An Analysis of Effectiveness of Bancassurance As A Distribution Channel in India
Journal Title: PARIPEX-Indian Journal of Research - Year 2016, Vol 5, Issue 5
Abstract
Bancassurance, which basically involves banks acting as corporate agents for insurers to distribute insurance products, has evolved as a strong distribution channel in many countries. Following the deregulation of the Indian insurance industry and amendment of the insurance law, Indian banks have been looking towards bancassurance as a logical step in the expansion of their business and have planned to venture into this lucrative segment which has hitherto been dominated by few public sector companies. Similarly, new insurers have also viewed banks as an ideal mechanism to gain distribution power. The present paper is an exploratory study to understand the effectiveness of Bancassurance on three dimensions : 1. The motivating factors behind the Bancassurance 2. Potential benefits of Bancassurance 3. Implementation problems of Bancassurance Factor analysis used to conclude the findings on one hand has identified greater fee based income, improved profit margins, effective utilization of the resource are the motivators for banks to enter into bancassurance, on the other hand factors such as expansion of the existing market , access to ready client base of banks and encashing the brand name of the banks motivate insurance companies for the same. It also reveals that customers prefer bancassurance to purchase a policy due to more benefits and authenticity. The study concludes that successful bancassurance partnerships in India is due to the fact that by entering into this both parties have win- win proposition since there is nothing to lose.
Authors and Affiliations
Dr. M. N. Periasamy, A. Narmatha, E. Ananthi
Keywords
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