The Bancassurance in India is at present in its embryonic stage, but has the potential to grow and take deep roots within a foreseeable future due to pressure on insurance companies to lower customer acquisition costs andalso a new source of risk-free fee income for banks where income from traditional banking is declining. Selection of the right model, best operational practices and top management commitment will be critical in its growth. This article explains the prospects, strategies, challenges and mutual benefits of bancassurance in India.
Bancassurance is the new buzzword in the Indian banking industry. The business of banking around the globe is being changed due to integration of global financial markets, development of new technologies, universalization of banking operations and diversification in non-banking activities. Bancassurance, until recently, was predominantly confined to Europe. In the wake of convergence in the financial services industry, bancassurance operations have spread into all the continents, including Asia.
Following the opening up of the financial sector in general and the insurance sector in particular, the positive regulatory environment has sown the seeds of bancassurance in India. |
