The document discusses the benefits and strategies of the bancassurance model in the non-life insurance sector, highlighting its role in driving profitability and market share for insurers in India. Key points include the importance of integrating banking and insurance for better customer access, improved risk management, and lower acquisition costs. It also emphasizes the growth potential in underserved segments such as micro and small enterprises and the increasing demand for health insurance.

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Bancassurance Asia Summit, Singapore, 2015
Sharad Mathur
Senior Vice President & Head – Agency, Digital & Alternate Channel
SBI General Insurance Company Ltd, India

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Bancassurance Channel
Driving Profitability and Market share in the Non-Life Insurance
Sector through the Bancassurance Channel

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Learnings - Insurers optimising Bancassurance
• Bancassurance players have out-performed the market in India
• International experience supports the bancassurance model
• Bancassurance also provided a platform to develop scale
• A well-integrated bancassurance model is required
• Personal Lines is growing on the back of strong economic indicators
• Micro / SME represents a growing segment which is underserved by insurance

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Turning out to be Beneficial
Bancasurance Benefit What it leads to What it enables
Better risk selection due to
Banks’ own risk selection
processes
Better overall risk profile
“Subsidise” less profitable
insurance business in other
channels
Lower Loss Ratio
Substantially higher margins
Integrated processes and
systems, straight-through
processing
Greater efficiency Bundling of insurance
products with other bank
products
Lower ME
Lower acquisition costs
Significant existing customer
database
Better cross-sell rates
Leveraging of the bank
partner to develop scale
Better Penetration
Access to bank's clients –
particularly in commercial /
SME
Brand Leverage
Instant brand affinity
Greater ability to grow into
various product lines and
channels
Better customer perceptions
Greater marketing reach

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Cost Minimization - Bancassurance
The best Bancassurance are able to fully leverage the model to extract maximum
performance – driving down cost while more efficiently increasing top line
Supporting Cost Minimization

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Channel wise Business Share
#Figures in Rs. Crores

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Bancassurance Pie

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Bottom-line Trend : Bancassurance v/s Industry

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Banks Classification

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Banks size

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Banks Reach

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Regulatory - Bancassurance arrangement

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Successful ride on bank products

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Product Mix
It is discovered that if products are simple, easy to understand, time-effective
and convenient to sell, chances are high to achieve success

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Process -
Asset Customers
Customer walks-in for loan
processing
Bank’s staff pitches the Home loan features & also the Home structure insurance
product
Customer completes the loan documentation. Fill insurance Proposal Form.
Gives consent for Premium debit
At the time of final home loan disbursal, bank staff debits the insurance premium
Bank staff issues 'Certificate of Insurance'
Premium amount is credited to the Insurers account by EOD along
with insured details
No
Yes
Customer’s Decision

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Process -
Liability Customers
Customer walks-in for opening saving
account
Bank’s staff fulfills the account opening formality & also pitches
for Accident & Health Products
Customer fills the Proposal form & gives consent for
Premium debit
Bank staff issues the Certificate of
Insurance
No
Yes
Customer’s
Decision
Premium amount is credited to the Insurers account by EOD along
with insured details

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Why Bancassurance model a success?

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Learning - Key Drivers for Banca Growth

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SWOT - Bancassurance

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Technology – game changer

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Driving Profitability - BancassuranceDriving Profitability - Bancassurance
Strong Retention Strategy
• Robust process on renewal retention
• Use of technology to enhance client’s experience
• Develop strong supply chain for service
Higher Penetration / Bigger Customer Base
• Focus on Retail Saving A/c & Deposit customer of Banks
• Even a marginal increase in penetration of 5% can result in handsome Premium
• Segmentation of Customers will help identifying the right target customer
Health Insurance Opportunity
• It is growing rapidly @ about 15%
• It can bring huge retail premium to the tune of 20%~22% of the overall bank business
• Good health products for customer & Better incentive for Banks with favorable losses
• Rising medical inflation will support add-on health cover too
• Motor, due to heavy competition is struggling
Co-branded & Better priced Products
• More simplified OTC products
• Preferably Co-branded to leverage the Trust element
• Appropriate pricing (Value-for-money)
Favorable Op-Ex
Better Loss Ratio
Visibility, Awareness & Knowledge will aid development this channel

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