Finance Project

Study on Customer Perception towards Bancassurance
A study on customer perception towards

bancassurance
Project Report Submitted to Kuvempu University in partial

fulfillment of the requirement for the degree of
Master of Commerce
Submitted by
Sunila M N
M.Com, Semester IV
Register Number: PC180153
Department of Post Graduate Studies and Research in Commerce
Kuvempu University, Jnana Sahyadri
Shankaraghatta- 577451
Under the guidance of

Dr. Raghu Nandan
Faculty Member
Kuvempu University, Jnana Sahyadri
Shankaraghatta-577451, Shivamogga District, Karnataka
2020
Department of PG. Studies and research in Commerce Page 1

ACKNOWLEDGEMENT
Motivation causing people to act in a certain direction is very necessary for
the success of any task. “Behind every successful student, there is a
teacher”. I feel happy and proud to mention those who motivated me and
contributed directly or indirectly in making this project successful.
I take this opportunity to express my sincere thanks to Prof. Venkatesh S.,
Chairman, and professor, Department of P. G Studies and Research in
commerce, Kuvempu University, Jnana Sahyadri, Shankaraghatta.
My sincere thanks to Dr. Raghu Nandan, Faculty Member, Department of
P.G Studies & Research in commerce, Kuvempu University, Jnana Sahyadri,
Shankaraghatta. My project guide for him valuable guidance and constant
encouragement throughout the project study.
I would like to offer my wholehearted gratitude to all Faculty Members and
Non – teaching Staff, Department of P.G Studies and Research in commerce,
Shankaraghatta, and other friends for being so encouraging, supportive and
forbearing throughout the study
I would like to offer my sincere thanks and gratitude towards all those people
who helped me with the successful completion of my project study with
timely co-operation my endeavor would not have been a success.
I am pleased to my profound etiquette to beloved parents Nagarajappa M
and Lakshmamma for their encouragement, affection, and love throughout
my career. I thank all my friends who directly or indirectly helped me in
completion of this work.
Date:
Place: Shankaraghatta Sunila M N

From:
Sunila M N
M.Com, Semester – IV,
Reg. No: PC 180153
Shivamogga District, Karnataka
Declaration
I hereby declare that,
1. The work contained in this report is original and has been done by me under
the guidance of my supervisor, Dr. Raghu Nandan.
2. The work has not been submitted to any other university for any degree or
diploma.
3. I have followed the guidelines provided by the Department in preparing the
report.
4. I have conformed to the norms and guidelines given in the Ethical Code of
Conduct of the Department.
5. Whenever I have used materials (data, theoretical analysis, figures, and text)
from other sources, I have given due credit to them by citing them in the text
of the report and giving their details in the references.
Date:
Sunila M N

KUVEMPU UNIVERSITY
Department of Post Graduate Studies and Research in commerce
Jnana Sahyadri, Shankaraghatta – 577451
Certificate
This is to certify that Sunila M N is a bonafide student of this Department and
this Department and this Project Report on “A study on customer
perception towards bancassurance” has been prepared by her in partial
fulfillment of the requirement for the Degree of Master of Commerce under
my guidance.
Dr. Raghu Nandan

(Faculty Member)
Date:

KUVEMPU UNIVERSITY
Department of Post Graduate Studies and Research in
commerce
Jnana Sahyadri, Shankaraghatta – 577451
Certificate
This is to certify that Sunila M N is a bonafide student of this Department and

this Department and this Project Report on “A study on customer
perception towards bancassurance” has been prepared by her in partial
fulfillment of the requirement for the Degree of Master of Commerce under
my guidance of Mr. Raghu Nandan, Faculty Member, Department of Post
Graduate Studies and Research in Commerce, Kuvempu University,
Shankaraghatta.
Prof. Venkatesh S.

Contents
SI. Particulars Page
No No
1 Chapter 1: Introduction and Research Design 1 - 20
1.1 Introduction
1.2 Review of literature
1.3 Objectives of study
1.4 Statement of the problem
1.5 Scope of the study
1.6 Methodology
1.7 Sample design
1.8 Statistical tools and techniques
1.9 Limitation of study
1.10 Chapter scheme
Chapter 2: Profile of State Bank of India 21 - 32
2.1 Introduction
2.2 History
2.3 Organizational structure
2.4 Vission Mission Objectives
2.5 Growth and development
2.6 Awards and Achievements
3 Chapter 3: Conceptual Framework 33 - 58
3.1 Introduction
3.2 Advantages of Bancassurance
3.3 Consumer perception regarding life insurance
policies
3.4 Need for life insurance in India
3.5 Information related to public and private life
insurance
3.6 Models of Bancassurance
3.7 Utilities of Bancassurance
3.8 Benefits of Bancassurance
3.9 Distribution channels

3.10 Key drivers of Bancassurance

3.11 Requirements for success of Bancassurance
3.12 State bank of India and Bancassurance
3.13 Trends and challenges
3.14 Bancassurance in India – A SWOT analysis
3.15 Bancassurance – Taking the lead
3.16 Problems in Bancassurance
3.17 Future of Bancassurance
4 Chapter 4: Data analysis and interpretation 59 - 81
5 Chapter 5: Summary of major findings and 82 - 85

suggestion and conclusion
5.1 Findings
5.2 Suggestions
5.3 Conclusion
Bibliography 86
Questionnaire 87 - 90

List of Tables
SI No Table Name of the Tables Page

No No
1 4.1 Gender wise classification of respondents 60
2 4.2 Age wise classification of respondents 61
3 4.3 Education wise classification of respondents 62
4 4.4 Occupation wise classification of respondents 63
5 4.5 Income level wise classification of respondents 64

6 4.6 Marital status wise classification of respondents 65
7 4.7 Classification of respondents on the basis of 66
bank account they have
8 4.8 Classification of respondents on taking 67
bancassurance from the same bank in which
they have account
advantage which they wish to avail from the
bancassurance
influencing factors to buy bancassurance policy
response regarding the best method to improve
bancassurance
their opinion about the preference of the
bancassurance by bank
their opinion about the preference of insurance
by insurance company
14 4.14 Classification of respondents about their 73
knowing about bancassurance policy
15 4.15 Classification of respondents on their opinion 74
about continuing with the same bancassurance
policy
type of service expected from bank

their preference about bank and insurance

company to invest
their opinion about advising customers to take
bancassurance policy
their view about taking a measure to create
awareness about bancassurance among
customers
20 4.20 Classification of respondents on factor which is 79
preferred for the success of bancassurance
21 4.21 Classification of respondent‟s opinion about the 80
bright future of bancassurance in India
their opinion about overall satisfaction rating of
the bancassurance

Chapter – 1
Introduction and research design
1.1 INTRODUCTION
Bancassurance is a team coined by combining the two word Bank and

Insurance distribution of insurance product through banking channels.
Bancassurance encompasses term such as Allianz in (German).Integrated financial
service and assure banking. This concept gained currency in the growing Global
insurance industry and it search for the new distribution channel.
Bancassurance commonly means selling insurance products under the same

roof of the bank. Through bank assurance had roof in the frame in the year1980 and
spared across different part of continental Europe since it has across Asia. In
India there are number of reasons that why bancassurance could play a natural role
in the insurance market. At first bank have a huge network across the country.
Secondly the bank can offer fee based income for the employees to sale the
insurance.
The Bancassurance model an attractive alliances of both the parties has taken a
flying start in India, but much more needs to be done in order to meet out the
uninsured Indians.Bancassurance selling insurance products under a roof of a
bank had its humble beginning in 1990s in France and soon spread its wings to
different part of the word. In the Indian contest (post the March 2000 RBI
amendment and IRDA 2002 notification) the very concept provided a ray of hope
to a number of insurance players as culturally banks are more acceptable than
insurance companies. Add to this the more pragmatic aspect of penetration of
commercial banks. The strategic alliance between a bank and a insurance company
could have come more appropriate time.
IRDA has allowed bancassurace from 2002.Under the norms a bank was
allowed to act as an agent for only one life and one general insurer.Bancassurance is
delivery channel in which an insurance company uses banks sales channels to sell its
product.

This distribution will undergo a sea change in a various insurance companies

are proposing to bring the insurance products into the lives of the common man by
making them available at the most basic financial point ,the local bank branch
through the bancassurance.Simply put bancassurance is the process through which
insurance products are sold to customers at their local banks with the bank
networking of 65,000 branches serving more 300 million ,can be available at
affordable price to people even in remote corners of the country
1.1 REVIEW OF LITERATURE:-
 Mishra and Gupta et al, 2012.
In India, the advent of bancassurance was necessitated by the poor

penetration ratio of the insurance companies and the declining income of the banks
(Karunakaran, 2006). The persistent endeavor in scouting for new technology, new
products / services / new avenues, has become necessary for the growth as well as
sustainability of the banking system in India. In this context, bancassurance is an
appropriate choice for banks to increase their stable source of income with
relatively less investment in the form of new infrastructure.
Also, the large reach and customer base of banks in both urban and rural
areas in India, the persistency rate in Bancassurance due to the continuous contact
with the client is better than in other channels. The ease of payment of premium
and the facility of maturity/claim payments through the bank account make it a
customer friendly channel (Goverdhan, 2008). Also, the fact that Banking
operations in India are still branch oriented and manually operated is all the more
conducive for flourishing of bancassurance.
 Aggarwal ,2012
Study and comparison of bancassurance as an insurance intermediary for

private and public sector life and non-life insurance companies have shown
interesting results over a period of time. Life insurance companies like AVIVA and
SBI Life have 70 percent and 53 percent of their business coming from the
bancassurance channel respectively, while ICICI Prudential gets 30 percent of its
business through the bancassurance mode and the age old player LIC gets only 0.49

percent of its business through this channel (Sharma and Saxena, 2004). Similarly,
a study conducted in 2007 finds that for SBI 67 percent, for AVIVA Life
Insurance 65 percent, 40 percent for Birla Sunlife, 19 percent for ICICI Prudential
and only 1 percent of the new premium generation for these companies comes from
the bancassurance channel (Parimalarani, 2007). Another aspect that is seen here is
that bank owned insurers like HDFC Standard Life, SBI and ICICI are getting large
share of their business through bancassurance while Aviva, Bhartietc are getting
their business more through referral arrangements. On the other hand, LIC has been
slowly using these alternate channels (Aggarwal, 2012).
 Pani and Swain, 2013
The advent of bancassurance as an insurance intermediary has started

showing its impact on the Indian insurance scene in the last few years. Combining
the competitive edge of the insurance companies‟ in product development with the
banks edge in distribution of services, the insurance penetration in India has
increased from 1.9 percent in 2000 to 4.8 percent in March 2006(Karunagaran,
2006). The new business premium generation has seen a growth of 36 percent for
the year 2004-2005 (Gupta, 2006). The Watson Wyatt Survey 2008 brings out that
the bank distribution of insurance products accounts for about 25 percent of the
total new business for private insurers and the figures are expected to rise to 40
percent by the year 2013.
The IRDA Annual reports of 2010-2011 highlight that among the various
channels, the share of the banks in new business generation has increased from
10.60 percent on 2009-2010 to 13.30 percent in 2010-2011 in the individual life
insurance segment. In the group life insurance segment, the total group business of
the private insurers has increased from 8.67 percent in 2009-2010 to 11.51 percent in
the year 2010- 2011 while for LIC of India only 0.88 percent of the group
insurance business has come through this route.
(Parasuraman et al, 1985). Customers in developing economies consider the

technological factors such as core services and systematization as a yard-stick for
judging the performance of services (Chandra et al., 2003) while values and image
have been found to be significant dimensions in determining service quality in

conventional banks (Jab noun and Khalifa, 2005). Krishnan et al (1999) have
studied the drivers of customer satisfaction for financial services. They have
provided a framework approach for translating the customer feedback into
managerial actions for improving overall customer satisfaction with financial
services.
For life insurance companies, consumer satisfaction is a function of safety,

trust, product selection and appropriate handling of paper- work by the insurer
(Kuhlemeyer and Allen 1999). While for banks, general satisfaction, trust, reliability
and professionalism are the parameters of measuring customer satisfaction.
 Dash and Mahapatra, 2010
Parasuraman et al (1985) has listed the determinants of service quality as reliability,

responsiveness, competence, access, courtesy, communication, credibility, security,
understanding and tangibles, which exist in all services
 Reddy (2005)
Reddy (2005) in his article studied the customer perception towards life
insurance companies policies. His objective of the study was to know customer
opinion on whether insurance policies of private companies are better alternatives to
public company‟s insurance policies or not. According to the study, majority of the
respondents feel that insurance policies offered by private companies are up to their
expectations but when compared with the public companies‟ policies, very few are
better alternatives.
In a similar comparative study carried out on the performance and customer

satisfaction between insurance companies in the public and private sector, he
found that 13 percent of the respondents did not know the details of the policy
purchased. They just relied on what the insurance agent or bank executive told
them at the time of purchase. 96 percent of the respondents rated LIC as the best
financially stable insurance company. In terms of claim settlement, 17percent of the
respondents found that private companies settle claims better whereas 83percent still
find it comfortable with the public sector.

 Keerthi and Vijayalakshmi, 2009
Commenting on customer satisfaction in General Insurance sector, Johri

(2009) has reminded the public sector general insurance companies that if they want
to keep their stake and not let the private players take the lead, the only shortcut for
them is quality service. According to him, an insurance company‟s corporate culture
should be based on 6 c‟s – communication, cooperation, cheerfulness, credibility,
challenge and continuity. In the survey conducted on over 2000 respondents – both
customers and employees, he found that perception gaps existed in the areas of (1)
visual appeal of document and office (2) responsiveness and dependability (3)
product knowledge and adherence to promises (4) reliability and assurance.
In order to enhance customer satisfaction, insurance companies must look

into all the factors relating to services and frequently intimating the policy holders
about the current status of the policies, launch of new policies through mobile
alerts, e-mails or directly through the phone. This will have a direct impact on
customer satisfaction .
 Sarvanakumar et al,2012
Bancassurance, which has gained momentum in the last few years on the Indian
scene, has a bag full of opportunities and challenges in the times to come (Parihar).
Some authors predict that it will flourish and come out as a strong channel of
insurance selling while others are of the opinion that the times ahead will be
turbulent and hence, banks and insurance companies need to redesign their products
and strategies while selling insurance through this route.
Bancassurance, in India will see only a limited success in the Indian sub-
continent as the banks may not be able to translate this into a business opportunity
because of strong conflict of interest with the core banking business (Singh and
Hajeebhoy, 2006). The apprehension about the possibility of substitution effect
between its own products and insurance products especially when most of the
insurance products in India come with an added attraction of tax incentive may
hamper the growth of bancassurance.

In a survey of six large US financial conglomerates, Grant (1992) 9 reported that

five companies emphasized size benefits as a rationale for diversification. Size was
mainly viewed conferring a competitive advantage for entry into new financial
services. Grant conducted a thorough analysis of the motives for large financial
services firms‟ diversification in the United States. He conducted various interviews
and reviewed the public statements of top management regarding their
diversification strategies. He found that the exploitation of synergies was at the core
of such strategies. However, he found that the only diversification moves that
proved profitable were in insurance. In fact, when divisional profitability was
examined, insurance divisions were more profitable in large diversified firms
than their specialized counterparts. However, only six large diversified firms
were examined against 10 „specialized‟ counterparts. Moreover, there was no
convincing evidence that this superior profitability stem-tied with the exploitation of
synergies specifically.
Fagan (1991) emphasized the high gross margins available to distributors of life
insurance products. Many bank managers appeared to believe that they could raise
the efficiency of life insurers through the acquisition process. This was motivated
by the widespread belief that synergies could occur through the combination,
thereby cutting distribution costs. Thus, life insurance‟s inherent profitability
was not in itself viewed as the rationale for bancassurance but rather it was felt that
banks‟ declining profit margins can be boosted by expanding in an area where
they can use their competitive advantages in terms of distribution.
Carey, Prowse, Rea and Udell (1993) proposed that a credit market hierarchy
exists among private debt (inside bank loans), private placement (inside
insurance company bonds) and the public debt market (outside debt). Market
hierarchy among different types of financial institutions was grounded in the notion
that there exists a connection between a financial institution‟s monitoring ability and
its liability structure (as imposed by regulation) and associated asset management.
Legal barriers affected the sources of funds among different financial institutions
logically led to asset specialization of institutions (e.g., long-term versus short-term
lending) on the supply side of the

credit market.
A comparison of the expense ratios of life insurers in France in 1991 showed that
insurers relying on traditional agents had considerably higher expense ratios than
banks‟ in-house companies. The latter showed expenses ratios varying from 3.1% to
9.1% while traditional insurers had expense ratios ranging from 10.5% to 23.7%.
The use of relational databases was seen as an effective way to cross-sell a range of
services to bank customers at a low cost. Such practices, however, fall under the
scrutiny of data protection regulations (Leach (1993).]
Berger and Ofek (1994) found that diversified firms had values that were 13% to
15% below the sum of the imputed values of their segments, but this loss was
mitigated in cases of more focused diversification within related industries. These
results were consistent with Rumelt‟s argument that diversification was more likely
to be value enhancing when management skills and physical resources across firm
segments could be applied in related markets.
Bergendahl (1995) has made one of the only attempts to estimate the profitability of
bancassurance strategies by comparing the costs of setting up a bancassurance
operation (including the development of computer systems allowing banks to take
advantage of cross-selling opportunities, personnel training and marketing costs)
with benefits such as sales margins and other indirect benefits (e.g. increasing
customer loyalty).
Rose and Smith (1995) studied BHCs‟ expansion into the limited number of
insurance lines allowed during the period 1974 to 1990 and found banks experienced
positive abnormal returns, especially after 1982.
Due to legal separation of banking and insurance underwriting, the

majority of bank credit was financed by short-term floating-rate deposits, while life
insurance companies obtained funds from long-term fixed-rate insurance contracts.
From the demand (or firm) side of the credit market, theoretical work on the
maturity of debt structure had proposed a connection between information

problems and firms‟ debt maturity choices (Barclay and Smith

(1995).
The most successful products were those that were sensitive to the differing
characteristics between insurance and banking products and meet the majority of the
consumers‟ needs (Griffin, 1996).
Estrella (2001)
employed an option-pricing approach with 1989-1998 market equity data to
evaluate failure probabilities for various simulated combinations of bank holding
companies, life insurance, property and casualty insurance, securities and non
financial firms. The authors found that insurance activities generally reduced failure
risk when combined with banks, which was due to the high diversification of
insurance companies themselves, rather than to a low correlation between stock
returns of insurance firms and banks.
Brahman R. (2004) et al. in their article “Bancassurance in India- Issues and

Challenges” opined bancassurance as an established and growing channel for
insurance distribution though its penetration varies across different markets. The
study found that social and cultural factors, together with regulatory considerations
and product complexity determine the success of bancassurance in a particular
market.
Study and comparison of Bancassurance as an insurance intermediary for private

and public sector life and non life insurance companies have shown interesting
results over a period of time. Life insurance companies like AVIVA and SBI Life
have 70% and 53% of their business coming from the Bancassurance channel
respectively, while ICICI Prudential gets 30% of its business through the
Bancassurance mode and the age old player LIC gets only 0.49% of its business
through this channel (Prasad and Saxena, 2004).
Rachana Parihar (2004) argued that there is a huge pool of skilled professionals
whether it is a bank or insurance company, who may be easily relocated for any

bancassurance venture. By leveraging their strengths and finding ways to

overcome their weakness, banks could change the face of insurance distribution.
Mekala Mary (2004) is of the opinion that there are two factors in India, which are
favourable for the success of bancassurance. First is that, the regulatory framework
is supportive of the channel. The second is the vast number of branches
established over the years through public policy.
Rakesh Agarwal (2004) argued that the bancassurer should move cautiously and
first fully establish sound IT systems for servicing of policy holders and see that
existing customers are served properly, otherwise the whole concept of
bancassurance would fail.
OBJECTIVES OF STUDY
 To study the awareness level of customers regarding banks selling insurance

products
 To study the factors affecting buying behavior of customers in purchasing
the insurance policies through the banks.
 To compare the type of policies customers purchase from the banks.
 To compare the satisfaction level customers purchasing insurance policies
through banks and insurance companies.
 To analyze the future buying pattern of the customers for insurance policies.
 To make SWOT analysis of Bancassurance.
 To study the image of bancassurance among the customers.
 To find the benefit that the customers get through Bancassurance.
 To investigate customer perception for reliability of Bancassurance channel
for buying insurance services.
STATEMENTS OF THE PROBLEM
Few years back, the bank was considered only as an intermediary between
the individuals to accept deposits and to give loans. Today the scenario has
changed; after the liberalization along with the normal facilities banks started
selling insurance products through the wide network it reaches every person in all

the nook and corner of our nation as “one stop shop” giving multiple services. It
helps the banks to attain extra revenue which in turn contributes to the GDP of the
nation. The present study focuses on the satisfaction level of customers who are the
back bone of bancassurance business in the banking industry based on certain
variables such as customer benefits, convenience, acquisition cost, value added
services and customers trust.
SCOPE OF THE STUDY
The Study has been undertaken in order to identify the customer‟s attitude
towards purchase of insurance products and their knowledge on the bancassurance
formats available through banks.
The study has been made to analyze the customer satisfaction towards
bancassurance by selected customer‟s of public and private sector banks.
METHODOLOGY
The methodology of study is made on two basis that is primary and

secondary data.
PRIMARY DATA: A structured questionnaire has been framed for interviewing

the customers.
SECONDARY DATA: It is collected from various publications, journal,

official websites and annual reports
SAMPLE DESIGN
 Sampling respondents - 30 respondents are taken for the survey.

 Sampling method - Random sampling method .
STATISTICAL TOOLS AND TECHNIQUES
MS WORD is used as a statistical tool and in order to get exact meaningful

information connected through questionnaire, some of the tools are used such as
tables, charts etc.

LIMITATION OF STUDY
 It was difficult to collect the respondent‟s opinion because some of the
respondents does not fully aware of the concept of bancassurance.
 Limited sample size is selected for the study.
 Respondents could have given biased answer.
Chapter Scheme
 The first chapter deals with introduction, review of literature, statement of the
problem, objectives of the study, scope of the study, methodology of the study.
 The second chapter deals profile of state bank of India
 The third chapter deals with the conceptual framework of bancassurance.
 The fourth chapter deals with data analysis and interpretation.
 The fifth chapter deals with findings, suggestions and conclusion.

Chapter – 2
Profile of State Bank of India
2.1 INTRODUCTION
State bank of India is an Indian multinational ,public sector banking

and financial services company. It is largest commercial bank in India in
terms of Assets,deposits,branches,customers and employees. It is a
government owned corporation with its headquarters in Mumbai,
Maharashtra.
As on 31stmarch 2017, government of India around 61.23% of
equity shares in SBI.life insurance corporation of India is the largest non-
promoter share holders in the company with 8.82% share holdings. The roots
th
of SBI lie in the first decade of the 19 century, when the bank of Bengal
was established on 2nd June 1806.Tne bank of Bengal of one of the three
presidency banks , the other two being bank of Bombay and bank of madras.
st
The SBI acquired a controlling interest in the imperial bank of india.on 1
July 1955,The imperical bank of India became SBI.In 2008 the government of
India acquired the reserve Bank of India stake in SBI so has to remove any
conflict on interest SBI is the first large scale consolidation in the Indian
banking industry .SBI non banking joint ventures are market leader on their
respective areas and provide wide ranging services, which includes life
insurance, mutual funds, merchant banking, credit cards, payment solutions,
custodial services making SBI group a truly large financial super market and
India,s financial icon. It is the leader in digital banking with highest number
of internet banking and mobile babking to customers.SBI gas arrangement
with over 1500 various international/local banks to exchange financial
messages through SWIFT in the all business centre of world.

HISTORY
The origin of the State Bank of India goes back to the first decade of
the nineteenth century with the establishment of the Bank of Calcutta in
Calcutta on 2 June 1806. Three years later the bank received its charter and
was re-designed as the Bank of Bengal (2 January 1809). A unique institution,
it was the first joint-stock bank of British India sponsored by the
Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank
of Madras (1 July 1843) followed the Bank of Bengal. These three banks
remained at the apex of modern banking in India till their amalgamation as
the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came

into existence either as a result of the compulsions of imperial finance or by
the felt needs of local European commerce and were not imposed from
outside in an arbitrary manner to modernize India's economy. Their evolution
was, however, shaped by ideas culled from similar developments in Europe
and England, and was influenced by changes occurring in the structure of
both the local trading environment and those in the relations of the Indian
economy to the economy of Europe and the global economic framework.
The establishment of the Bank of Bengal marked the advent of limited

liability, joint- stock banking in India. So was the associated innovation in
banking, viz. the decision to allow the Bank of Bengal to issue notes, which
would be accepted for payment of public revenues within a restricted
geographical area. This right of note issue was very valuable not only for
the Bank of Bengal but also its two siblings, the Banks of Bombay and
Madras. It meant an accretion to the capital of the banks, a capital on which
the proprietors did not have to pay any interest. The concept of deposit
banking was also an innovation because the practice of accepting money for
safekeeping (and in some cases, even investment on behalf of the clients)
by the indigenous bankers had not spread as a general habit in most parts of

India. But, for a long time, and especially up to the time that the three
presidency banks had a right of note issue, bank notes and government
balances made up the bulk of the investible resources of the banks.
The three banks were governed by royal charters, which were revised
from time to time. Each charter provided for a share capital, four-fifth of
which were privately subscribed and the rest owned by the provincial
government. The members of the board of directors, which managed the
affairs of each bank, were mostly proprietary directors representing the large
European managing agency houses in India.
ORGANISATIONAL STRUCTURE
The management of the State Bank1 vests in a Central Board of Directors

which consists of:
 A Chairman and a Vice-Chairman appointed by the Central

Government in consultation with the Reserve Bank of India.
 Two Managing Directors appointed by the Central Board of Directors

with the approval of the Central Government.
 Six directors to be elected in the prescribed manner by the

shareholders other than the Reserve Bank.
 Eight directors to be nominated by the Central Government in

consultation with the Reserve Bank of India to represent territorial and
economic interests in such a manner that not less than two of them
have special knowledge of the working of the cooperative institutions
and of rural economy and the others have experience in commerce,
industry, banking and finance;
 One director to be nominated by the Central Government;
 One director to be nominated by the Reserve Bank;

 Two directors to be appointed to represent the officers and the staff of

the bank.
The Chairman, the Vice-Chairman and the Managing Director shall

hold office for such terms not exceeding five years as the Central
Government may fix when appointing them and shall be eligible for re-
appointment. The directors elected by the shareholders and nominated by the
Central Government will hold office for fours years and are eligible for re-
election or re-nomination. The other nominated directors shall hold office as
per recommendations of the authority appointing them. Besides the Central
Board, there are Local Boards of Management established at Calcutta, New
Delhi, Kanpur, Ahmedabad, Bhopal and Patna. Each local board consists of
the members of the Central Board residing in the area and directors not
exceeding four elected shareholders whose names appear in the branch
register. To keep the management free from politics, the Act stipulates that no
member of the Central or State Legislatures shall be appointed as directors
of the State Bank of India. Structural changes have been introduced by the
bank in order to re-orient the business according to changing conditions in
the market. One such step, for the first time, was initiated in 1971. In the year
1979, for the second time the structural changes were implemented. The
major organizational change in structure took place in 1995, by the
appointment of Mc Kinsey Consultants. Through changes were introduced in
strategies, structures, systems etc., in the organizational set up of SBI, as per
recommendations of the consultant committee.
The Chairman is the Head of the Central Management Committee

who is appointed by the Government of India in consultation with RBI. The
Central Management Committee consisting of two Managing Directors – one
belonging to Corporate Banking and the other to National Banking – and
seven Deputy Managing Directors representing the areas such as Banks,
International Banking, Corporate Develo pment, Finance, Credit, Information
Technology, and Information and Management Audit. Along with the

Committee the Chief Vigilance Officer at CGM cadre, will also work under
the Chairman. The Managing Director and Group Executive of the Corporate
Banking are responsible for the banking operations relating to big size
companies and corporations. The Corporate Account Group (CAG) under the
leadership of the Managing Director and Group Executive caters to a majority
of top 100 companies/Corporations in Indian ranked in the order of turnover
and market capitalization. The credit sanction of Rs.100 crore and above per
company will fall under the jurisdiction of the managing director. The
National Banking Group is headed by a Managing Director and Group
Executive. This group consists of two distinct net works namely
Development Banking and Personal Banking Network and Commercial
Banking Network. About 90 per cent of the domestic deposits and 84 per cent
of the domestic advances account for National Banking. The State Bank of
India has seven Associate Banks and 7 subsidiaries one of them is Banking
Subsidiary and the other six are Non-Banking subsidiaries. One Deputy
Managing Director will monitor the activities of all Associate Banks and
Subsidiaries at the national level. Another Deputy Managing Director will co-
ordinate and promote International Banking through a net work of 83
overseas offices spread over in 33 countries covering all time zones. He is
responsible for handling the country‟s foreign trade and related business and
providing foreign currency resources to the Indian companies. The Deputy
Managing Director (Corporate Development) is concerned with the
development and growth activities of the bank. He is responsible for
developing new products and schemes from time to time. The Accounting and
Finance wing is headed by a Deputy Managing Director. He is also called
Chief Financial Officer. The compilation of financial data, preparation of
financial statement as per the regulations from time to time and monitoring
the performance of the bank on the financial front are his responsibilities.
One Deputy Managing Director will take care of Audit activities. The Deputy
Managing Director, Information Technology is responsible for IT operations

in the Bank. Considering the importance of IT to promote efficiency in

banking, this new position is created in the organization system at the top
management level. There is one Chief Vigilance Officer reporting to the
Chairman. The officer will look after the activities including fraud detection
and prevention of frauds. The disciplinary action against errant officials up to
the level of DGM will be taken by this office. The Chief Vigilance Officer
will maintain direct relations with Ministry of Finance, Government of India
and Vigilance Committee of Reserve Bank of India.
The State Bank of India has 14 Local Head Offices, which are also
called „Offices at the Circles‟ located at state head quarters. The heads of all
LHOs are directly responsible to the Chairman of the bank. A model
organization chart of a circle is shown in Exhibit No.3.2. The Circle Office
has the jurisdiction of all Modules of the bank attached to it. The sanctions of
above Rs.25 lakh and below Rs.100 crore are processed at the Circle Office.
The Chief General Manager will be assisted by four Circle Officers at the
DGM cadre in the areas of bank development, credit, finance and vigilance.
The General Manager Personal and Development Banking is assisted by
four Assistant General Managers (AGMs) in the areas of administration,
personal, development and expansion. The General Manager Commercial and
International Banking is assisted by four AGMs in the areas of premises,
computers, accounts and policy and decision making. There are 58 Modules
operated by the bank. Each module will be headed by Deputy General
Manager. The Modules will co-ordinate the activities of the bank through
regional offices. The heads of the regional offices and the branches headed by
AGMs will directly report to the DGM of a Module.
VISSION, MISSION, OBJECTIVES
1. Vision of state bank of India
 MY SBI.
 MY CUSTOMER FIRST.

 MY SBI: FIRST IN CUSTOMER SATISFACTION.
2. Mission of State Bank of India
 We will be prompt, polite and proactive with our customers.
 We will speak the language of young India.
 We will create products and services that help our customers achieve
their goals.
 We will go beyond the call of duty to make our customers valued.
 We will be of service even in the remotest part of our country.
 We will offer excellence in service to those abroad as much as we do

to those in India.
 We will imbibe state of art technology to drive excellence.
3. Strengths of State Bank of India
 Largest commercial bank in the country with presence in all time zones
of the world.
 Macroeconomic proxy for the Indian Economy.
 Has emerged as a Financial Services Supermarket
 Group holds more than 25 per cent market share in deposits and
advances
 Large base of skilled manpower
 SBI Group has more than 115 million customers – Every tenth Indian
is a customer.
4. Values of SBI
The values of State Bank of India are:

 We will always be honest, transparent and ethical.
 We will respect our customers and fellow associates.
 We will be knowledge driven.
 We will learn and we will share our learning.
 We will never take the early way out.
 We will do everything we can to contribute to the community

we work in.
 We will nurture pride in India.
GROWTH AND DEVELOPMENT
The progress of the State Bank of India is explained in terms of

Assets, Deposits, Loans and Advances, Income, Expenditure, Net Profit,
Branch Network, Number of Employees, Business per Employee and Profit
per Employee.
The total assets of the bank valued at Rs. 348228.25 crore in 2001-02
registered an upward growth year by year and by the end of the year 2011-12
the value of the assets stood at Rs. 1335519 crore. In other words, the assets
of the bank registered a growth of 283.351 per cent during the decade. The
assets of the bank are in the form of advances, investments, balance with bank
and money at call and short term notice, cash in hand and balance with RBI,
fixed assets and other assets. Advances constitute major part of the total
assets. The share of which varied between 34.69 per cent and 64.96 per cent
during the period. The share of advances to the assets showed an increasing
phenomenon during the years from 2009-10 to 2010-2011. Investments
occupy second place with a share varied between 24.25 per cent and 45.85 per
cent during the period. The share of this asset was the lowest in 2011-12.
The share of cash in hand and balance with RBI varied between 3.39 per cent
and 7.71 per cent during the period, while the share of balance with bank and

money at call and short term notice varied between 2.21 per cent and 12.36
per cent. The share of fixed assets was less than one per cent. The share of
other assets varied between 4 per cent and 6.15 percent.
The deposits of SBI during the period of the study increased from
Rs. 270560.14 crore in 2001- 02 to Rs. 1043647.36 crore in 2011-12 and
recorded a growth of 285.73 per cent. Table 3.9 presents the growth of
deposits during the period 2001 -02 to 2011-2012. The bank has three types
of deposits namely, term deposits, savings bank deposits and demand
deposits. Term deposits occupied a major share when compared to the other
two savings bank deposits and demand deposits. The share of term deposits
varied between 15.24 per cent and 63.52 per cent during the period. The
savings bank deposits occupied the second position with its contributed share
ranging between 20.84 per cent and 35.37 per cent respectively. Further, the
share of demand deposits varied between 15.12 per cent and 18.66 per cent
during the period. Further, it can also be seen that the share of term deposits
is declining from the 2003 -04 onwards, whereas the share of savings bank
deposits is on the increase.
The data relating to the loans and advances of SBI during the period
2001- 02 to 2011-12 is the total loans and advances were at Rs.120806.47
crore in 2001 -02 and increased to Rs. 867578.89 crore in 2011-12 thus
recording a growth of 618.16 per cent. The loans and advances of SBI are of
three types: bills purchased and discounted, cash credits and over drafts and
term loans. The cash credits and overdrafts share of the total loans and
advances in the year 2002-03 was 69116.8 (50.17 %) and was 374143.24
(43.12 %) by the year 2011- 2012. The share of term loans of the total loans
and advances has captured a major part. The share of the term loans which
was 37.31 in the year 2001-02 increased to 48.3 per cent in 2010-11
The total income earned by SBI during the period 2001-02 to 2011-12
has increased from Rs. 33,984.58 crore in 2001-02 to Rs. 120872.89 in 2011-

12. The income of the bank has increased by 255.67 per cent. As can be seen
from the table the total income earned by the bank has registered the highest
growth rate of 32.67 per cent for the year 2008-09. The lowest growth of
income was in the year 2006-07 with a growth rate of 1.91 per cent. From
the table it can be stated that though the growth in income over the years is
positive but was fluctuative.
The total income earned comprises of the interest earned by SBI and
other income. The share of interest earned to the total income earned
ranged from 80.01 per cent to 88.13 per cent. The share of the other income
varied from 12.28 per cent to 19.99 per cent. The major share of the two in
the total income earned was more for the interest earned when compared to
other income The total expenditure of the bank was Rs. 31552.95 crore in
2001-02 increased to Rs. 109165.61 crore by the year 2011-12 recording an
increase of 245.98 per cent. The percentage increase over the previous years
varied from 1.78 per cent to 51.24 per cent.
The total expenditure incurred comprises of the interest expended,

operational expenses, and provisions and contingencies. The interest
expended by the bank is the major expenditure item. The share of the interest
expended in the total expenditure varied from 51.19 per cent to 65.70 per
cent. The share of the operational expenses in the total expenditure varied
from 22.85 per cent to 30.24 per cent. The provisions & contingencies share
varied from 11.45 per cent to 19.2 per cent.
The net profit of the bank was Rs. 2,432 crore in the year 2001-02
and increased to Rs. 11707 in the year 2011-12. The bank registered a decline
in profits in the year 2009-10. The growth in the net profits of SBI varied
from 2.36 per cent to 48.18 per cent. The highest growth rate in the net profit
was 48.18 per cent in the year 2007-08.
The branches of State Bank of India are spread out all over the country
in different locations. The total number of branches was 9,085 in the year

2001-02 which increased to 14,270 by the year 2011-12. The number of

foreign branches is 51 in the year 2001-02 and increased to 173 in the year
2011-12.
The profit per employee was Rs.115.82 thousands in the year 2001-02
increased to Rs.531 in the year 2011-12. The profit per employee in the years
2009-10 and 2010- 11 showed a negative growth rate over the previous
years. The percentage growth of the profit per employee varied from 4.33
per cent to 65.71 per cent
The business per employee increased from Rs. 17,300 thousands in the year
2001-02 to Rs. 70,465 in the year 2010-11. The growth over the previous
year varied from 10.40 per cent to 27.73 per cent
The return on average assets was 0.73 per cent in the year 2001-02
and 0.88 in the year 2011-12. The years 2007-08 and 2008-09 recorded an
increase in the return on the average assets. The return on equity was
fluctuating for the period from 2001 -02 to 2011-12. It varied from 12.84
per cent to 18.19 per cent. The operating expenses to total income varied
from 46.62 per cent to 58.70 per cent.
The earning per share also witnessed sharp fluctuations for the period
and varied from Rs.46.20 to Rs. 184.31. The capital adequacy ratio varied
between 11.88 per cent to 13.54 per cent. The net NPA to Net Advances was
5.63 in the year 2001-02 and gradually decreased to 1.82 in 2011-12.
AWARDS AND ACHIEVEMENTS
 SBI was ranked as the top bank of India based on tier 1 capital by The
BANKER magazine in a 2014 rankings
 SBI was ranked 232nd in the Fortune Global 500 rankings of the
world‟s biggest corporations for the year 2016.
 SBI was named the 29th most reputed company in the world according

to FORBES 2009 rankings.

 SBI was 50th most Trusted brand in India as per the Brand Trust
Report 2013, an annual study conducted by Trust Research Advisory,
a brand analytics company and subsequently, in the Brand Trust
Report,2014.SBI finished as India‟s 19th most tusted brand in India.
 SBI has won the prestigious Asian Banker Achievement Award for
being the strongest bank in Asia Pacific region, institute by the Qatar
Financial center Authority and Asain Banker magazine.
 SBI has won the best bank award for use of technology for financial
inclusion and Best bank award for electronic payment system, among
large banks, in IDRBT banking technology excellence awards held on
1stsep 2017.

Chapter – 3
Conceptual framework
3.1 INTRODUCTION
Bancassurance refers to the selling of insurance policies through a bank. In

this process, the bank and insurance company collaborate to provide insurance in
the market through bank‟s distribution networks. Due to increase in competition
after liberalization, the financial industry has used this growth strategy to best utilize
their same channels to sell multiple financial products. Bancassurance has become
significant around the world, specifically in European countries. It has got its
importance in Indian market too. In India a number of banks have joined hands with
insurance companies and vice versa to use this Bancassurance model to sell selected
products. It has become a win-win strategy because banks earn commission by
selling insurance products through low cost of infrastructure and better prices of
products. Insurance companies get the benefit of distribution channels through bank
branches. It helps them to sell their products in a convenient way. The success of
this model mostly depends on banker-customers relationship over a period of time.
This relationship motivates them to purchase insurance products apart from
banking products and services. The rest of the paper is organized as follows:
Section 2 provides background of the topic, definition and concepts relating to
various aspects of the study. This Section also discusses the empirical literature on
mergers and acquisitions and Bancassurance and closes with the rationale of study.
Section 3 provides the overview of research methodology focusing on the Objective
of Study, Period of Study, Data and Sample for Analysis, Tools and Variables for
Analysis and Sample Characteristics.
Need of Bancassurance in India Indian economy is a growing economy

where the number of middle class families is increasing. RBI recognized the need to
expand the financial reach so as to meet development criteria in today‟s global
environment. To expand financial reach, bancassurance is one step. Bancassurance
is supported in India because: 1. It helps the banking industry to widen its area of
working which may reach to every corner of the nation. 2. It helps development and

enhancement of channels through which insurance products can be made available

to every person of India. 3. It facilitate competition among private insurance
companies and thus best possible and effective products availability to Indians.
India has banking system with an extensive, branch recognition, credibility and
profitability in customers‟ operations. This is advantageous for insurance compani
es to sell their products through banking channels. Moreover banking and insurance
industry are two parameters of a healthy economy which can attract foreign
investment. So the collaboration of these two sectors make an attractive base for
overall economic development. In liberalized era, banks are also facing the heat of
competition from financial and non-banking financial institutions. Banks are to
look for other sources of income to maintain and sustain profitability. Indian
Banking system was prone to NPAs in 1990s which were reduced sharply till 2010.
Bancassurance is still an opportunity for enhancement of earnings with no more
risk of increase in NPAs.
Regulations on BancassuranceIn India, Bancassurance gained recognition in

2000. Government of India issued a notification specifying „Insurance‟ as a
permissible form of business for banks under section 6 (1) (o) of Indian Banking
Regulation Act, 1949. As per this, any bank intending to undertake insurance
business can do the same with specific approval from RBI. Scheduled Commercial
Banks can enter insurance business only as insurance agents on fee basis without
any risk participation. A specific criterion has been framed for banks to enter into a
joint venture with insurance companies, which is as under: 1. Minimum net worth
of the bank should be Rs. 500 crore. 2. The CRAR of the bank should not be less
than 10 percent. 3. Level of NPAs should be reasonable. 4. The bank should have
net profit for the last three consecutive years. 5. The track record of the subsidiaries,
if any, should be satisfactory.
Banks which are not eligible for joint venture as per above mentioned
criteria can make an investment up to 10% of the net worth of the bank or Rs. 50
crore whichever is less, in insurance company to provide infrastructure and
support services. Subsidiaries of banks are not allowed to enter insurance business
on risk participation basis. Every bank needs to obtain prior RBI approval for
entering into insurance business. RBI grants such permission on case to case basis.

IRDA is also heading to provide open architecture bancassurance and has allowed
banks to tie up with a maximum of 9 insurers from three segments- life, non-life
and standalone health insurers-as a part of the new bancassurance guidelines
ADVANTAGES OF BANCASSIRANCE
Bancassurance helps bank customers to be aware of insurance policies available and

get to buy them for more competitive prices through widely distributed banking
networks. It results in more strong relationship between bank customers and banks.
On the same time, banks may have to compromise on data security while sharing
customer database with insurance companies. Moreover customers may get
confused on choice of products (competing products) being offered by banks and
insurance companies. Banks need to be more proactive on customer service
requirements.
 Advantages to customers
Customers can have a variety of products under one roof. They get risk coverage at
bank itself. They can get help in taking more informed decisions on finance
management. They are at ease to get renewals through executing standing
instructions.
 Advantages to banks
Banks get more non-interest income. They can get new customers and increase
penetration on their existing customer databases. Bancassurance results in better
bank- customer relations and thus increasing profitability for banks.
 Advantages to Insurance companies
Insurance companies get greater geographical reach through bank‟s network at

relatively lower cost. Companies get credibility in customers‟ mindset by
associating with banks. There are benefits of easy renewals and less chance of lapse
incidences. Companies can enjoy the potential of cross selling, up selling including
depth and width. It becomes easy to attract walk in customers of bank towards
insurance products. Moreover co-branded products like fire policy for home loans
can be made available to benefit all the stakeholders.

 Advantage to issues of bancassurance Banks
It needs to have developed infrastructure for taking up and maintaining the

innovative and strategic products like bancassurance. Public sector banks, RRBs and
Co- operative banks need to do more in this context. They have to develop requisite
IT structure to monitor premium renewals, premium lapses, premium sourced and
policies taken and their persistency. A large proportion in Indian population is under
effect of inflationary pressure so the companies must consider this when formulating
their product policies. Moreover banks and insurance companies have to work upon
to improve communication with customers. Customers need to be informed about
bancassurance, new policies, conditions and updates. Bank staff should be
motivated to enhance bancassurance through product development, product
training, product awareness and commission as incentive. Though Regulatory bodies
are doing well in promotion of bancassurance, still there is a lot to do in order to
improve customer reach and win their trust.
Government of India and regulatory bodies are resorting to reach every

doorstep in the country to ensure 100% financial inclusion through different
schemes such as PMJDY (PradhanMantry Jan DhanYojna), Micro-insurance and
microfinance. In such an environment, Bancassurance would be a great base on
which the pillars of 100% financial inclusion can be constructed. Bancassurance is
going to be a win-win situation for all the stakeholders. With a number of benefits,
bancassurance is expected to be a part and parcel of upcoming financial
supermarket which is emerging rapidly in developed and developing countries.
CONSUMER PERCEPTION REGARDING LIFE

INSURANCE POLICIES
Insurance companies play an important role in the welfare of human well-

being by providing protection to millions of people against life risks such as
uncertain death or accident. Even the life insurance is fastest growing service sector
in India after privatisation and increase in FDI. Thus it has become essential to
study the buying pattern of the life insurance policies. The current study examines
the various factors that affect the consumer perception towards life insurance policy.
Data was collected with the help of structured questionnaire. The sample constituted

of 100 respondents from Amritsar , Ludhiana and Chandigarh. The statistical

technique used for the analysis are descriptive and factor analysis. The main finding
of the study reflected that there are six factors i.e. customized and timely services,
better company reputation, effective service quality , customer convenience ,
tangible benefits and healthy customer client relationship that influence the
consumer perception towards life insurance policy Keywords: Consumer Perception,
Life Insurance Policies, Factors.
Human life is a most precious asset and life insurance is one of the ways
which provides financial protection to a person and his family at the time of any
disaster. Life insurance provides both safety as well as protection to individuals and
also boosts savings among people. Insurance companies play an important role in
the welfare of human well-being by providing protection to millions of people
against life risks such as uncertain death or accident.
LIC is the most trusted and popular brand in life insurance, the market share of
private insurers are gradually increasing with people trust. The new private players
offer many new innovative products and services. They are increasing the awareness
level among consumers by using innovative and new techniques of advertisement,
introducing new products, increasing penetration of life insurance of consumers in
uninsured markets. The competition among public and private players has helped to
increase in variety of products being offered from pure risk based to ULIP plans.
Customers are the back bone of life insurance business. Every company tries to
attract new customers and retain existing customers in order to keep their profits
high. This helps insurance companies to maintain a good competitive edge on its
competitors.
NEED FOR LIFE INSURANCE IN INDIA
 In order to meet family financial requirements-
In case we are the only person in our family who is an earning member, then the
family income will cease when you are no more. if any mis happening occurs, then
with notable source of income,the standard of living of family members will fall and
then may not be able to meet even basic needs like education therefore your life

insurance policies will help your family during such times.
 For Loans and Expenses Repayment-
You may have The life insurance business started in India in1818 with the taken a
loan or you may have borrowed money from a establishment of the Oriental Life
Insurance Company in friend for starting a business. Also, you might have Calcutta.
This Company however failed in 1834 with several other family responsibilities. In
all these cases it passage of time. In 1829, the Madras Equitable began is your
spouse or children who will have to bear the transacting life insurance business in
the Madras heavy burden of paying off the loan in your absence
 Diverse Investment Options-
we can also use your life insurance Policy as a good investment tool. There are
various kinds of insurance policies in which you can park your surplus funds and
can earn return either in lump sum or at regular intervals of time. For example,
retirement plans, child insurance plans, Term life insurance plans etc. are all life
good life insurance policies.
 Illnesses and Accidents-
Life insurance policies are always a very good protection option as well against the
financial pressure that you might face during a serious illness or accident. It helps
you to get treatment from the of hospitals without worrying about the financial
burden. Usually all insurance policies purchased when you are young and free of
illnesses.
 For Tax Benefits-
Life insurance policies are excellent instrument of saving tax too. Under Section
80C of the IT Act, many of the insurance schemes in India including the life
insurance schemes offer tax deduction on premium payment.
 Draw Loans Against Insurance –
Besides using your life insurance Policy amount to repay your loans and expenses
.you can also use your policy to draw a loan against it. It could be used as security in

banks or financial institutions while taking loans.
INFORMATION RELATED TO PUBLIC AND PRIVATE LIFE

INSURANCE
The insurance sector, along with other elements of marketing, as well as financial
infrastructure have been touched and influenced by the process of liberalization and
globalization in India. The customer is the king in the market. Life insurance
companies deal in intangible products. With the entry of private players, the
competition is becoming intense. In order to satisfy the customers, every company is
trying to implement new creations and innovative product characteristics to attract
customers. Keeping this in mind, the present study is designed to analyze the
innovation in Life insurance sector in India.
“Consumer awareness towards life insurance sector in India”, ABHINAV

International Monthly Refereed Journal of Research in Management & Technology
(2014), 3(3), 45-51. “Intruders altering the perception of customers in the Life
Insurance Sector of India – a comparative empirical study between public &
private life insurance companies”, International journal of research in commerce
& management (2011), 2(8),
It was found in the Indian context that the insurance habits among the
general public during the independence decade was rare but there was a remarkable
improvement in the Indian insurance industry soon after the economic reform era
due to healthy competition from many national as well as international private
insurance players. In this study attempt has been made to analyze the investors‟
perceptions towards public and private life insurance companies in India with
special reference to Karnataka.
It was determined that the deregulation of the Indian Insurance market, low
insurance market penetration and the anticipated potential of the Indian insurance
industry make it an attractive opportunity for private entrants. With the progress of
IRDA reforms and enactment of IRDA act 1999, liberalization of the insurance
market in India gave entry to many private insurers, resulting in drastic changes in
respect to people‟s choice of companies. With the expansion of the market,

insurance penetration and density of the country have been improves, leading to a
competition within the companies in terms of policies sold, collection of premium
income, first premium income, market share, settlement of claims and others. In
India life insurance is regarded as more than a mere risk cover and is considered an
important avenue of investment. Indian investors therefore, evaluate the past track
record and risk potential of an Insurer before taking a policy investment decision. In
this study an attempt has been made to analyze the investors‟ risk perceptions
towards public and private life insurance companies in India with special reference
to Madhya Pradesh. The study has been conducted with the help of a structured
close-ended questionnaire which was administered to 200 potential investors who
have already made investment in life insurance policy. Necessary statistical tools
such as percentage and ranking method have been used for the purpose of data
analysis and comparison. The study expects to reveal that although a number of
private insurance companies have entered the Indian life insurance market, but Life
Insurance Corporation of India still seems to be the first choice for many of the
investors due to its strong brand image and the perceived safety that is associated
with it.
Rao (2014)12 explained that liberalization of the financial services sector has led to
insurance companies functioning increasingly under competitive pressures; so
companies are consequently directing their strategies towards increasing customer
satisfaction and loyalty through improved service quality. With the opening of
insurance industry to private players, the competition has intensified and it has
become very difficult for the companies to attract and retain the policyholders.
Every company has recognized the need for shifting from a traditional strategy to
survive in the market. It is in this context, the process of CRM has been adopted
by all private and public sector insurance companies as well. CRM technologies and
campaign management tools are maturing and finding wider adoption with large
insurance companies. This study is an endeavor to examine and evaluate the various
CRM initiatives in life insurance companies and compare the strategies used by
public sector LIC with private sector companies.
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. Bancassurance if
taken in right spirit and implemented properly can be win-win situation for the all
the participants' viz., banks, insurers and the customer.
MODELS OF BANCASSURANCE
a) Structural Classification
 Referral Model
Banks intending not to take risk could adopt „referral model‟ wherein they merely
part with their client database 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 bank 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.
 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
reputation 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, and 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.
 Insurance as Fully Integrated Financial Service/ Joint Ventures
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 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.
b) Product based classification
 Stand-alone Insurance Products
In this case, bancassurance involves marketing of the insurance products through

either referral arrangement or corporate agency without mixing the insurance
products with any of the banks‟ own products/ services. Insurance is sold as one
more item in the menu of products offered to the bank‟s customer, however, the
products of banks and insurance will have their respective brands too.
 Blend of Insurance with Bank Products
This method aims at blending of insurance products as a „value addition‟ while

promoting the bank‟s own products. Thus, banks could sell the insurance 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.
c) Bank Referrals
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 everywhere as the banks get
commission, the insurance companies get databases of the customers and the
customers get the benefits.
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 Banks
As a source of fee based 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 and growth
has been 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.
 Product Diversification
In terms of products, there are endless opportunities for the banks. Simple term life
insurance, endowment policies, annuities, education plans, depositors‟ insurance
and credit shield are the policies conventionally sold through the Bancassurance
chan nels. Medical insurance, car insurance, home, contents insurance, and travel
insurance are also the products, which are being distributed by the banks. However,
quite a lot of innovations have taken place in the insurance market recently to
provide more and more Bancassurance-centric products to satisfy the increasing
appetite of the banks for such products. Insurers who are generally accused of
being inflexible in the pricing and structuring of the products have been
responding too well to the challenges (say opportunities) thrown open by the
spread of Bancassurance. They are ready to innovate, experiment, and have set up
specialized Bancassurance units within their fold. Examples of some new and
innovative Bancassurance products are income builder plan, critical illness cover,
return of premium and Takaful products, which are doing well in the market.
Building close relations with the customers Increased 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 customer means
enhanced customer satisfaction. For example, through bancassurance a customer
gets home loans along with insurance at one single place as a combined product.
Another important advantage that bancassurance brings about in banks is
development of sales culture in their employees. In addition, 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
At present, there are many insurance companies in India. Because of the

Liberalization of the economy, it became easy for the private insurance companies
to enter into the battlefield, which resulted in an urgent need to outwit one another.
Even the oldest public insurance companies started facing the tough competition.
Hence, in order to compete with each other and to stay a step ahead there was a
need for a new strategy in the form of Bancassurance. It would also benefit the
customers in terms of wide product diversification.
 High cost of agents
Insurers have been tuning into different modes of distribution because of the high
cost of the agencies services provided by the insurance companies. These costs
became too much of a burden for many insurers compared to the returns they
generate from the business. Hence there was a need felt for a Cost-Effective
Distribution channel. This gave rise to Bancassurance as a channel for distribution
of the insurance products.
 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 a wide scope of business for the insurers. In order to fulfill all the needs
bancassurance is needed.
 Multi channel Distribution
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.
 Targeting Middle income Customers
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 agents. through the venture with banks, the insurance companies
can recapture much of the underserved market. so in order to utilize the data base of
banks middle income customers, there was a need felt for bancassurance
BENEFITS OF BANCASSURANCE
1. To Banks
2. To Insurance companies
3. To Customers
To Banks
 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, telebanking, direct
mail & so on. they can also use all the above- mentioned facility for Bankassurance
purpose with customers & non- customers.
 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.
To Insurers
 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.
To Customers
 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.
DISTRIBUTION CHANNELS:
Bancassurers have been making use of various distribution channels, they are:
1. Career agents
2. Special advisers
3. Salaried agents
4. Corporate agency & Brokerage firm
5. Direct response
6. Internet
7. E- Brokerage
8. Outside lead generating techniques
 Career Agents:
Career Agents are full-time commissioned sales personnel holding an agency

contract. They are generally considered independent contractors. Consequently, an
insurance company can exercise control only over the activities of the agent, whic
h 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:
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 personalized and high quality
service. Usually Special advisors are paid on a salary basis and they receive
incentive compensation based on their sales.
 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 salary
 Corporate Agencies and Brokerage Firms:
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:
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.
 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.
 E-Brokerage
Banks can open or acquire an e-Brokerage arm and sell insurance products from
multiple insurers. The changed legislative claim 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.
 Outside Lead Generating Techniques:
One last method for developing bancassurance eyes involves "outside" lead
generating techniques, such as seminars, direct mail and statement inserts. Great
opportunities await bancassurance partners today and, in most cases success or
failure depends on precisely how the process is developed and managed inside each
financial institution.
KEY DRIVER OF BANCASSURANCE
Banks are seeking ways to raise additional earnings without commitment of

additional capital in a low interest rate environment; increased competition; reducing
margin. Insurance Companies are seeking new customers using new distribution
activities to reach such segment. e, the biggest driver in India is different at present.
banks are seeking an alternative method of redeploying their surplus workers. Of
course, this is a one time only phenomenon.
Therefore, over time, we will see other factors that have played important roles in
other countries will also play out in India. It might be instructive to examine what
succeeded in America for the expansion of bancassurance business. A survey by
LIMRA identified the following elements for success of bancassurance:
 Strength of the Brand.

 Sales Staff Management/Training.
 The Branch Network/Geographical Coverage.

 Bank and Insurance products form a complementary range.

 Single view of the customer.
 Focus on Customer Service/satisfaction.
 Use of Customer Relation Management Tools and Techniques.
 Integration of the bank and insurance organizations producing a single culture.
 Providing advice/solutions, not selling products
REQUIREMENTS FOR SUCCESS OF BANCASSURANCE
 Attractive Insurance Product Base

 Cost-Efficient Distribution System
 Linked and Leveraged Bank and Insurance Products
 Concurrent Sale of Bank and Insurance Products
 Appropriate Structure Based on Level of Integration between Bank and Insurer
STATE BANK OF INDIA AND BANCASSURANCE
1. SBI Life Insurance (profile)
2. Products offered
3. SBI Life Insurance (perspective)
SBI Life Insurance is a joint venture between the State Bank of India and Cardif
SA of France. SBI Life Insurance is registered with an authorized capital of ` 1000
croreand a paid up capital of ` 500 crores. SBI owns 74% of the total capital and
Cardif the remaining 26%. 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 f 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
Insurance‟s mission is to emerge as the leading company offering a comprehensive

range of Life Insurance and pension products at competitive prices, ensuring high
standards of customer service and world class operating efficiency. SBI Life has a
unique multi-distribution model encompassing.
TRENDS AND CHALLENGES
 Trends
However, 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. Some bancassurers are also beginning to focus
exclusively on distribution. In some markets, face-to-face contact is preferred,
Which tends to favor bancassurance development. 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 by and large are resorting to either „referral models‟ or „Corporate agency
model‟ to begin with. 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
1) 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.
2) Human Resource Management has experienced some difficulty due to such

alliances in financial industry. Poaching for employees, increased
workload, 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 fir mare 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.
3) 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.
BANCASSURANCE IN INDIA - A SWOT ANALYSIS
Even though, banks and insurance companies in India are yet to exchange their
wedding rings, Bancassurance as a means of distribution of insurance products is
already in force in some form or the other. Banks are selling Personal Accident and
Baggage Insurance directly to their Credit Card members as a value addition to their
products. Banks also participate in the distribution of mortgage linked insurance
products like fire, motor or cattle insurance to their customers. Banks can
straightaway leverage their existing capabilities in terms of database and face-to-
face contact to market insurance products to generate some income for themselves,
which hitherto was not thought of. Once Bancassurance is embraced in India with
full force, a lot will be at stake. Huge capital investment will be required to create
infrastructure particularly in IT and telecommunications, a call center will have to be

created, top professionals of both industries will have to be hired, an R & D cell will
need to be created to generate new ideas and products. It is therefore essential to
have a SWOT analysis done in the context of Bancassurance experiment in India.
 Strengths
In a country of 1 Billion people, sky is the limit for personal lines insurance
products. There is a vast untapped potential waiting to be mined particularly life
insurance products. There are more than 900 Million lives waiting to be given a
life cover. There are about 200 Million households waiting to be approached for a
householder's insurance policy. Millions of people traveling in and out of India can
be tapped for Overseas Mediclaim and Travel Insurance policies. After discounting
the population below poverty line the middle market segment is the second largest in
the world after China. The insurance companies worldwide are eyeing on this, why
not we preempt this move by doing it ourselves?
Our other strength lies in a huge pool of skilled professionals whether it is banks or
insurance companies who may be easily relocated for any Bancassurance
venture. LIC and GIC both have a good range of personal line products already lined
up; therefore, R & D efforts to create new products will be minimal in the beginning.
Additionally, GIC with 4200 operating offices and LIC with 2048 branch offices are
almost already omnipresent, which is so essential for the development of any
Bancassurance project.
 weakness
The IT culture is unfortunately missing completely in all of the future collaborators

i.e. banks, GIC & LIC. A late awakening seems to have dawned upon but it is a
case of too late and too little. Elementary IT requirement like networking (LAN) is
not in place even in the headquarters of these institutions, when the need today is of
Wide Area Network (WAN) and Vast Area Network (VAN). Internet connection is
not available even to the managers of operating offices.
The middle class population that we are eyeing at are today overburdened, first by
inflationary pressures on their pockets and then by the tax net. Where is the
money left to think of insurance? Fortunately, LIC schemes get IT exemptions but

personal line products from GIC (mediclaim already has this benefit) like
householder, travel, etc. also need to be given tax exemption to further the cause of
insurance and to increase domestic revenue for the country.
Another drawback is the inflexibility of the products i.e. it can not be tailor made
to the requirements of the customer. For a Bancassurance venture to succeed it is
extremely essential to have in-built flexibility so as to make the product attractive
to the customer.
 Opportunities
Banks' database is enormous even though the goodwill may not be the same as in
case of their European counterparts. This database has to be dissected variously
and various homogeneous groups are to be churned out in order to position the
Bancassurance products. With a good IT infrastructure, this can really do wonders.
Other developing economies like Malaysia, Thailand and Singapore have already
taken a leap in this direction and they are not doing badly. There is already an
atmosphere created in the country for liberalization and there appears to be a politica
l consensus also on the subject. Therefore, RBI or IRA should have no hesitation in
allowing the marriage of the two to take place. This can take the form of merger or
acquisition or setting up a joint venture or creating a subsidiary by either party or
just the working collaboration between banks and insurance companies.
 Threats
Success of a Bancassurance venture requires change in approach, thinking and work

culture on the part of everybody involved. Our work force at every level are so well
entrenched in their classical way of working that there is a definite threat of
resistance to any change that Bancassurance may set in. Any relocation to a new
company or subsidiary or change from one work to a different kind of work will be
resented with vehemence. Another possible threat may come from non-response
from the target customers. This happened in USA in 1980s after the enactment of
Garn - St Germaine Act. A rush of joint ventures took place between banks and
insurance companies and all these failed due to the non-response from the target
customers. US banks have now again (since late 1990s) turned their attention to
insurance mainly life insurance. The investors in the capital may turn their face off

in case the rate of return on capital falls short of the existing rate of return on capital.
Since banks and insurance companies have major portion of their income coming
from the investments, the return from Bancassurance must at least match those
returns. Also, if the unholy alliances are allowed to take place there will be fierce
competition in the market resulting in lower prices and the Bancassurance venture
may never break-even.
Bancassurance –Taking the lead
In the last financial year, India has experienced a substantial growth in the life
insurance business. The new business premium growth rate for the current year
over the previous financial year is 36%. This growth is primarily due to the
aggressiveness witnessed in the private life insurance sector, which grew by
129%. One of
the drivers for this substantial growth is the contribution of the banking industry.
The private life insurers have been instrumental in building strong relationships with
established banks for bancassurance. The bancassurance model, in simple terms
means distribution of insurance products by banks to their customers. Apart from
having the advantage of reaching out to the potential customers at the remotest of
places, it offers a complete basket of financial advice to customers under one roof.
Bancassurance has been a successful model in the European countries contributing
35% of premium income in the European life insurance market. It contributes over
65% of the life insurance premium income in Spain, 60% in France, 50% in Belgium
and Italy. In the US, the banks were earlier not allowed to sell insurance due to the
restrictions imposed by Glass-Stegall Act of 1933, which acted as a Chinese wall
between banking and insurance. As a result of this life insurance was primarily sold
through individual agents, who focused on wealthier individuals, leading to a
majority of the American middle class households being under-insured. With the
repealing of this Act in 1999, the doors were opened for banks to distribute
insurance and cater to the large middle class segment In the Asian markets,
bancassurance has a limited share of the sales primarily because of the near
monopoly of the life agents in Japan, which is the largest life market. But there is a
shift in stance with markets like Japan, South Korea and the Philippines where
bancassurance was previously prohibited, taking a more accommodating stance

towards this channel. It has been estimated that bancassurance would contribute
almost 16% of the life premium in the Asian markets in the year 2006 primarily
due to the growth expected in India and China.
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
PROBLEMS IN BANCASSURANCE
Any bank getting into business of selling insurance cannot afford to have casual
approach to it. The staff, if deputed from within the existing bank staff, will have
to be specially trained in the intricacies of insurance and the art of salesmanship.
These skills will be required at levels different from the requirements in banking
operations . They will have to be persons who have an external orientation. The
amount of business acquired through the banks depends entirely on the personal
skills of specified persons and the corporate insurance executives. An effective and
successful specified person might perhaps find it more remunerative to branch off
as an insurance agent on his own, instead of being tied to the bank. The options
available to the bank to prevent this may lie in developing attractive compensations
packages. The relevant issues will be the restrictions imposed by insurance Act as
well as relative pressures within the unions of banks of employees. The commitment
of senior management is crucial to the success of the persons deputed for the
insurance work. The priorities for the managers may depend on the criteria by
which they will be appraised at the end of the year. If the progress in insurance is not
important criterion, the support to the insurance activities may be reduced. They
would see mainstream banking activities as more important for their own future
growth. The appraisal and reward systems of the bank have to be appropriately
aligned.
FUTURE OF BANCASSURANCE
By now, it has become clear that as economy grows it not only demands stronger

and vibrant financial sector but also necessitates providing with more sophisticated
and variety of financial land 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.
To be fruitful, it is vital for bancassurance to ensure that banks remain fully

committed to promoting and distributing insurance products. This commitment has
to come from both senior management in terms of strategic inputs and the
operations staff who would provide the front-end for these products.

Chapter – 4
Data analysis and interpretation
INTRODUCTION
The purpose of conducting survey is to obtain the opinions of the customers.

the questionnaire has distributed to the respondents in different area and requested
to fill it and to return to me.
The survey has been successfully carried out and the respondents fill the
questionnaire regarding banc assurance .the information collected from the
respondents is tabulated, processed and analyzed to get some meaningful inferences.
The detail analysis of data collected during survey is presented.

Table 4.1: -Classification of respondents on the basis of Gender
Particulars No. of Respondents Percentage(%)

Male 18 60
Female 12 40
Total 30 100
(Source:- Field Study)
Analysis
From the above data clearly shows that out of 30 respondents,60% of

respondents comes under Male category and 40% of respondents comes
under Female category.
Interpretation
It can be interpreted that, majority of respondents comes under Male category.

Because they are the earning members and they hold Account in bank.
2
Total
Table 4.1: -Gender of the

Respondents No. of
Female Respondents
Table 4.1: -Gender of the
Respondents Percentage
(%)
1
Male
0 50 100 150
Figure 4.1: - Representation of chart on the basis of gender .

Table 4.2: Classification of respondents on the basis of Age.
Paticulars No. of Respondents Percentage

20-30 years 8 27
31-40 years 9 30
41-50 years 7 23
50 and above 6 20
Total 30 100
(source:-Field survey) Analysis
Analysis
From above table it clearly explains that , 27% of respondents are
belongs to the 20-30 age group,30% of respondents are belongs to the 31-40
age group,23% of respondents are belongs to the 41-50 age group, and
remaining 20% of respondents are belongs to the 50 and above age group.
Interpretation
It can be interpreted that majority of respondents are belonging to the

age group of 31-40 years. They are the young people to open their accounts.
120
100
80
Table 4.2: Age of the
60 Respondents No. of
Respondents
40
Table 4.2: Age of the
Respondents
20
Percentage(%)
0
20-30 31-40 41-50 50 and Total
Year Year Year above
1 2 3 4
Figure 4.1: -Representation of chart on the basis of age of the Respondents

Table 4.3:-Classification of respondents on the basis of Education Qualification.

Post-Graduation 12 40
Under-Graduation 8 27
Up to PUC 10 33
Others 0 0
Total 30 100
(Source: - Field survey)
Analysis
From the above it is clear that qualification of respondents is 40% for

post –Graduation ,27% are of Graduation , and 33% are of PUC ,other
qualification are nill.
Interpretation
It can be interpreted that majority of respondents are of Post-Graduates.
140
120
100
80
60 Table 4.3:-Education
Qualification of the
40
Respondents.
20 Percentage(%)
0
Table 4.3:-Education
Total
Others
Up to PUC
Post-Graduation
Under-Graduation
Qualification of the
Respondents. No. of
Respondents
1 2 3 4
Figure 4.3:Representation of chart on the basis of Educational Qualification.

Table 4.4: -Classification of respondents on the basis of occupation .

Professional 5 17
Government Employee 2 6
Business Man 12 40
Others 11 37
Total 30 100
(Source: - Field survey) Analysis
The analysis can be made from the above table that ,out of 30
respondents,17% are belonging to professional category,6% are of government
employees,40% are of Businessman and remaining 37% are belonging to the others.
Interpretation
The interpretation can be given that majority or respondents are of

businessman.one who will be at a profitable position.
Total
4
Others
Table 4.4: -occupation of
the Respondents.
Percentage(%)
3
Business Man
Table 4.4: -occupation of
the Respondents. No. of
Government Employee Respondents
2
Professional
1
0 50 100 150
Figure 4.4: -Representation of chart on the basis of occupation.

Table 4.5: -Classification of respondents on the basis of Income level .

Below Rs 100000 07 23
RS 1,00,000 to Rs 09 30
3,00,000
Rs 3,00,000 to Rs 5,00,000 13 43
5,00,000 and above 01 4
Total 30 100
(Source:- Field survey)
Analysis
The above table shows the data that out of 30 respondents,43% are of below
100000 income level,30% are of 100000 to 300000 income level ,23% are
belonging to the income level of 300000 to 500000 and the remaining 4% is of
above 500000 income level.
Interpretation
It can be interpreted that maximum number of respondents are comes under

the income level of rs 3,00,000 to rs 5,00,000.
140
120
100
80
Table 4.5: - Income level
60 of Respondents.
40 Percentage(%)
20 Table 4.5: - Income level
of Respondents. No. of
0
Respondents
Below Rs RS Rs 5,00,000 Total
100000 1,00,000 3,00,000 and
to Rs to Rs above
3,00,000 5,00,000
1 2 3 4
Figure 4.5: - Representation of chart on the basis of Income level of Respondents.

Table 4.6: -Classification of respondents on the basis of Marital Status.

Married 18 60
Unmarried 12 40
Total 30 100
(Source: - Field survey)
Analysis
From the above table the analysis can be made that out of 30
respondents,60% are of married and remaining 40 are of unmarried.
Interpretation
It can be interpreted that ,majority of respondents are of married.
120
100
80
Table 4.6: - Marital
60 Status of Respondents.
No. of Respondents
40
Table 4.6: - Marital
20 Status of Respondents.
Percentage(%)
0
Married Unmarried Total
1 2
Figure 4.6: - Representation of chart on the basis Marital Status of Respondents

Table 4.7: -Classification of respondents on the basis of bank account they

have.

Yes 30 100
No 00 00
Total 30 100
(Source: -Field survey)
Analysis
From the above table it can be stated that out of 30 respondents, there is a
100%. Of result
Interpretation
It can be interpreted that ,whole respondents are having bank account.
120
100
80 Table 4.7: -
Respondents who are
60 having bank account.
No. of Respondents
40 Table 4.7: -
Respondents who are
20 having bank account.
Percentage(%)
0
Yes No Total
1 2
Figure 4.7: - Representation of chart on the basis bank account of respondents.

Table 4.8:-Classification of Respondents on taking Bancassurance from the

same bank in which they have account.

Yes 17 57
No 13 43
Total 30 100
(Source: -Field survey)
Analysis
From the above table it is clear that out of 30 respondents,57% of respondents

take bancassurance policy from the same bank in which they have account and
remaining 43% of respondents will not policy from the same bank in which they
have account.
Interpretation
It can be interpreted that majority of respondents will take bancassurance

policy from the same bank in which they have account.
120
Table 4.8:-
100 Respondents taking
Bancassurance from
80 the same bank in
which they have
60 account. No. of
Respondents
40 Table 4.8:-
Respondents taking
20 Bancassurance from
the same bank in
0 which they have
Yes No Total account.
Percentage(%)
1 2
Figure 4.8:-Representation of chart of Respondents on the basis taking

Bancassurance from the same bank in which they have account.

Table 4.9:- Classification of respondents on the basis of Advantage which they

wish to avail from bancassurance.

Enhanced convenience 6 20
Innovative and product range 11 37
More credible solutions 4 13
Need for finance 9 30
Total 30 100
(Source :-Field survey)
Analysis
respondents,20% of respondents are willing to take the advantage of enhanced
convenience,37% are of innovative and product range, 13% of respondents are in
favor of more credible solutions and remaining 30% of respondents are in favor of
need for finance advantage.
Interpretation
It can be interpreted that more number of respondents are willing to take

advantage of getting innovative and product range advantage.
Table 4.9:- Advantage which the respondents wish to avail

from bancassurance. No. of Respondents
1 Enhanced convenience
2 Innovative and product

range
3 More credible solutions
4 Need for finance
4 Total
Figure 4.9:- Representation of chart about Advantage which the respondents wish
to avail from bancassurance.

Table 4.10 :-Classification of respondents on the basis of influencing factors to

buy bancassurance policy.
Particulars No. of respondents Percentage(%)

Personal interest 13 43
Agents 09 30
Friends 03 10
Advertisements 05 17
others
Total 30 100
(Source:-Field study)
Analysis
respondents,43% of respondents are influencing by the factor of personal
interest,30% are by agents,10% are influenced by friends ,17% of respondents are
influenced by the factor of advertisement and finally 0% of respondents are not
influenced by other factors.
Interpretation
It can be interpreted that majority of respondents are influenced by the

factor of personal interest,which is very much important for any
individual to start any activity.
140
120
100
80
Table 4.10 :-The influencing
60 factors of respondents to buy
40 bancassurance policy.
20 Percentage
0 Table 4.10 :-The influencing
Personal interest
Agents
Total
Friends
others
Advertisements
factors of respondents to buy

bancassurance policy. No. of
respondents
1 2 3 4 5
Figure 4.10 :-Representation of chart on the basis of influencing factors of

respondents to buy bancassurance policy

Table 4.11: -Classification of respondents on the basis of response regarding

the best method to improve bancassurance.

Quality administration 6 17
Customer relationship service 18 60
Financial advice by banks 5 20
Bank and Insurance company work 1 03
jointly
Total 30 100
(Source:-Field survey)
Analysis
From the above table the analysis can be made that out of 30 respondents,17% of
respondents are in favor of quality administration to improve the bancassurance
policy,60% of respondents are towards customer relationship service,20% are of
financial advice by banks and remaining 3% of respondents are in favor of bank and
insurance company to work jointly
Interpretation
It can be interpreted that majority of respondents are willing to maintain a good

customer relationship service to improve the bancassurance policy.
Table 4.11: -Respondents response regarding the best method to improve

bancassurance. Percentage(%)
120
100
80
Table 4.11: -Respondents
60 response regarding the best
40 method to improve
bancassurance. Percentage(%)
20
0
0 2 4 6
-20
Figure 4.11: -Representation of chart of Respondents on the basis of response

regarding the best method to improve bancassurance.

Table 4.12: -Classification of respondents on the basis of their opinion about

the preference of bancassurance by banks.

Necessary 5 17
Beneficiary one 16 53
Not necessary 2 7
Moderate 7 23
Total 30 100
(Source: - Field Survey)
Analysis
From the above information the analysis can be made that out of 30
respondents,17% of respondents says that bancassurance policy adopted by banks
necessary ,53% of respondents says that it is beneficiary one,7% is of not necessary
and remaining 23% of response is towards moderate.
Interpretation
It can be interpreted that majority of respondents gives opinion of having

bancassurance policy by banks is of beneficiary one.
140
120
100
Table 4.12: - No. of
80 the preference of
bancassurance by banks.
60 Percentage(%)
40 respondents opinion about

the preference of
20 bancassurance by banks.
No. of Respondents
0
Necessary Beneficiary Not Moderate Total
one necessary
1 2 3 4
Figure 4.12: - Representation of chart on the basis of respondents opinion about

the preference of bancassurance by banks.

Table 4.13: -Classification of respondents on the basis of their opinion about

the preference of Insurance by insurance companies.

Necessary 5 17
Beneficiary one 8 27
Not necessary 1 3
Moderate 16 53
Total 30 100
Analysis
From the above information it is clear that out of 30 respondents,17% of

respondents says that it is necessary to have insurance by insurance
companies.27% of response is towards the beneficiary one,3% of response is not
necessary, and remaining 53% is for moderate.
Interpretation
It can be interpreted that majority of response is towards the moderate

.Because now a days insurance companies are not taking responsibilities.
Total Table 4.13: - No. of

34
respondents opinion about

Moderate the preference of Insurance
by insurance companies. No.
of Respondents
Not necessary
Table 4.13: - No. of
respondents opinion about
Beneficiary one
the preference of Insurance
by insurance companies.
2
Necessary Percentage(%)
1
0 50 100 150
Figure 4.13: -Representation of chart on the basis of respondents opinion about

the preference of Insurance by insurance companies

Table 4.14:- Classification of respondents about their knowing about

bancassurance policy

Referral model 7 23
Stand alone insurance 7 23
product
Corporate agency 1 4
Insurance as fully 15 50
integrated service
Total 30 100
(Source:-Field survey)
Analysis
From the above data it is clear that out of 30 respondents,23% of respondents

are opting Referral model,23% of respondents are towards stand alone product,4%
of respondents are towards the corporate agency, remaining 50% of respondents are
in favor of fully integrated financial service.
It can be interpreted that majority of respondents are towards the fully integrated
financial service.
1 Referral model
2 Corporate Agency
3 Stand-alone insurance
product
4 As fully integrated
financial service
4 Total
Figure 4.14:- Representation of chart about respondents in knowing the types of

bancassurance model

Table 4.15 :-Classification of respondents on their opinion about continuing

with the same bancassurance policy.

Yes 27 90
No 3 10
Total 30 100
(Source: -Field Survey)
Analysis
respondents will continue with the same bancassurance policy and remaining 10%
of respondents will not continue with the same bancassurance policy.
Interpretation
The interpretation can be made that majority of respondents will continue with the
same bancassurance policy.
Table 4.15 :- No. of respondents opinion

about continuing with the same
bancassurance policy. No. of
Respondents
1 Yes
2 No
2 Total
Figure 4.15 :-Representation of chart of respondents opinion about continuing

with the same bancassurance policy

Table 4.16: -Classification of respondents on the basis of type of service

expected from bank.

Modern 8 27
Innovative 17 57
Technology 5 5
Traditional 0 0
Total 30 100
(Source: -Field Survey)
Analysis
respondents are in favor of modern service,57% of respondents are towards the
Innovative service,5% for technology and the remaining 0% are not willing to take
the traditional service quality.
Interpretation
It can be interpreted that more number of respondents are towards the innovative
service quality. Because the innovation is must in every field.
100%
90%
80%
70%
60%
Table 4.16: - Type of service
50% expected from bank by the
40% respondents. Percentage(%)
30%
Table 4.16: - Type of service
20% expected from bank by the
10% respondents. No. of Respondents
0%
Innovative
Total
Modern
Traditional
Technology
1 2 3 4
Figure 4.16: -Representation of chart on basis of type of service expected from

bank by the respondents

Table 4.17: - Classification of Respondents on the basis of their preference

about Bank and Insurance company to invest.

Bank 26 87
Insurance company 4 13
Total 30 100
(Source:- Field Survey) Analysis
From the above table it is clear that out of 30 repondents,87% of respondents will
prefer to invest in banks and remaining 13% of respondents will invest in a
insurance company.
Interpretation
It can be interpreted that the majority of respondents are willing to invest their
money in a bank.
Table 4.17: - No. of Respondents

preference about Bank and Insurance
company to invest. No. of
Respondents
1 Bank
2 Insurance company
2 Total
Figure 4.17: -Representation of chart of respondents about the preference of

Bank and Insurance company to invest.

Table 4.18: - Classification of respondents on the basis of their opinion about

advising customers to take bancassurance policy.

Yes 27 90
No 3 10
Total 30 100
Analysis
respondents will advice customers to take bancassurance policy and remaining
10% will not advice to take bancassurance policy.
Interpretation
It can be interpreted that majority of respondents will advice customers to take

bancassurance policy, as it is having higher security.
Table 4.18: - No. of respondents

opinion about advising customers to
take bancassurance policy.
Percentage(%)
80-100
60-80
40-60
Table 4.18: - No. of respondents 20-40

opinion about advising customers to 0-20
take bancassurance policy. No.of
Yes No Total
Respondents
1 2
Figure 4.18: - Representation of chart about respondents opinion for advising

customers to take bancassurance policy.

Table 4.19:- Classification of Respondents on the basis of their view about

taking measures to create awareness about bancassurance among customers.

Awareness program 22 73
By having personal contact 2 7
Advertisement 5 17
Others 1 3
Total 30 100
(Source:- Field Survey)
Analysis
The analysis can be made that out of 30 respondents,73% of respondents have

given the opinion to do awareness program in order to create the awareness among
the customers,7% are for having personal contact, 17% is through advertisement and
the remaining 3% is for others.
Interpretation
It can be interpreted that majority of respondents have given the opinion to create
awareness program to make the customers know about bancassurance policy.
140
120
100 Table 4.19:- No. of
Respondents view about
80
taking measures to create
60 awareness about
40 bancassurance among
customers. Percentage(%)
20
0 Table 4.19:- No. of
Respondents view about
taking measures to create
awareness about
By having personal
Total
Others
Advertisement
Awareness program
bancassurance among
customers. No. of
contact
Respondents
1 2 3 4
Figure 4.19:-Representation of chart of Respondents view about taking measures

to create awareness about bancassurance among customers.

Table 4.20: - Classification of respondents on Factor which is preferred for the

success of bancassurance .

Most suitable partner 1 3
An effective operating model 23 23
Constant measurement 6 6
Multi level engagement governance 0 0
Total 30 100
Analysis
From the above table the analysis can be made that out of 30 respondents,3% prefer
for most suitable partner for the success of bancassurance,23% of respondents are
for an effective operating madel,6% is for constant measurement and the
remaining 0% is for multi level engagement governance.
Interpretation
It can be interpreted that, majority of respondents are willing to have an effective

operating model for the success of bancassurance.
Table 4.20: - Factor which is preferred for the success of bancassurance

according to the respondents. No. of Respondents
1 Most suitable partner
2 An effective operating model
3 Constant measurement
4 Multi level engagement

governance
4 Total
Figure 4.20: - Representation of chart , which is preferred for the success of

bancassurance according to the respondents

Table 4.21:Classification of respondents opinion about the bright future of

bancassurance in India.

Yes 28 93
No 2 7
Total 30 100
Analysis
From the above table the analysis can be made that out of 30 respondents,93%
of opinion is towards the bright future if bancassuranceinIndia, and remaining 7%
said there is no bright future for bancassurance in India.
Interpretation
It can be interpreted that ,majority of respondents have a fair opinion about the
growth of bancassurance in India.
100
Table 4.21:-No. of
80 respondents about the
bright future of
60
bancassurance in india.
40 No.of Respondents
20 Table 4.21:-No. of
Table 4.21:-No. of… respondents about the
0
Table 4.21:-No. of… bright future of
Yes No bancassurance in india.
Total Percentage(%)
1
2
Figure 4.21:Representation of chart of respondents about the bright future of

bancassurance in India.

Table 4.22: Classification of respondents on the basis of their opinion about

overall satisfaction rating of the bancassurance.

Highly satisfied 2 7
Satisfied 18 60
Neutral 10 33
Dissatisfied 0 0
Total 30 100
Analysis
From the above data it is clear that out of 30 respondents,2% of respondents are
highly satisfied,60% of respondents are satisfied,33% of respondents gave the
neutral opinion and none of them are dissatisfied.
Interpretation
The interpretation can be made that ,majority of respondents are satisfied with
bancaassurance in the case of overall rating if the bancassurance.
Table 4.22: - No. of respondents

opinion about overall satisfaction
rating of the bancassurance.No. of
Respondents
1 Highly satisfied
2 Satisfied
3 Neutral
4 Dissatisfied
4 Total
Figure 4.22: -Representation of chart on the basis of respondents opinion about

overall satisfaction rating of the bancassurance.

Chapter – 5
Findings, suggestions and conclusion
In the light of market survey, an attempt is made to present the summary of

major findings of the study and to offer some suggestions which will help for the
development of bancassurance policy in India.
Findings of the Study
 Majority of the male respondents have a fair opinion about the bancassurance
products and the bank has to sell various insurance product .But still
respondents don‟t know about bancassurance policy.
 Every respondents are having the bank account and majority of them are
willing to continue banc assurance policy in the same bank.
 Main advantage of customers to avail bancassurance policy is for getting
innovative and product range advantage.
 According to respondents the factor influencing to buy the bancassurance
policy is due to the personal interest.
 The best measure to improve the bancassurance policy is in improving the
customer relationship service, which is very much important for doing any
business
 Most of the respondents are preferring to have bancassurance policy by
banks is of beneficiary one.
 Many of respondents know about the integrated financial service, which is
one of the important models of bancassurance.
 More and more innovative service quality should be adopted by the banks
rather than modern and technological aspects.
 Majority of respondents wishes to invest money in a bank than taking the
insurance policies.
 The findings can be made that, majority of respondents will advice the
customers to take the bancassurance policy.
 Awareness programs is the most important factor to create awareness about
bancassurance among the customers.

 Source of income is the best benefit which can be availed from the
bancassurance.
 An effective operating model is the best factor for the success of

bancassurance.because when there is an effective operating model it is easy
to know about the activities.
 Majority of respondents gave the opinion that bancassurance has a bright
future in India and they are satisfied with this policy.
 It is also noticed that customers have a lot of trust on the banks,because of
this reason they will take bancassurance policy from the bank.
 Some of the customers are lacking behind due to the lack of awareness
program.
 Many prefers to invest in banks due to less default risk and few also gave
opinion that bank will give less importance to bancassurancepolicy .
 Many people in the rural parts of India are still unaware about bancassurance
policy, so they have less response about it.
 Currently banks are trying to offer all kinds of banking services to its
customers. So by providing insurance, banks can include an extra service to
attract the customers towards the bank.
Suggestions of the study
 The bank must provide better services to attract the more more of customers
towards the bancassurance.
 The bank should should provide additional benefits in different types of
account
.which is helpful for the customers to get higher returns.
 The should utilize effective mode of advertising to attract the large number
of customers.
 The bank should introduce additional mode of services regarding the
insurance policies. such as low premium in policies, online premium
payment, online claim settlement process, high commission to agents on
sales,etc.
 Banks should provide the after sales service, it increases the trust and quality
of customers .
 Employees of the bank who are selling the insurance products must be

given proper training, so that they can answer to any queries of the customers
and can provide products according to their needs.
 It is very much important to create awareness about the bancaassurace
among the customers so that they buy large in number.
 The insurance companies need to design products specially for distributing

through banks. Trying to sell the products traditionally may not work so
effectively.
 The bank should provide good services and get good return on investment
with the bancassurance.
 Better and convent advertisement should be develop by banks so that it
reaches the urban and rural people then only it is possible for the bank to
reach the selling of bancassurance products.
 The bank should adopt better ways to overcome from various problems faced
by banker regarding bancassurance.
 A formal and standard agreement between the banks and insurance
companies should be taken up and drafted by the national regulatory body.

Conclusion
The insurance industry has been progressing rapidly since opening up of the
sector. The size of the country, adverse set of connectivity in rural area may be
insurance selling in India is a very difficult task.Banks are established for several
purposes. They have been entrusted with the worthy because they are belonging to
the nation, the people and only through the employees the discharge its
responsibilities. The banks reputation, the future responsibility and the extent of
participation in country‟s economic advancement based on banker.
Bancassurance is one of the latest important word in banking and insurance

field. While the banks sells the insurance policies on behalf of insurance
companies. Because banks are having large number of customer base. So the
customers are highly influenced to purchase insurance products.The concept of
bancassurance in In dia is still in its emerging stage. But an incredible potential
reveals that bancassurance in India has a very bright future. Recently various
innovations have taken place in the insurance sector to suit and satisfy the growing
needs of various customers.So,there is every reason to be optimistic that
bancassurance in India will play role for a longer time.
However, bancassurance segment is still facing many problems because of

poor manpower,management,less personal contact with customers, insufficient incen
tive to the agents etc.

Bibliography
Articles
 Mishra and gupta et al, 2012--- customer perception towards
bancassurance
 Aggarwal 2012--- study and comparison of bancassurance as an
intermediary for private and public sector
 Pani and Swain 2013 ---- the advent of bancassurance
intermediary
 Dash and Mahapatra 2010---- customer perception towards
bancassurance
 Reddy 2005 ---- the customer perception towards life insurance
companies policies.
 Keerti and Vijayalakshmi 2009--- customer satisfaction in general
insurance sector
 Sarvanakumar et al, 2012 ---- customer perception towards
bancassurance
Internet sources
 https:// economictimes.indiatimes.com
 https:// en.m.wikipedia.org
 https:// www.aegonlife.com
 https:// www.leadsquared.com
 https:// www.ucobank.com
 www.mckinsey.com
 www.albankingsolutions.com
 https:// www.livemint.com

QUESTIONNAIRE
Dear Sir/Madam,
I hereby introduce myself Sunila M N pursuing 4th semester, in department of
post graduate studies and research in commerce, Kuvempu University
Shankaraghatta, Shimoga district. As a part of the curriculum I have
undertaken the project work on “A study on customer perception towards
bancassurance” under the guidance of Dr. Raghunandan, faculty member,
department of post graduate studies and research in commerce, Kuvempu
University, Jnana Sahyadri Shankaraghatta.
I kindly request you to spend few minutes with this questionnaire and
give your opinion. I strongly assure that information given by you is kept
confidential and used only for the academic purpose.
Yours faithfully
[Sunila M N]
1. Name --------
2. Address --------
3. Gender
(a) Male
(b) Female
4. Age
(a) Below 20
(b) 20 – 30
(c) 30 – 50
(d) Above 50
5. Occupation
(a) government employee
(B) professional

(C) business man

(D) others
6. Educational qualification
(a) post graduation
(b) under graduation
(c) up to PUC
(d) others
7. Martial status
(a) married ( b) unmarried
8. Income level
(a) less than 100000 (b) 100000-300000
(C) 300000- 500000 (d) more than 500000
9. The reason having account in this bank
(a) family tradition (b) incentive scheme
(C) nearest place. (D) others
10. The name of the bank on which you have bancassurance
(a) public (b) private
11. The advantage your available through your bancassurance
A. Enhanced convince
B. Innovation product range
C. More credible solution
D. Need for finance
12. The factor influenced you to buy bancassurance policy
A. Personal interest
B. Agent
C. Friends
D. Advertisement other
13. According to you best method to improve bancassurance

A. Quality of administration
B. Customer relationship service
C. Financial advice by bank

D. Bank and insurance company work
14. The preference of bancassurance by the bank is..

A. Necessary
B. Beneficiary one
C. Not necessary
D. Moderate
15. The opinion from you about the preference of insurance by insurance
companies
A. Necessary
B. Beneficiary one
C. Not necessary
D. Moderate
16. The knowing knowledge of bancassurance policy is an
A. Referral model
B. Stand alone insurance Product
C. Corporate agencies
d. Insurance as fully integrated service
17. Would you like to continue with the same bancassurance policy
A. Yes
B. No
18. The type of service you are expecting from bank
A. Modern
B. Innovation
C. Technology
D. Traditional
19. Your first preference to invest in

A. Bank
B. Insurance company
20. Would you like to advise about bancassurance policy towards
customer or friends

A. Yes B. No
21. The major to be taken by the banks to create awareness about
bancassurance among customers
A. Awareness program
B. Buy having personal contact
C. Advertainment
E. Others
22. The factor which you prefer for success of bancassurance

A. Most suitable partner
B. An effect operating model
C. Constant measurement
D. Multi-level engagement governance
23. The opinion of you about growth of bancassurance is bright future in
India
A. Yes. B. No
24. The satisfaction level of bancassurance policy

A. Highly satisfied
B. Satisfied
C. Neutral
D. Dissatisfied
26. Your suggestion regarding bancassurance

………..,………………………………………………………………………
…………………………………………………………………………………
…………………………………………

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Study on Customer Perception towards Bancassurance

A study on customer perception towards

Project Report Submitted to Kuvempu University in partial

Under the guidance of

Department of PG. Studies and research in Commerce Page 1

Department of PG. Studies and research in Commerce Page 2

the guidance of my supervisor, Dr. Raghu Nandan.

3. I have followed the guidelines provided by the Department in preparing the

Conduct of the Department.

of the report and giving their details in the references.

Department of PG. Studies and research in Commerce Page 3

Dr. Raghu Nandan

Department of PG. Studies and research in Commerce Page 4

This is to certify that Sunila M N is a bonafide student of this Department and

Department of PG. Studies and research in Commerce Page 5

Department of PG. Studies and research in Commerce Page 6

3.10 Key drivers of Bancassurance

5 Chapter 5: Summary of major findings and 82 - 85

Department of PG. Studies and research in Commerce Page 7

SI No Table Name of the Tables Page

2 4.2 Age wise classification of respondents 61

3 4.3 Education wise classification of respondents 62

4 4.4 Occupation wise classification of respondents 63

5 4.5 Income level wise classification of respondents 64

Department of PG. Studies and research in Commerce Page 8

their preference about bank and insurance

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Bancassurance is a team coined by combining the two word Bank and

Bancassurance commonly means selling insurance products under the same

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This distribution will undergo a sea change in a various insurance companies

1.1 REVIEW OF LITERATURE:-

 Mishra and Gupta et al, 2012.

In India, the advent of bancassurance was necessitated by the poor

Study and comparison of bancassurance as an insurance intermediary for

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 Pani and Swain, 2013

The advent of bancassurance as an insurance intermediary has started

(Parasuraman et al, 1985). Customers in developing economies consider the

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For life insurance companies, consumer satisfaction is a function of safety,

 Dash and Mahapatra, 2010

Parasuraman et al (1985) has listed the determinants of service quality as reliability,

In a similar comparative study carried out on the performance and customer

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 Keerthi and Vijayalakshmi, 2009

Commenting on customer satisfaction in General Insurance sector, Johri

In order to enhance customer satisfaction, insurance companies must look

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In a survey of six large US financial conglomerates, Grant (1992) 9 reported that

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Due to legal separation of banking and insurance underwriting, the

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problems and firms‟ debt maturity choices (Barclay and Smith

Brahman R. (2004) et al. in their article “Bancassurance in India- Issues and

Study and comparison of Bancassurance as an insurance intermediary for private

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bancassurance venture. By leveraging their strengths and finding ways to

 To study the awareness level of customers regarding banks selling insurance

STATEMENTS OF THE PROBLEM

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SCOPE OF THE STUDY