PROJECT REPORT

Exploratory study and analysis of corporate tie ups for BANCASSURANCE In AXIS BANK and other select private and Public Sector Banks.

For the Academic year 2012-2013

Submitted by: KUMUDAXI VERMA Enrollment No:

Under the Guidance of Prof. Ravjeet Talwar

Table of contents ACKNOWLEDGEMENT

The successful completion of any task would be incomplete without complementing those who made it possible. This project has been written in Simple and lucid style. I am short of words to express my sincere thanks to the management of AXIS BANK, Sector 17, Chandigarh for providing me an opportunity to undergo training in their reputed organization.

I am gratefully indebted to my respected faculty Prof Ravjeet Talwar for helping me in various ways and for giving me various ideas for completion of this project. I express my grateful thanks to whole staff members for regularly giving me the database of clients and helping me out to deal with the preferred customers and get feedback from them. I am also very thankful to my parents who encouraged and greatly helped me in making this project. Without their support this project work would not have been successful.

DECLARATION
I Kumudaxi Verma, student of IIPS Chandigarh (Sem II) hereby declare that I have completed this project on Bancassurance in partial fulfilment of MBA-Program in the academic year 2011-2013. The information submitted is true and original to the best of my knowledge.

(Student Signature) Student Name: Kumudaxi Date:

(Faculty Signature) Faculty Name: Prof Ravjeet Date:

Executive Summary
The Banking and Insurance industries have changed the changing and challenging economic environment throughout the world. rapidly in

In this competitive and liberalized environment everyone is trying to do better than others and consequently survival of the fittest has come into effect. This has given rise to a new form of business wherein two big financial institutions have come together and have integrated all their strength and efforts and have created a new means of marketing and promoting their products and services. On one hand it is the Banking sector which is very competitive and on the other hand is Insurance sector which has a lot of potential for growth. When these two join together, it gives birth to BANCASSURANCE. Bancassurance is nothing but the collaboration between a bank and an insurance company wherein the bank promises to sell insurance products to its customers in exchange of fees. It is a mutual relationship between the banks and insurers. A relationship which amazingly complements each others strengths and weaknesses. It is a new buzz word in India but it is taking roots slowly and gradually. It has been accepted by banks, insurance companies as well as the customers. It is basically an international concept which is spreading all around the world and is favored by all. Taking all these things into consideration I would like to present my project which basically deals with BANCASSURANCE. The project flashes some light on Bancassurance and how it is perceived by people in India. It deals with the conceptual part of Bancassurance as well as its practical applications in India. The main focus of this project is on benefits and importance and promotion of Bancassurance in India which is based on opinions of respondents from different age groups and different Income Groups. What came up after analyzing their version is this Project work.

Table of Contents
Content Acknowledgement Executive Summary Chapter 1: Introduction 1.1 Overview of the Topic 1-3 1.2 Company Profile Chapter 2: Literature Review Chapter 3: Research Methodology 3.1 Need & obective of the study 3.2 Research design 3.3 Sampling 3.4 Sample Design 3.5 Research 3.6 Data collection 3.7 Pre Testing 3.8 Statistical Treatment Chapter 4: Data Analysis Chapter 5: Results and Conclusions Bibliography Annexure Page No 1 2 1-3 4-6 6-12

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1. INTRODUCTION
1.1 Overview of the topic
Bancassurance commonly means selling insurance products under the same roof of a bank. Though Bancassurance had roots in France in the 1980s, and spread across different parts of Continental Europe since, it has spread its wings in Asia in particular, in India. In India, there are a number of reasons why Bancassurance could play a natural role in the insurance market Banks have a huge network across the country. Banks can offer fee-based income for the employees for insurance sales. Banks are culturally more acceptable than insurance companies Some bank products have natural complementary insurance products. For example, if a bank gives out a home loan, it might insist on a life insurance cover so that in case of death of the borrower, there is no problem in paying off the home loan. o Bancassurance simply means selling of insurance products by banks. o Bancassurance, which is also called Allfinanz- a one-stop financial service to meet the requirements of Banking Services and also to provide reliable protection to customers. o Bancassurance is identified as an alternative distribution channel, the key issue which is closely linked to the regulatory climate of the country to improve the non-interest income of banks. o In this arrangement, insurance companies and banks undergo a tie-up, a system in which a bank has a corporate agency with an insurance company to sell its products. o By selling insurance policies the bank earns revenue apart from interest. It is called as fee-based income. This income is purely risk free for the bank since the bank simply plays the role of an intermediary for sourcing business to the insurance company.

The distribution of insurance products through banks is beneficial not only to the insurance and banking companies, but also to the customers. The growth of Bancassurance depends on how well the banks and the insurance companies are able to overcome the operational challenges that are being constantly thrown at them. The need of the hour for the Bancassurance venture is to inculcate new ideas, new approach and work culture. Both the bank and insurance company share the commission. Insurance policies are processed and administered by the insurance company.

Need for Bancassurance in India:From the view point of insurance industry also the importance of bancassurance was felt necessary. With the increased pressures in combating competition, companies are forced to come up with innovative techniques to market their products and services. At this juncture, banking sector with its far and wide reach, was thought of as a potential distribution channel, useful for the insurance companies. Thats where the bancassurance came into existence. Thus, bancassurance is poised to become a key determinator / differentiating factor in the Insurance industry as well The need and subsequent development of Bancassurance in India began for the following reasons:

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.

REASONS FOR BANKS TO ENTER INTO BANCASSURANCE

1. Intense competition between banks, against a background of shrinking interest margins, has led to an increase in the administrative and marketing cos ts and limited the profit margins of the traditional banking products. New products could substantially enhance the profitability and increase productivity. 2. Financial benefits to a bank performance can flow in a number of ways, as briefly outlined below:o Increased income generated, in the form of commissions and/or Profits from the business. o Reduction of the effect of the bank fixed costs, as they are now also spread over the life insurance relationship. o Opportunity to increase the productivity of staff, as they now have the chance to offer a wider range of services to clients 3. Customer preferences regarding investments are changing. 4. The realization that joint bank and insurance products can be better fo r the cus tomer as they provide more complete solutions than traditional standalone banking or insurance products. 5. Strong need for customer loyalty. 6. It is believed that as the number of products that a customer purchases from an organization increases the chance of losing that specific customer to a competitor decreases. 7

Regulations under RBI and IRDA:The Reserve Bank of India and the Insurance Development and Regulatory Authority have a set of guidelines for companies that couple to form bancassurance. Based on the equity a bank should hold in joint venture, the highest allowable value of equity, the type of banks and insurance companies that can couple together and the operation of bancassurance are all the factors that are regulated by RBI and IRDA. The IRDA has very recently drafted guidelines to promote open architecture in bancassurance. Currently a bank has a tie-up with only one life insurer and one non-life insurer. But in the new model the banks necessarily have to have multiple tie-ups. The country is divided into zones and every bank has to choose multiple insurers within the zones. With this the customer will have a wider range of insurance products offered by different insurers. It will also lead to a deeper penetration in the selling of insurance products.

Who bring what to the Partnership

Insurance Industry in India

13 Private players in the market today: 6 Bank owned insurers- HDFC Standard Life, ICICI Prudential, ING Vysya, MetLife, OM Kotak, SBI Life 7 Independent Insurers- Bajaj Allianz , Birla Sun Life, Aviva, Max New York Life, Tata AIG, Reliance Life and Sahara Life LIC The state Insurer is the dominant player with over 70% of the market share Total Life Market Size at Rs. 250 billion (USD 5.5. Bn)

The Three Development models

Description Country where the model is most widespread Bank acts as Operations Lack of flexibility to USA, Germany, UK, an start quickly. launch new prod. Japan and South Korea. intermediary No capital Possibility of for an investment. differences in insurance co (less costly) corporate culture. Advantages Disadvantages

Distribution Agreement

Joint Venture

Bank in Transfer partnership expertise with one or more insurance companies

of Difficult to manage in Italy, Spain, Portugal, the long term South Korea.

South Korea

Creation of a Same new corporate subsidiary culture

Substantial investment

France, Spain, Belgium, UK, Ireland

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. This is obviously a fundamental advantage, it is itself enough to convince an insurance company to ally itself with a bank

 The insurance company has the opportunity to vary its distribution methods, in order to avoid excessive dependence on a single network. Diversification reduces risk The insurance company often benefits from the trustworthy image and reliability that people are more likely to attribute to banks; The insurance company also benefits from the reduction in distribution costs relative to the costs inherent in traditional sales representatives, since the sales network is generally the same for banking products and insurance products. These cost savings have been recognized by many bancassurance operators around the world and are therefore carried over into the costs included in contracts. This means that products can be sold more cheaply; An insurance company can establish itself more quickly in a new market, using a local banks existing network.

Advantages for the Bank:

First of all, the bank sees bancassurance as a way of creating a new revenue flow and diversifying its business activities. This advantage was all the greater in the early 1990s, a period characterized by increased competition between financial institutions and a reduction in the banks profit margins and, therefore, the need to look for new business; 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. The broadening of its product range makes the bank more attractive and can reinforce customer satisfaction and therefore customer loyalty; The distribution costs can be seen as marginal since, in most cases, it is the banks existing employees who sell the insurance products. Amongst other things, the one-stop shop model optimizes the use of the network and increases the profitability of the existing branch network.

Advantages for the Consumer:

As mentioned among the advantages for the bank, the consumer enjoys greater access to all financial services from a bank that offers both banking and insurance products; Since the distribution costs are lower than in a traditional distribution network, the consumer can usually get cheaper insurance products than through traditional channels. In addition, premium payment methods are simplified, since premiums are collected directly from bank accounts; The special relationship between the customer and the bank means that there is a better match between what the customer needs and the solutions provided by the bank.

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1.2 Company Profile

History of Axis Bank

The Bank was incorporated on April 03,1993. UTI Bank was promoted by UTI, Life Insurance Corporation Of India, General Insurance Corporation Of India and its 4 subsidiaries. The Bank was the first one to offer ATM Cards, using which account holders can withdraw money from any of the Banks ATMs across countries connected via VSAT. UTI Bank and CITIBANK launched an international co-branded Credit Card under MasterCard Umbrella in 1999. In the year 2000 the Bank announced the launch of tele Depository Services for its depository clients. UTI also enteredinto an agreement with Stock Holding Corporation of India for providing Loans against shares to SCHCILs customers and funding investors in public and rights issues. In the year 2004, UTI came out with 500 million unsecured Redeemable Non-Convertible Debentures issue fully subscribed. In 2005, UTI Bank entered into Bancassurance Partnership with Bajaj Allianz General Insurance for selling Insurance Products. UTI also launched its first Satellite retail Assets Center (SRAC) in Karnataka. In the Year 2006, Bank unveiled priority Banking lounge. It also became the first Indian Bank to successfully issue foreign currency hybrid Capital in International Market Axis Bank (2007) informed that consequent upon handling over charge as Administration of the (SUUTI) the nominee director resigned w.e.f Dec 06, 2007. It was in the year 2007 that UTI Bank was changed to AXIS Bank. In 2009,SHIKHA SHARMA was appointed as the C.E.O. Axis entered into strategic alliance with Motilal Oswal, in order to facilitate online trading for banks costumer.

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AXIS BANK
Axis bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I) Life Insurance Corporation of India (LIC) General Insurance Corporation of India (GIC) Axis Bank is the first bank in the country to provide a secure debit card-based payment service. The Bank's Registered Office is at Ahmadabad and its Central Office is located at Mumbai. The Bank as on 31st March, 2012 is capitalized to the extent of Rs. 413.20 crores with the public holding (other than promoters and GDRs) at 54.08%. The Bank has a very wide network of more than 1600 branches (including 169 Service Branches/CPCs as on 31st March, 2012). The Bank has a network of over 10000 ATMs (as on 31st March, 2012) providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country. Axis Bank Limited provides corporate, retail, and business banking products and services in India. The companys deposit products include demand draft, savings account, current account, and term deposits. The company also provides home loans, car loans, personal loans, loan against shares and security, loan against property, education and consumer loans, structured finance and microfinance products, short-term loans, loans for small and medium enterprises, agriculture loans, as well as credit and debit cards.

NAME CHANGED FROM UTI BANK TO AXIS BANK

In July 2007, UTI Bank was renamed Axis Bank. Rebranding followed approvals from the Board, Shareholders and the Reserve Bank of India, and after obtaining a new certificate of incorporation from The Registrar of Companies.

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Reasons behind the change of name:

1. They had to give up the UTI name after using it for 13 years as we were not prepared to accept terms and conditions (including royalty) from UTI AMC. The decision to rebrand itself was taken by the bank as it was allowed to use the UTI brand name for free till January 31, 2008, beyond which it had to pay royalty for using the name. 2. The recommendation for name change to axis bank had arisen from the existence of several shareholder-unrelated entities using the UTI brand, and the consequent brand confusion that this generated. 3. The name UTI bank was changed to AXIS bank as UTI gave a look of government sector bank. They had to change their name to have their own brand and identity.

GROUP COMPANIES:
AXIS ASSET MANAGEMENT COMPANY LIMITED AXIS MUTUAL FUND TRUSTEE LIMITED. AXIS SECURITIES AND SALES LIMITED. AXIS TRUSTEE SERVICES LIMITED. AXIS PRIVATE EQUITY LIMITED

SOURCES OF FINANCE: A) SHORT TERM FINANCE:

Overdraft Suppliers credit Working capital

B) LONG TERM FINANCE:

Mortgages Bank loans Share issues Debentures Retained profits Hire purchases

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C) INTERNAL FINANCE:
Day to day cash sales to customers. Money loaned from trade supplier through extended credit. Reduction in amount of stock held by business. Sale of any surplus assets no longer needed (selling a companys car)

D) EXTERNAL FINANCE:
An overdraft from bank. A loan from bank Sale of new shares

PROMOTER
Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crore each.

VISION OF AXIS BANK

The bank has set for itself the ambitious vision To be the preferred financial solutions provider excelling in customer delivery through insight, empowered employees and smart use of technology This Vision is supported by clear goals, strategy and objectives which are communicated to all the employees to derive a high level of commitment.

MISSION OF AXIS BANK

Customer Service and Product Innovation turned to diverse needs of individual and corporate clientele. Continuous Technology up gradation while maintaining human values. Progressive globalization and achieving international standards. Efficiency and effectiveness built on ethical practices. 14

CORE VALUES

Customer Centricity Ethics Transparency Teamwork Ownership

SERVICE QUALITY POLICY

Acting fairly and reasonably in all its dealings with customers by: Meeting the commitments and standards for the products and services it offers, and in the procedures and practices its staff follows. Making sure its products and services meet relevant laws and regulations. Ensuring that its dealings with customers will rest on principles of integrity and transparency. It will help customers to understand how its financial products and services work by giving the information about the products. Explaining their financial implications.

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ORGANISATION STRUCTURE OF AXIS BANK

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BOARD OF DIRECTORS

Director Name
Dr. Adarsh Kishore Smt. Shikha Sharma Shri Sisir K. Chakrabarti

Designation
Chairman Managing director &CEO Deputy Managing Director

Shri J.R Verma Dr.R.H Patel Smt.Pama Bijapurkar Shri R.B.L. Vaish Shri M.V. Subbiah Shri K.N.Prithviraj Shri V.R.Kaundinya Shri S.B. Mathur Shri M.S. Sundara Rajan Shri S.K. Roongta Shri. Prasad.R.Menon

Director Director Director Director Director Director Director Director Director Director Director

MAJOR COMPETITORS OF AXIS BANK

State Bank of India ICICI Bank HDFC Bank PNB SBOP Central Bank of India

Axis bank offers its services majorly in four parts:

A. B. C. D. PERSONAL CORPORATE NRI PRIORITY BANKING

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SWOT ANALYSIS OF AXIS BANK

STRENGTHS: Brand Name. Support of various promoters. High level of services. Knowledge of Indian market.

WEAKNESS: Market capitalization is very low. Lack of awareness. Not been fully able to position itself correctly. THREATS: Advent of MNC Banks. Foreign Banks. Govt. Banks. Future market trend.

OPPORTUNITIES: Growing Indian banking sectors. People are becoming more service oriented in the global market. Dissatisfied Customers of other banks Business advising for smaller Players.

Products and services offered by Axis Bank

Being one of the biggest private sector banks in India, Axis Bank offers a varied range of products and services to the customers which include the following:

ACCOUNTS:
1. Krishi Savings Account 2. Zero Balance Savings Account 18

3. Prime Savings Account 4. Easy Access Savings Account 5. Women's Savings Account 6. Corporate Salary Account 7. Demat Account 8. Priority Banking Account 9. Defense Salary Account 10. Senior Citizen's Account 11. Azaadi - No Frills 12. Trust/NGO Savings Account 13. Pension Savings Account 14. RFC(D) Account

DEPOSITS:
1. Recurring Deposit 2. Fixed Deposit 3. Tax Saver Fixed Deposit

LOANS:
1. 2. 3. 4. 5. 6. 7. 8. Car Loan Home Loan Loan Against Shares Personal Loan Loan Against Security Loan Against Property Consumer Loan Study Loan

DEBIT CARDS
1. 2. 3. 4. 5. 6. 7. Titanium reward Debit card Priority Platinum Debit Card Gold Debit Card Classic Debit Card Business Gold Debit Card Gold Plus Debit Card My design image debit card

CREDIT CARDS 1. Infinite Credit card 2. Platinum Credit card 19

3. 4. 5. 6. 7. 8.

My wings Credit Card Titanium Smart Traveler Credit Card Corporate credit card My choice credit card Signature\wealth credit card My zone credit card

PREPAID CARDS 1. 2. 3. 4. 5. My money card Gift Card Corporate Gift Card Smart pay card Rewards Card

INVESTMENTS 1. 2. 3. 4. Online Trading Mohur Gold Demat Account Mutual Funds

INSURANCE Health Insurance 1. Silver Health 2. Family Health Home Insurance 1. Safe Home 2. Safe Home Plus

Motor Insurance Personal Accident Jewellery Insurance

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Payment Transfers Electronic Clearing Service (ECS) Bill Pay

Tax Payments 1. 2. 3. Tax e-Payments Pension Disbursement Direct Tax Payments

Other Services. 1. 2. 3. 4. Locker Facility Online shopping IPO Smart E Smart

Besides the above mentioned services, Axis Bank Ltd. offers a variety of services to its corporate and NRI customers such as business accounts, CMS, treasury, credit, capital market services and money transfer services.

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2. Literature Review

Veni (2008) in her article Bancassurance- An emerging concept in India considers Bancassurance to be a good scope for both the institutions due to Good economic growth Huge FDI Expansion of middle Income Class group in the country. She sees its advantages as increased productivity and employee growth without expenditure. According to her Consumer is benefitted to a large extent as he gets both the services Banking and Insurance under one roof. Insurance company gets big clientele to approach and sell its products to them.

Benoist (2002) in his article Bancassurance: The New Challenges considered Bancassurance beneficial strategically for both the partners by making Distribution network more profitable and by building client loyalty. However he did not rule out the risk of sabotaging image of either partner and general risk of client dissatisfaction arising out of attitudinal conflict between the employees of two partners. According to him the shift from a product-based approach to a solutions-based approach, or one stop shopping at bank branches, makes life easier for clients. And selling each client a number of products helps to build loyalty. He marked the three golden rules: (1)The successful players are the ones who are capable of tailoring the model to the context. (2) and of managing critical success factors: quality, innovation, short time to market of new products, advanced technologies and low costs (3) and above all building strong relationships.

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Karunagaran(2006) assessed the eligibility for Bank to join this venture with Insurance Company. The net worth of Bank should not be less than worth 500 crores. CRAR of Bank should not be less than 10 % Bank should have been running in net profit for last 3 consecutive years. According to her As at end-March 2006, among the life insurers, there were 151 companies in private sector and Life Insurance Corporation of India (LIC) was the solitary public sector company. As regarding the present size of the insurance market in India, it accounts not not even one per cent of the global insurance market. She pointed out that Indias insurance market is expected to grow rapidly in the next 10 years. She also stated that in spite of significant growth of life insurance business through the outstanding efforts of LIC, only 25 to 26% of insurable population in India has been insured. Her study revealed that at the initial growing stage of the economy the primary financial needs are met by the banking system and thereafter as the economy moves on to higher pedestal, the need for the other non-banking financial products including insurance, derivatives, etc., is strongly felt. Moreover, as India has already more than 200 million middle class population coupled with vast banking network with largest depositors base, there is greater scope for use of bancassurance.

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Saravanakumar (2012) sees disadvantage on Insurance Companies part as Banks after allying with an Insurance Company may discontinue it to settle their own venture. He says that with the opening up of this sector to private players, competition has become more intense and the public sector major LIC has been challenged with a flood of new products and new means of marketing. Insurance industry in India has been progressing at a rapid pace since opening up of the sector to the entry of private companies in 2000. He classified the system into 3 Models: (1)Referral Model, (2)Corporate Agency, (3) Fully Integrated Financial Service He considered some issues hindering the smooth functioning of Banking System such as: Lathargic attitude of Public Sector Banks. Conflict of interests and Incompatibility of attitudes between the Employees of Banks and Insurance Companies. Suspected apprehension of replacement to Insurance Sector. He says that going by the present pace, bancassurance would turn out to be a norm rather than an exception in future in India.

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3. Research Methodology
3.1 Need and objective of the study Bancassurance is a relatively new concept in the global stage. Unlike banks and insurers which have been around in one form of another for centuries, Bancassurance has only been around for a few decades. AXIS bank was having a tie up with Max New York Life Insurance for selling Life insurance products to its retail customers. Hence there is a need for the study to know whether AXIS bank has been benefited out of bancassurance by way of financial analysis and to suggest the areas where they can make use of and converge the attention of the bank if any, is required.

Objectives of the study

Primary objectiveIt is to make an analysis on the financial performance of AX IS bank in bancas su rance with s pecific r eference to life insurance and to s ugges t the ways and means to improve the exis ting performance by way of collecting responses from the customers. Secondary objective To find out the kinds of tie ups in Banking and Insurance Sector. Study the Customer awareness towards these Bancassurance tie-ups. To assess the relationship building factors of Banks, which is significant for Bancassurance. To know the customer preferences in selecting AXIS bank as a distribution channel in case of their willingness to obtain Insurance policy in future.

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3.2 RESEARCH DESIGN:

Research design is the arrangement of conditions for collection and analysis of data in manner that aims to combine relevance to the research purpose with economy in procedure of data. It is a blue print specifying every stage of action in the course of research. o The research design adopted in this study for secondary data is exploratory and analytical in nature. Exploratory research aims to gain familiarityand new insights into any phenomenon while analytical research aims at analyzing the current scenario and thereby using that to project the future.

3.3 SAMPLING:
Sampling may be defined as a selection of some part of an aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made. The sample size was 100. 100 respondents were surveyed and interviewed regarding Bancassurance.

3.4 SAMPLING DESIGN:

A sampling design is a definite plan for given population. There are different methods of sampling. Here technique has been used. obtaining a sample Convenience sampling

CONVENIENCE SAMPLING: This method of sampling involves selecting the sample elements using some convenient method without going through the rigor of sampling method. The researcher may make use of any convenient base to select the required number of samples. Accordingly, the area selected for the study was Chandigarh.

3.5 SAMPLE SIZE:

Sample size refers to the number of items to be selected for the universe to constitute a sample. The total sample size was taken to be 100.

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This project consists of data which are collected from various sources. Normally there are two sources of collecting data i.e. Primary Data and secondary data. In this project I have taken both primary as well as secondary Data.

3.6 Primary Research:

Primary research has been done to validate the information given in this project. This research has been extensively done via visit to a bank (Axis Bank). Interviews from various Bank clients and public . The research was primarily focused on structured face-to-face interviews.

Secondary researchThe secondary data about the project is collected through various sources i.e. 1. Various websites 2. Newspaper articles 3. Blogs 4. Scholar articles

3.7 DATA COLLECTION:

The method followed in obtaining the primary data was through the structured questionnaire. The researcher had used a Questionnaire for obtaining the primary data for analysis. A questionnaire is a form prepared and distributed to secure responses to certain questions. Here a well-structured questionnaire has been prepared with all the important details regarding bancassurance. It has both open ended and close-ended questions.

3.8 PRE TESTING:

Before a questionnaire is finalized it should be field-tested. As such, pilot study has been done. That is after the questionnaire was drafted, to decide whether it is comprehensive or not, it is used with a few (10) respondents. Their responses are studied and it has been helpful in changing the questionnaire like giving more instructions to the respondents for filling up, re-sequencing the questions, addition and deletion of questions etc. 27

3.9 STATISTICAL TREATMENT:

This constitutes an integral part of research analysis. Hence an analysis of data compiled should be subjected to relevant analysis so that meaningful conclusions could be arrived at. The statistical tools applied in this research are: Percentage Analysis Graphical Method Correlation Analysis

CORRELATION COEFFICIENT
In a bivariate study distribution we may be interested to find out if there is any correlation or co-variance between the two variables under study. If the change in one variable affects a change in the other variable, the variables are said to be correlated. If the two variables deviate in the same direction i.e. if the increase (or decrease) in one results in a corresponding increase (or decrease) in the other, correlation is said to be direct or positive.

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4. Data Analysis
Data was analysed by simple Descriptive Statistical methods and results were shown on the Bar Graphs and Pie Charts. However final inferences were drawn from Correlation explained in the last section.

4.1 Customer Preferences?

Interpretation: In the sample it was found out that out of the total respondents, 40% of the people were dealing with SBI, Followed by PNB- 20% AXIS 14% CBI 4% HDFC 10% Others 12% This means that most of the people are SBIs customers which shows the market share of SBI in Chandigarh.

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4.2 Most preferred products by the customers.

Interpretation: The research concluded that Savings a/c is the most common product of the banks as compared to Insurance Policies, Loans, FDs, RDs etc.

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4.3 Preferred Insurance Policy by the customers.

Interpretation: 48% respondents have purchased Insurance policies from Independent Insurance Companies. And only 24% of the total respondents are associated with Bancassurance. Whereas 28% people are dealing with both. That means these people are the ones who have experienced both kinds of distribution Channels and can be approached for experiences regarding both.

4.4 Bancassurance is beneficial over Independent Policy.

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Interpretation: Majority of the people are in favour of bancassurance. According to them Bancassurance has an upper hand over Independent Insurance Policies. Whereas 32% are neutral. Bancassurance and Individual Insurance Policy is the same for them.

4.5 How likely are you going to have Bancassurance in near future?

Interpretation: Although majority of people consider Bancassurance beneficial but less %age is likely to have bancassurance in near future. 40% respondents said they are likely to purchase Bancassurance in near Future. Whereas 32% are unlikely. This Contrast in decisions may be due to several factors such as relationship with Bank Staff, level of satisfaction with existing Bank, Easy Accessibility and availability to bank etc.

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4.6

Factors affecting choice of Insurance Policy?

Interpretation: Tax Benefit is the biggest reason for the people to purchase Insurance Policies followed by Security. These are the two main considerations which influence the people to decide upon and buy the Insurance Products be it through Bank or through Individual Insurance Companies. 4.7 Most Preferred mode of buying an insurance policy.

Interpretation: 33

More than 40% people find it more convenient to purchase Insurance Policies from banks followed by sale through Companies and Agents. Very less people like to purchase Insurance Products from brokers.

4.8 Most popular Bank.

Interpretation: The study revealed that today Axis Bank is gaining popularity among people because of high degree of services provided by it i.e. understanding the needs of the customer, transparency in dealings and products, Promptness and updating the customers about its products. HDFC, PNB and SBI are also not very far and are likely to give tough competition while other banks not facing much fluctuations and showing steady movement.

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4.9 Improvements suggested by Customers.

Interpretation: When it comes to the satisfaction from the services, a high %age of customers suggested that the products and terms and conditions must be clear and transparent, merely writing *T&C APPLIED* is not enough and customers find it irritating. Their next suggestion is that the staff must be prompt to resolve their problems and queries. Few customers suggested about attractive schemes and offers while some %age were happy to be backbenchers and just watch the show.

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4.10 Correlation between Customer Satisfaction towards Banks and Products sale through banks.

Correlation: If the change in one variable affects a change in the other variable, the variables are said to be correlated. If the two variables deviate in the same direction i.e. if the increase (or decrease) in one results in a corresponding increase (or decrease) in the other, correlation is said to be direct or positive. Here in the sample the correlation between satisfaction level of the customers and 0.474769 i.e. the chances of Product sales are much higher in case the customer is satisfied with the Banking Services. Higher the customer satisfaction higher the Sales.

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5. Findings
This is evident from studies that customers have a lot of trust on banks and because of this trust the customers take Insurance Products from the Banks. Brand name and image of the Banks and the Insurance Companies plays important role in the selection of the Insurance product by the customer It is seen that private sector banks are leading in the business because of their quality service which is rarely seen in Govt. Sector Banks. Though general opinion about the Insurance is pretty good among the people but still most of the respondents are uncertain about Insurance as a good Investment option. Study shows that most of the people opt bank for Savings bank a/c but they are hesitant while opting for Insurance Product. However they know importance of Insurance It has been established from the study that the sale of product is directly proportional to quality of services. And its promotion is directly proportional to after sale service. It is found that lower middle class group falling within the slab of less than 5 lakh income, found it inconvenient to transact with banks for particularly Insurance Product. It is not so while going for a savings Bank A/c and Loans. Study revealed that the market has so many Banks and Insurance Companies giving a tough competition among them. Clientele is distributed among them and brand and better services attracting them. To promote bancassurance the Customer should be made aware that these bancassurance products are not sales driven but are need driven as per the requirements of the customers. 37

6. Conclusions

Our country has a vast population and still the majority is ignorant about the importance and benefits of the Insurance. Hence there is a great potential to approach and search for clientele among them. Necessity is opting for the better mode of approaching them through confident and trustworthy agents who can take pain to go door to door taking it as a social service. We have got vast market of customers as well as Banks and insurance Companies which are running with hands together and customers are almost evenly distributed. In this situation the bank alliance which is committed to provide better, genuine, transparent and prompt service will certainly lead.

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BIBLIOGRAPHY
Karunagaran, A (2006), Bancassurance: A Feasible Strategy for Banks in India? Reserve Bank of India Occasional Papers, Vol. 27, No. 3. Saravanakumar, S (Feb 2012), FLOURISHING BANCASSURANCE BUSINESS: AN INDIAN PERSPECTIVE, Zenith International Journal of multidisciplinary Research, Vol2(2). Veni, K Pushpa( Research Scholar) , Bancassurance- An emerging concept in India http://www.bancassuranceworld.com/india.html http://www.centralbankofindia.co.in/Site/MainSite.aspx?status=2&menu_id=81 http://articles.economictimes.indiatimes.com/2012-01-23/news/30655819_1_syndicate-bankinsurance-ventures-max-new-york-life

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