Bancassurance is the convergence of Banking and Insurance. The term has its origin in France, involves distribution of insurance products through a bank's branch network. According to a recent sigma study, Bancassurance is on the rise worldwide It has a tremendous success story in Europe, but it is relatively new concept in Australia and Asia. In Asia, however, Bancassurance is gaining in popularity, where restrictions have been eased.

1. Bancassurance - A new marketing product for the Banks
- Dr. B.Krishnamurthy
Selection Grade Lecturer & Head, Dept. Of Commerce, R.T.E.S.College, Ranebennur.
dr_b_krishna@yahoo.co.in
Bancassurance is the convergence of Banking and Insurance. The term has its
origin in France, involves distribution of insurance products through a bank's branch
network. According to a recent sigma study, Bancassurance is on the rise worldwide It
has a tremendous success story in Europe, but it is relatively new concept in Australia
and Asia. In Asia, however, Bancassurance is gaining in popularity, where restrictions
have been eased.
Today, Insurance has become the proverbial goose laying golden eggs for public
sector banks. Banks are tapping new sources and finding ways to differentiate themselves
from other banks and non-banks and are increasingly venturing into the fee based
services like marketing of insurance etc. The technology forces the banks to develop a
strategy for online delivery system to broaden the customer relationship and to retain
customer loyalty. Today, the banks results in greater competition for the banks in the
technology pushes the delivery of services out of bank and the focus shifts from cost
reduction to maintaining market position.
Customers aspirations:
Today the customers are demanding fast, accurate and reliable services.
Therefore, adoption of technology is inevitable to respond to customers needs at all times
and at competitive prices. Anywhere banking facilities which offer access to banking
services at a place and time convenient to customers.
Banks are starting to embrace direct marketing and Internet banking as tools to
distribute insurance products. New and emerging channels are becoming increasingly
competitive, due to the tangible cost benefits embedded with the appeal of convenience
and innovation.

2. Today Many Indian banks are not only planning to enter the insurance sector due
to the huge growth and are setting up their own insurance companies. Most new insurers
have entered into memoranda of understanding with banks to use their branches as outlets
for marketing standard products. State Bank of India, Vysya Bank and J&K Bank already
has joint ventures in life insurance. Vijaya Bank and Punjab National Bank are in the
midst of finalizing life and non-life ventures. The Insurance Act allows only those
companies registered under the Companies Act to become Corporate Agents
Electronics and Information Technology are changing rapidly day by day. The
banking products and services are provided to consumers with complete ease and
maximum efficiency. Now a bank need not be limited by its physical establishments and
can have on-line presence to reach out the more customers. Liberalization and
globalization created the opportunity for banks to expand their business and compete not
only with local banks but also with foreign banks
IRDA, IBA & RBI are in discussions to iron out the various issues, as public sector banks
will play a key role in the distribution of products.
Thus, to increase their activity, they are marketing the insurance products by
themselves or on behalf of insurance company as Corporate Agents. It is estimated that
there is wide scope for the business revealed by many studies.
The year 2008, at least eight public sector banks are set to scrap their existing
Bancassurance tie-ups with insurers. They are: Bank of India, Union Bank, Karnataka
Bank , Allahabad Bank , Indian Overseas Bank , Bank of Maharashtra and Federal Bank.
Other banks, which are planning to start their own insurance companies, are Punjab
National Bank, Dena Bank and Bank of Baroda , according to industry sources.
The Associated Chambers of Commerce and Industry of India have projected the
insurance business to be worth around $60 billion by 2010. insurance business to be
worth around $60 billion by 2010. s.
The Indian banks are planning to enter the insurance sector on their own, without
partnering with insurance companies due to several reasons. One important reason is that
they would get better dividends than the commission. Moreover. this would help them to

3. diversify from the regular banking activity that they are involved in. The foray of banks
into insurance seems to have affected insurance companies.
Bancassurance accounted for about 20-30 per cent of premium income of private
insurers last year, sources said. Private insurers collected new business premium income
of around Rs 18,980 crore (Rs 189.8 billion), according to statistics from the Insurance
Regulatory and Development Authority.
The business of insurance in the country is expected to increase due to the growth
in the categories of semi- urban and rural insurance and is expected to be worth about
US$
IRDA:
To protect the interests of the policyholders, to regulate, promote and ensure
orderly growth of the insurance industry and for matters connected therewith or
incidental thereto Insurance Regulatory and Development Authority has been established
by passing a special Act in the parliament in the year 1999 and it is came into effect from
1-04-2000.. Today we have came into effect from 1-04-200.. HDFC Standard Life
Insurance Company Ltd. Is the first company registered as Insurance co. Following are
the list of Insurers
List of Registered Life Insurers with the IRDA:
S.No. Registration Date of Reg. Name of the Company
Number
1 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2 104 15.11.2000 Max New York Life Insurance Co. Ltd.
3 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd.
4 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Limited
5 109 31.01.2001 Birla Sun Life Insurance Company Ltd.
6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.
7 111 30.03.2001 SBI Life Insurance Company Limited .
8 114 02.08.2001 ING Vysya Life Insurance Company Private Limited
9 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited
10 117 06.08.2001 Metlife India Insurance Company Ltd.
11 121 03.01.2002 Reliance Life Insurance Company Limited.

4. 12 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.
13 127 06.02.2004 Sahara India Insurance Company Ltd.
14 128 17.11.2005 Shriram Life Insurance Company Ltd.
15 130 14.07.2006 Bharti AXA Life Insurance Company Ltd.
16 133 04.09.2007 Future Generali India Life Insurance Company
Limited
17 135 19.12.2007 IDBI Fortis Life Insurance C
18 136 08.05.2008 Canara HSBC Oriental Bank of Commerce Life
Insurance Company Ltd.
19 138 27.06.2008 Aegon Religare Life Insurance Company Ltd.
20 140 27.06.2008 DLF Pramerica Life Insurance Company Ltd.
21 142 Star Union Dai-ichi Life Insurance Co. Ltd.,
The insurers were of Banks and Non-Bank organizations.
Here is a few Insurance Company ventured with Bank:
1. SBI Life Insurance Company Limited:
It is a joint venture between the State Bank of India and BNP Paribas Assurance
registered with IRDA on 30.03.2001: The Share Capital is a follows:
State Bank of India --- 74%
BNP Paribas Assurance --- 26%.
State Bank of India enjoys the largest banking franchise in India along with its 7
Associate Banks, with a strength of over 14,500 branches across the country, arguably
the largest in the world.
BNP Paribas Assurance is the life and property & casualty insurance unit of BNP
Paribas - Euro Zone’s leading Bank. BNP Paribas is one of the oldest foreign banks with
a presence in India dating back to 1860. BNP Paribas Assurance is the fourth largest life
insurance company in France. BNP Paribas Assurance operates in 41 countries mainly
through the bancassurance and partnership model.

5. 2. Canara HSBC Oriental Bank of Commerce Life Insurance Company
Limited:
It is joint venture of Canara Bank, HSBC and Oriental Bank with the following
equity.
1. Canara Bank - 51%
2. HSBC Insurance (Asia Pacific) Holdings Ltd - 26%
3. Oriental Bank of Commerce - 23%.
The Venture has an initial paid up capital of INR 325 Crores. The Company
commenced its business on 6th of June, 2008 after receiving requisite approvals from the
Insurance Regulatory Development Authority (IRDA). Canara HSBC Life has access to a
distribution network of over 4100 branches all over India.
3. ING Vysya Life Insurance Company Limited (ING Life):
Started operations in India in September 2001. ING Life has a pan India presence
in 234 cities, with over 367 sales teams. ING Life is staffed by 7,926 employees and over
69,113 advisors. The Company has a diversified distribution platform and includes both
Tied Agency and Alternate Channels. The Alternate Channels business within ING Life
includes Bancassurance (ING Vysya Bank), Referral Banks, Corporate Agents, Brokers
and SMINCE.
Corporate Agents:
Corporate Agents are those companies who have the principal business other than
insurance. Thus, today many banks are undertaking insurance activity to increase their
income and attract the new customers with the existing human resource and the use of
communication and information technology.
The share of corporate agents which was 8.42 per cent in 2006-07 has increased
to 12.33 per cent in 2007-08. Within the corporate agency channel, while the banks’
share grew from 5.46 per cent in 2006-07 to 7.97 per cent in 2007-08, The share of
corporate agents in the new business premium procured by the private life insurers was
significant at 29.92 per cent in 2007-08 as compared to 24.99 per cent in 2006-07, while
for LIC the share fell to 1.59 per cent in 2007-08 from 2.14 per cent in the previous year.

6. .
Micro-insurance:
Micro-insurance, the term used to refer to insurance to the low-income people.
Historically in India, a few micro-insurance schemes were initiated, either by non-
governmental organizations (NGO) or by the trust hospitals.
These schemes have now gathered momentum partly due to the development of
micro-finance activity, and partly due to the regulation that makes it mandatory for all
formal insurance companies to extend their activities to rural and well-identified social
sector in the country (IRDA 2000).
The overall market for micro insurance is estimated to reach Rs. 250 billion by
2008 (ILO 2004). Tata AIG Life - First insurance company to launch Micro Insurance
Scheme.
Tata AIG Life Insurance Company Limited
Tata AIG Life is a joint venture company formed by the Tata Group and
American International Group, Inc. (AIG). The Tata Group holds 74 per cent stake in the
insurance venture with AIG holding the balance 26 per cent.
Tata AIG Life provides insurance solutions to individuals and corporates. Tata
AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and
started operations on April 1, 2001.

7. List of Micro Insurance Institutions and their Products as on 20.03.2009
Sl.No Name of Insurer Name of the Product
1.Bajaj Allianz Jana Vikas Yojana
1 Bajaj Allianz Life Insurance Co. Ltd. 2.Bajaj Allianz Saral Suraksha
Yojana.
3. Bajaj Allianz Alp Nivesh
Yojana
2 AVIVA Life Ins. Co. India Pvt. Ltd. Grameen Suraksha
3 Birla Sun Life Insurance Co. Ltd. 1. Birla Sun Life Insurance Bima
Suraksha Super
2. Birla Sun Life Insurance Bima
Dhan Sanchay
4 ICICI Prudential Life Insurance Co. Ltd ICICI Pru Sarv Jana Suraksha
5 ING Vysya Life Insurance Co. Ltd. ING Vysya Saral Suraksha
6 Life Insurance Corporation of India LIC's Jeevan Madhur
7 Met Life India Met Vishwas
8 SBI Life Insurance Co. Ltd. 1. SBI Life Grameen Shakti
2. SBI Life Grameen Super
Suraksha
9 TATA AIG Life Insurance Co. Ltd. 1. Ayushman Yojana
2. Navkalyan Yojana
3. Sampoorn Bima Yojana
4. Tata AIG Sumangal Bima
Yojana
10 Sahara India Life Insurance Co. Ltd. Sahara Sahayog (Micro
Endowment Insurance without
profit plan)
11 Shriram Life Insurance Co. Ltd. 1. Shri Sahay
2. Sri Sahay (AP
12 IDBI Fortis Life Insurance Co. Ltd. 1. IDBI Fortis Group
Microsurance Plan
2. DLF Pramerica Sarv Suraksha
13 Star Union Dai-ichi Life Insurance Co Ltd. SUD Life Paraspar Suraksha Plan

8. Impact on Human Resources:
Information technology has resulted in improved efficiency, innovative products
and effective delivery systems for the banks. However, the employees have the fear of
job security due to introduction of computer skilled employees and reduction in jobs
Conclusion:
The Banks have wide scope to market the product. However, it require the good
aptitude of the existing workers. As this is an extra work, the workers will be given
incentive. As the facilities provided by the banks increases, so is an increase in the
demands of the customers. Thus, the banks have to continuously evolve newer techniques
for making business transactions better, faster and more efficient.
The 21st century banking has become only customer driven and technology drive.
The challenges are competition, customer expectation, reduction of costs and
enhancement of efficiency. Thus the new products and services delivery systems, need,
training and retraining of staffs and retention of highly specialized to become the vital
factors for banks.