leads.
8. E-Brokerage:
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.
TRENDS
➢ Though bancassurance has traditionally targeted the mass market, but bancassurers
have begun to finely segment the market, which has resulted in tailor-made products
for each segment.
➢ Nevertheless, banks are starting to embrace direct marketing and Internet banking as
tools to distribute insurance products. New and emerging channels are becoming
increasingly competitive, due to the tangible cost benefits embedded in product
pricing or through the appeal of convenience and innovation.
➢ Bancassurance proper is still evolving in Asia and this is still in infancy in India and it
is too early to assess the exact position. However, a quick survey revealed that a large
number of banks cutting across public and private and including foreign banks have
made use of the bancassurance channel in one form or the other in India.
➢ 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.
➢ As number of banks in India have begun to act as ‘corporate agents’ to one or the
other insurance company, it is a common sight that banks canvassing and marketing
the insurance products across the counters.
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.
➢ Bank employees are traditionally low on motivation. Lack of sales culture itself is
bigger roadblock than the lack of sales skills in the employees. Banks are generally
used to only product packaged selling and hence selling insurance products do not
seem to fit naturally in their system.
➢ Human Resource Management has experienced some difficulty due to such alliances
in financial industry. Poaching for employees, increased work-load, additional
training, maintaining the motivation level are some issues that has cropped up quite
occasionally. So, before entering into a bancassurance alliance, just like any merger,
cultural due diligence should be done and human resource issues should be adequately
prioritized.
➢ Private sector insurance firms are finding ‘change management’ in the public sector, a
major challenge. State-owned banks get a new chairman, often from 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 – 6
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 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.
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.
RECOMMENDATIONS
➢ The Insurance companies need to design products specifically for distributing through
banks. Trying to sell traditional products may not work so effectively.
➢ 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.
➢ For bancassurance to succeed, products and processes will need to be tailored to bank
markets, rather than adjusted to insurer’s specifications.
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!
Questionnaire
Dear respondents,
………………………………………………………………………...
………………………………………………………………………...
2. Gender:
(a) Male [ ]
(b) Female [ ]
3. Martial Status:
(a) Married [ ]
(b) Single [ ]
4. Age:
(a) 20-30 [ ]
(b) 30-40 [ ]
(c) 40-50 [ ]
(d) 50-60 [ ]
(e) Above 60 [ ]
5. Profession: …………………………………...……….
6. Monthly income :
(a) 10K-20K [ ]
(b) 20K-30K [ ]
(c) 30K-40K [ ]
(d) 40K-50K [ ]
(e)Above 50K [ ]
7. Are you aware of Bancassurance?
(a) Yes [ ]
(b) No [ ]
9. Do you consider Brand name of the company is essential while taking insurance
policy?
Yes [ ]
No [ ]
12. On Your Choice Which Mode Of Insurance Distribution Channel Would You
Prefer To Buy The Policy From?
(a) Insurance companies [ ]
(b) Banks [ ]
(c) Brokers [ ]
(d) Agents [ ]
13. Which Bank Do You Feel Would Excel In Bancaasurance? Rate Them Accordingly
(a) Public Sector banks [ ]
(b) Private Sector banks [ ]
(c) Foreign Banks [ ]