PROJECT TOPIC BANCASSURANCE

PRESENTED BY ABHISHEK PARKAR

MEANING OF
BANCASSURANCE
The Bank Insurance Model (BIM ), also
sometimes known as Bancassurance , is the
partnership between a bank and an insurance
company whereby the insurance company uses
the bank sales channel in order to sell its
insurance products.
It is an arrangement in which a bank and an
insurance company form a partnership so that
the insurance company can sell its products to
the bank's client base.

Reason for choosing banks as a

channel to sell Insurance Products

Huge bank network- surpassed only by Postal dept

Public trust on Banking Institutions

Complementary nature of bank loans and insurance

products

Improved accessibility Core Banking System.

One stop shop convenience for customers.

The Ready Indian Market

1,00,000 + Bank branches Spread evenly across metros, urban,

semi-urban and rural areas.

Bankers knowledge of customers long standing relationship

provided total profile of the customer base and needs

Opening up of the markets - Introduction of liberalization policies and

deregulation of insurance sector.

Product Diversity - More number of products from Insurers (In place of

one standard medical policy of 90's we have numerous standard policies
)

The GenNext Demographic change to a huge young workforce with

disposable income, global exposure and IT industry unleashed a national
boom.

Support Regulation

IRDA came into existence in 1999 and the

Government of India notification( Banking
Regulation Act) dated August 3rd 2000,laid out the
Bancassurance clearance.

Notification of IRDA 2002 Paved way for Banks as

Corporate Agents.

RBI regulations allowed Banks to participate as

Corporate Agency with No Risk Participation or JV
with Risk Participation .

Genesis of Bancassurance

PSU General Insurers tied up with leading PSU and

Pvt. Banks from 2002 onwards.

Individual agent oriented products evolved into

Bancassurance friendly adaptations and aligned with
the bankers customer needs.

By 2005 ,the Bancassurance channel had established

as a mainstay in Marketing/ Sales, Growth path of
the Insurers.

Bancassurance Growth- 2010 &

2011

PLAN - Guaranteed Wealth Protector

Up to 60% Equity investment & 40% Debt Investment.
Auto asset allocation as per market conditions in Equity
& Debt.
Tax saving under section 80 C for the premiums paid
per year.
Wealth booster - 3.5% of FV on Maturity.
Loyalty additions - 0.25% of FV for 5years ( Starting
from 6th to 10th year)
Insurance Cover 10 times of annual investment.
Tax free returns under Sec 10 (10(D))
11% 17% returns on the total investment made.

Plan Balance Advantage Fund

18 months lock in period and this policy can be renewed after
the lock in period.
Minimum investment of Rs 10,000.
Have option of getting monthly dividends and also the option of
reinvesting the monthly dividend earnings.
In this case both the Premium and dividend are taxable. (Tax
benefits are available in case of long term investments in
Mutual funds)
Up to 30% investment in Debt products and 70% investment in
Equity products.
Average return of 20 % from previous issues of this mutual
fund scheme, but here returns are not guaranteed as mutual
fund investments are subjected to market risk.

Challenges in
Bancassurance

Banks will have to be prepared for possible disruptions to

client relations arising from more frequent non-life insurance
claims.

Banks to develop core teams to handle Insurance.

To suggest tailor-made products for specific industries ,

homogenous groups.

Online sale and issue of plain vanilla policies.

Reward schemes/ incentives to be well defined for employees

involved in Bancassurance.

THANK YOU