BANKING SERVICES

Bancassurance
BY
SANAL VR & SAJU SULAIMAN

 Introduction

Contents

What is Bancassurance
Bancassurance in India
Bancassurance Models
Advantages and Disadvantages
Merits & Demerits
SWOT Analysis

Introduction
Bancassurance is the convergance of Banking
& Insurance businesses. Also known as
allfinanz
Developed in Europe , France
Major Global Players Include ING, Allianz , BNP
Paribas , Credit Agrecole , ABN Amro etc..
In Asia , Singapore , Taiwan and Hong Kong
are ahead in bancassurance , with India and
China taking tentative steps towards it.
Banned in US by the Glass Steagall
Act( 1933) till the year 1999
3

What is bancassurance
Distribution of insurance products through
the banks distribution channels
As per IRDA: bancassurance refers to
banks acting as corporate agents for
insurers to distribute insurance products
Basically , selling insurance products and
services by leveraging the vast customer
base and distribution channels of the
bank, to fulfill the banking and insurance
needs of customers simulateneously.
4

Bancassurance In India
In 2002 , banks in India were permitted to
do insurance business for first time .
In India the bancassurance is regulated by
the IRDA and Reserve Bank of India jointly
A Win- Win Strategy
In India , major drivers of bancassurance
has been the banks and companies form
the private sector
5

Bancassurance Models
Three major bancassurance models :

Strategic Alliance: Under a strategic alliance, there is a tie-up

between a bank and an insurance company. The bank only
markets the products of the insurance company.

Full Integration: This arrangement entails a full integration of

banking and insurance services. The bank sells the insurance
products under its brand acting as a provider of financial
solutions matching customer needs. Bank controls sales and
insurer service levels including approach to claims

Mixed Models: Under this approach, the marketing is done by

the insurer's staff and the bank is responsible for generating
leads only. In other words, the database of the bank is sold to the
insurance company. The approach requires very little technical
investment.
6

Bancassurance : Advantages for

Banks
Diversification
Increase revenue
Satisfaction of more financial needs under
same roof
Increased customer loyalty / Interaction
Better resource utilization
Enriched work environment
Sales oriented culture

Bancassurance : Advantages for

Insurance Comapanies
Access to the large customer base of the
bank
Quality customer availability
Use of the large and existing distribution
network / branches of the bank
Reduced costs
Improved Brand Equity
Increase in volumes and profits
8

Bancassurance : Merits and

Demerits

Enhanced Convenience
One stop shopping for all needs
Innovative and Better products
Credibility of Bank

Compromise on Data Security

Conflict of Interest between the Banking
and Insurance Products
Drop in Quality of Service by Banks
Leak of personal info/ privacy issues
9

Bancasurance : SWOT Analysis

Strengths

Weaknesses

Vast untapped market

Lack of networking among

branches

Huge pool of skilled

professionals

Saving ability of middle

class

Opportunities

Threats

Data mining - STP

HR Challenges

Wide distribution network

Non response from Target

group

10

Bancasurance : Some major

alliances in India
SBI with SBI Life & BNP Paribas Assurance
Canara Bank with HSBC Insurance &
Oriental Bank of Commerce
Vysia Bank with ING Ins.
Bank of India with Star Health Ins.
LIC with Corporation Bank , IOB , Centurion
Bank, Vijaya Bank & OCB
Bajaj Allianz Ins Co with Karur Vysia and
Lord Krishna Banks
United India Insurance Co with South
Indian Bank
11

END

12