MS INSURANCE ,NLU
Bancassurance is the convergence of
Banking and Insurance
It was developed in Europe *.
In Asia Singapore, Taiwan and Hong Kong
are ahead in Bancassurance , with India
and China taking tentative steps towards
WHAT IS BANCASSURANCE ?
Distribution of insurance products through
the bank's distribution channel.
It is basically selling insurance products
and services by leveraging the vast
customer base of a bank and fulfills the
banking and insurance needs of the
customers at the same time.
BANCASSURANCE IN INDIA
In India banking and insurance sectors are
regulated by two different entities.
The banking sector is governed by
Reserve Bank of India (RBI) and the
insurance sector is regulated by
Insurance Regulatory and
Development Authority (IRDA).
RBI recognized the need of an effective
method to make insurance policies reach
people of all economic classes in every
corner of the nation.
Insurance companies proposed to bring
insurance products into the lives of the
common man by making them available at
the most basic financial point, the local bank
branch, through Bancassurance.
In India major driver of Bancassurance
has been the private sector companies
both in the bank as well as in the
SBI Life Insurance Company Limited
Joint venture between the State Bank of
India and BNP Paribas Assurance
registered with IRDA on 30.03.2001
1. State Bank of India --- 74%
2. BNP Paribas Assurance --- 26%.
Canara HSBC Oriental Bank of
Commerce Life Insurance Company
Limited, reg. on 6th of June, 2008
1. Canara Bank - 51%
2. HSBC Insurance
(Asia Pacific) Holdings Ltd - 26%
3. Oriental Bank of Commerce - 23%
Some other tie ups are :
Insurance Company Bank
Life Insurance Corporation of India
Corporation Bank, Indian Overseas
Bank, Centurion Bank, Vijaya Bank,
Oriental Bank of Commerce etc
National Insurance Co. Ltd. City Union Bank
United India Insurance Co. Ltd South Indian Bank
Bajaj Allianz General Insurance Co.
Karur Vysya Bank and Lord Krishna
ICICI Prudential Life Insurance Co
ICICI Bank, Bank of India, Citibank,
Federal Bank, and Punjab and
Maharashtra Co-operative Bank.
HDFC Standard Life Union Bank of India
Advantages for the insurance
Through this new distribution network,
the insurance company significantly
extends its customer base and enjoys
access to customers who were previously
difficult to reach.
An insurance company can establish itself
more quickly in a new market, using a
local bank’s existing network.
Advantages for the banks :
The bank sees bancassurance as a way of
creating a new revenue flow and
diversifying its business activities.
The bank becomes a sort of
“supermarket”, a “one-stop shop” for
financial services, where all customers’
needs – whether financial or insurance-
related – can be met.
Compromising on data security.
Conflict of interest between the
other products of bank and
Better approach and services
provided by banks to customer is a
hope rather than a fact.
For banks it just acts as a means of
product diversification and additional fee
for insurance company it acts as a tool
for increasing their market penetration
and premium turnover and
for customer it acts as a bonanza in
terms of reduced price, high quality
products and delivery to doorsteps. So
every body is a winner here.