PRESENTATION ON

BANCASSURANCE

PRESENTED BY-

HARSHIT PAREEK MS INSURANCE ,NLU

INTRODUCTIONBancassurance 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 it.

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 INDIAIn 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).

Cont…..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.

Cont…..In India major driver of

Bancassurance has been the private sector companies both in the bank as well as in the insurance.

JOINT VENTURES SBI Life Insurance Company

LimitedJoint venture between the State Bank of

India and BNP Paribas Assurance registered with IRDA on 30.03.2001

Share Holdings 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 Share Holdings1. 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. Ltd

Karur Vysya Bank and Lord Krishna Bank

ICICI Prudential Life Insurance Co Ltd.

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 company :

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.

DEMERITS OF BANCASSURANCECompromising 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.

Conclusion: For banks it just acts as a means of product

diversification and additional fee income; 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.