Presentation by

Shri K Cherian Varghese

Chairman & Managing Director
Corporation Bank
 EVOLUTION OF BANCASSURANCE

• Insurance and investment – emerging new retail products for banks

• New business model – bank integrates insurance and investment business
into its core product offering
• Outstanding results for European Banks as a new avenue for enhancing
non-interest income streams
• Banks can leverage their network and high-tech electronic delivery
channels to offer bancassurance products through

 Branches
 ATM network
 Internet
 Call Center
 BANCASSURANCE STRATEGY – KEY STEPS
• ANALYSE AND CHOOSE TARGET SEGMENT
• Analyse existing customer profile & market potential
• Assess the assumptions about various segments

• FOCUS ON CUSTOMER NEEDS

• Provide easy-to-understand solutions with convenience
• Meet the needs of each segment – design the product accordingly
• Vast potential for ‘wealth Management’ by banks

• PRODUCT INNOVATION
• Design simple and easy to understand products
• Customer need centric
 BANCASSURANCE STRATEGY – KEY STEPS…….2
PRODUCT DELIVERY / DISTRIBUTION
• Utilize branch network for selling insurance products
• Value addition by leveraging systems and distribution channels like ATMs
/Internet/kiosks etc.

DEVELOP A BRAND STRATEGY

• Bank on the public opinion about traditional banks – “Trustworthy &
Accessible”
• Develop a holistic brand strategy
• Modify/restructure the organizational design to suit the emerging needs
• Product design – use segmentation approach rather than providing a vanilla
product across all segments
• Enhance multiple distribution channels – ATMs, Web Banking etc.
• Maintain relational database to develop appropriate products
• Human Resource – selection, training and motivation
• Develop a comprehensive compensation and incentive package
 BANCASSURANCE – INDIAN SCENARIO

• Increasing competition and thinning spreads – necessitated a

search for new avenues of income streams
• Bancassurance – a logical step
• RBI’s entry guidelines for banks to diversify into insurance
business
• Joint ventures with risk participation – financially strong
banks
• Commercial banks as corporate agents of insurance
companies – fee basis with no risk participation
MAJOR CONTRIBUTING FACTORS FAVOURING BANCASSURANCE

• Wide Network of branches

• Existing wide range of Corporate and Retail clients of banks –
potential business opportunities
• Wide customer database – an opportunity to study customer
spending habits, investment preferences etc if the database is
properly utilized
• Personalized single window service delivery – expertise in
offering quality service - cross selling becomes easy
• Rural Penetration – wide reach of banks in the rural segment
which is potential and untapped for insurance business
• Structure/design customer centric product and services to suit
the needs of every segment
 ISSUES TO BE FOCUSSED
• Evolving Regulatory Framework – Insurance Regulatory and
Development Authority [IRDA] guidelines
• Training for attitudinal changes – Bank staff should be trained
to cross sell the product during the course of their business
contact with customers – calls for professionalism in the
attitude and knowledge level of staff
• Consumer behaviour – the database available with the banks
should be properly analysed to trace the consumer behaviour
and accordingly the product/service innovation efforts to be
initiated
• Developing internal processes, procedures and systems
 ADVANTAGES TO BANKS

• Enhanced business opportunities

• Improved income streams – new avenues for generating fee
income – leads to increase in return on assets
• Increase in employee productivity – redeployment on
account of automation of branches
• Better customer service – a “One Shop” service offering
complete range of banking and insurance products and
services – resulting in higher customer retention levels
• Cross sell insurance products – leverage on face-to-face
contacts with the customer in the branches
 ADVANTAGES TO CUSTOMERS

• Comprehensive financial advisory services – banking and

insurance – under one roof

• Enhanced convenience – better follow-up and hassle

free after sales service

• Easy access for claims – regular visit to banks for other

purposes

• Availability of better product range

 ADVANTAGES TO INSURERS

• Access to the wide network of branches for distribution

of insurance products
• Penetration into untapped segments like rural
population through the vast network of bank branches
in rural areas
• Customizing products using bank’s customer database
to analyse customers’ financial standing, spending
habits, investment and purchase capability
• Banks have already established long standing
relationship with customers – it is easier for them to
sell insurance products
 BANCASSURANCE – THE FUTURE OUTLOOK

• Entry of big players – life and non-life segment –

immense competition – Better deal for the
customers
• Collaboration of ‘banks’ and ‘insurance companies’
will have profound impact on financial services
industry – enhanced customer satisfaction
• Vast potential for banks and insurance companies to
partner and develop the ‘under insured’ market in
India.
Thank You