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    Bancassurance: Products, Training and Profit

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    shrivikram_795320213
    Bancassurance involves banks partnering with insurance companies to sell insurance products to their customers. There are several reasons for banks to enter into these partnerships, including diversifying their business, improving customer loyalty through a one-stop-shop for financial products, and generating a new source of profit. Regulations in India govern the structure of bancassurance partnerships between banks and insurers. As customers' needs evolve, bancassurance provides opportunities for banks to protect the assets of older customers and meet their insurance and investment needs, representing a significant business opportunity.

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    Bancassurance: Products, Training and Profit

    Uploaded by

    shrivikram_795320213
    205 views11 pages
    Bancassurance involves banks partnering with insurance companies to sell insurance products to their customers. There are several reasons for banks to enter into these partnerships, including diversifying their business, improving customer loyalty through a one-stop-shop for financial products, and generating a new source of profit. Regulations in India govern the structure of bancassurance partnerships between banks and insurers. As customers' needs evolve, bancassurance provides opportunities for banks to protect the assets of older customers and meet their insurance and investment needs, representing a significant business opportunity.

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    Bancassurance is a growing field

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    bancassurance

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    Bancassurance involves banks partnering with insurance companies to sell insurance products to their customers. There are several reasons for banks to enter into these partnerships, including diversifying their business, improving customer loyalty through a one-stop-shop for financial products, and generating a new source of profit. Regulations in India govern the structure of bancassurance partnerships between banks and insurers. As customers' needs evolve, bancassurance provides opportunities for banks to protect the assets of older customers and meet their insurance and investment needs, representing a significant business opportunity.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    205 views11 pages

    Bancassurance: Products, Training and Profit

    Uploaded by

    shrivikram_795320213
    Bancassurance involves banks partnering with insurance companies to sell insurance products to their customers. There are several reasons for banks to enter into these partnerships, including diversifying their business, improving customer loyalty through a one-stop-shop for financial products, and generating a new source of profit. Regulations in India govern the structure of bancassurance partnerships between banks and insurers. As customers' needs evolve, bancassurance provides opportunities for banks to protect the assets of older customers and meet their insurance and investment needs, representing a significant business opportunity.

    Copyright:

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    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    BANCASSURANCE

    Products, Training and Profit

    Products

    BANCASSURANCE

    Why ?

    Bancassurance : why? - Diversification of banking activities - Improvement of customer loyalty Why entering into ? - Convergences of bank and insurance activities - Complementarity in economical cycles - Complementarity of the risks - To put on end to the market share's decrease on the saving products - A new source of profit - One contact bringing financial and insurance solutions
    2

    BANCASSURANCE

    Why ?

    Credit Life Insurance Buy a house

    Property Insurance

    Motor Insurance

    Why entering into ?

    Child Education

    Client

    Buy a car

    Unit Linked Product

    Save for retirement

    Credit Life Insurance

    Life Insurance

    INSURANCE BANKS

    CUSTOMERS

    COMPANIES

    Better utilization of manpower. Product diversification fee income

    Convenience One stop shop

    Expand customer base Increase in volume and profit Improved brand equity Marketing experience

    Reduced price
    Better service High quality.

    In traditional roles neither insurers or banks can effectively do bancassurance.

    BANK CAPABILITIES

    INSURANCE CO.S CAPABILITIES

    *own proprietary database * Strong name recognition & reputation (local & regional) * Managing multiple distribution channels * Cross selling banking products

    * developing insurance products * face to face selling * underwriting experience * managing long tail products

    Satisfied customer increased penetration of insurance products

    Regulations under RBI and IRDA:The Reserve Bank of India and the insurance development and regulatory authority have a set of guidelines for companies that couple to form bancassurance. Based on the equity a bank should hold in joint venture, the highest allowable value of equity, the type of banks and insurance companies that can couple together and the operation of bancassurance are all the factors that are regulated by RBI and IRDA. The IRDA has very recently drafted guidelines to promote open architecture in bancassurance. Currently a bank has a tie-up with only one life insurer and one nonlife insurer. But in the new model the banks necessarily have to have multiple tieups. The country is divided into zones and every bank has to choose multiple insurers within the zones. With this the customer will have a wider range of insurance products offered by different insurers. It will also lead to a deeper penetration in the selling of insurance products.

    Bancassurance companies:e JV between BNP Paribas Cardif and SBI

    JV between ICICI and Fairfax Tie up between IDBI,Federal Bank,Aegis

    Tie up with Old Mutual Life Insurance Corporate Agent for LIC

    Different Bancassurance Models


    Integrated

    Bank
    Agents

    Insurer Agents to place at bank branches Mine on banks client base telemarketing

    Non integrated

    No agent at branches Banks RMs to sell

    Bank

    Insurer

    Bank

    Insurer

    Brokers model

    Bank
    8

    Partnership - Leads referral from bank on commercial business; brokers to recommend business

    Broker

    Evolving customer needs: a Golden Opportunity for Banks


    Older customers have different financial needs

    Financial needs map


    High

    Bank (Credit) Products

    Over 50s possess 70% of all financial assets These individuals and their assets need protection (insurance) and investing no longer borrowing Equally applicable in Developed and Emerging Markets This sea change too big an opportunity to miss and should build on HSBC credit credentials

    Wealth

    Low

    Insurance investment needs

    Youth

    Mature

    Client time

    Meeting Stakeholders Needs


    A three-way all-win solution Maximising business performance and potential

    One-stop shop, holistic solutions

    Customers
    A new distribution channel in addition to the traditional Agency & Direct

    A tool for deepening banking customer relationships & driving NFI

    Bank
    10

    Insurer

    Products align with different market segments


    The selling model(s) chosen impacts product, distribution channel, staff selection and training, marketing, sales processes and support etc

    ADVISORY
    5. Advisory

    NEEDS BASED
    3. Simple standalone / packaged

    4. Advanced standalone

    Sales complexity increases


    As per Advanced Stand-alone but formal recommendation s made

    TRANSACTIONAL
    1. Targeted outbound for simple products

    2. 2. Co-incidental Co-incidental

    Whole life Endowments Personal Accident Mortgage Reducing Term (cross sales for Fire buildings and contents) Home Contents Travel Basic Term Complex riders

    Critical Illness
    Income Protection Unit Linked Life Annuities

    Accidental Death Personal Accident Hospital Cash 11

    Creditor on Credit Cards


    Motor (with car loans)

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