2. Meaning and Definition:
▪ Bancassurance means selling insurance product through banks. Banks and insurance
company come up in a partnership wherein the bank sells insurance products to its clients.
▪ Banks earn additional revenue by selling insurance products
▪ This channel disturbtion is most popular in Europe
▪ According to IRDA, ‘Bancassurance’ refers to banks acting as corporate agents for insurers
to distribute insurance product
3. Need of Bancassurance:
▪ To improve the channels through which insurance policies are
sold/marketed so as to make them reach the hands of common man
▪ To widen the area of working of banking sector having a network that
is spread widely in every part of the nation
▪ To improve the services of insurance by creating a competitive
atmosphere among private insurance companies in the market
4. Advantages of Bancassurance
To banks:-
▪ Advantage for the insurance companies
▪ Quality customer access
▪ Increase in volume and profit
▪ Increase in customer loyalty
▪ More profitable resources utilization
5. Advantages of Bancassurance
To customer:-
▪ It helps in building a better relationship with the bank.
▪ One stop shop for all financial needs
▪ Innovative and better products range
▪ Easy to know all New insurance products by bancassurance.
6. Disadvantages of bancassurance
▪ Compromising on data security.
▪ Conflict of interest between the other products of bank and
insurance policies.
▪ Better approach and services provided by banks to customer is a
hope rather than a fact.
▪ Incentives need to be given to bank employees to promote insurance
product.
