BANCASSURANCE

Submitted by:
Abhishek Tikmani
(abhi.tikmani@gmail.com; 9835746431)

Jaichandhar M
(jaichandhar@gmail.com; 9931114471)
 TABLE OF CONTENTS

SL. No. CONTENTS PAGE NO.

1. Executive Summary 3
2. Bancassurance = Insurer’s Product + Bank’s reach: 4
3. Bank and Insurance: Synergy 4
4. Business Model 6
5 Banks – The focal point 7
6. Bancassurance – global perspective 7
7. SWOT Analysis 9
8. Emerging Trends 9
9. The Challenges 10
10. Future outlook and Recommendations 11
11. References 13
12. Exhibits
a. Comparison of fees based income to total 14
incomes for banks
b. New business insurance sold by various 14
intermediaries (India)
c. Market Share per distribution network across 15
countries
d. Insurance policies sold via bancassurance in India 15

Executive Summary
2
Standard Chartered Bank Forms Bancassurance Alliance with Eagle Insurance (09/26/2006).
Bajaj Allianz Life Insurance has entered into bancassurance alliances with five co-operative
banks including Manjeri Cooperative Urban Bank Ltd (Kerala) and Hubli Urban Cooperative
Bank Ltd (Hubli). Aviva has a tied-up with ABN Amro to distribute its product globally (2004).
Dena Bank and Om Kotak Mahindra Life Insurance Company (OMKM) have announced a
strategic alliance for bancassurance for Indian consumers (February, 2003).

These news are just few samples that kept on hitting the headlines one after the other in
past few years. With the beginning of 21st Century, a new revolution in distribution of
insurance products emerged. The synergies between the banking and insurance industry
suddenly came to limelight and picked up like a wild-fire in a very short span. Equally
interesting is the fact that the concept got appreciated across all the countries; developed
and developing countries alike.

Bancassurance, the provision of insurance services by banks, is an established and growing

channel for insurance distribution, though its penetration varies across different markets.
Europe has the highest bancassurance penetration rate. In contrast, penetration is lower in
North America, partly reflecting regulatory restrictions. In Asia, however, bancassurance is
gaining in popularity, particularly in China, where restrictions have been eased. The research
shows that social and cultural factors, as well as regulatory considerations and product
complexity, play a significant role in determining how successful bancassurance is in a
particular market.

Despite having a relatively short history in India, bancassurance is already a major focus for
many companies and with a significant market share that is growing exponentially. Watson
Wyatt estimates that the current industry average of non-agency distribution of life
insurance in India is over 25 per cent and growing.

This paper would study and address the issues related to bancassurance, particularly in
India. Strategic considerations at macro economic level on future outlook have also been
discussed along with suggestions and recommendations to sustain the growth that it has
witnesses till now.

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 1. Bancassurance = Insurer’s Product + Bank’s reach:
To put in simple words, bancassurance is the provision of insurance banking products and
services through the distribution channel of a bank or to a common client base. The usage of
the word started picking up when the financial markets witnessed mergers and alliances
between the two booming segments – banking and insurance. According to a recent sigma
study, bancassurance is on the rise, particularly in emerging markets. Worldwide, insurers
have been successfully leveraging bancassurance to gain a foothold in markets with low
insurance penetration and a limited variety of distribution channels.

Banks world over have realized that offering value-added services such as insurance, helps
to meet client expectations.

• Competition in the Personal Financial Services area is getting `hot’ in India.

• Banks seek to retain customer loyalty by offering them a vastly expanded and more
sophisticated range of products.

Customers also want a “one-stop shop” for all their financial needs. Therefore banks are
trying to provide more services and integrate them into their business model.
Bancassurance is one such initiative. Further the risks involved in doing this business is very
low.

Banks are also trying to integrate this business into their own business. Customers would
also get this benefit as these products are offered not only by their sales force but also by
net banking and other IT enabled services like ATM etc. Insurance companies also have a
wide range of insurance products catering to a wide range of needs. Bancassurance is
beneficial for insurance companies as well as they would be cutting costs and cross-selling
apart from the wider reach of their insurance products.

In a country like India, where the need of insurance is not felt by customers, insurance
companies should try to exploit every opportunity of selling their insurance products which
Bancassurance promises.

2. Bank and Insurance - Synergy:

Synergy, as commonly defined is a mutually advantageous conjunction where the whole is
greater than the sum of the parts. Someone have very thoughtfully conveyed – “Synergy
lets you easily share a single mouse and keyboard between multiple computers, each with
its own display.” The synergy that the world is witnessing in bancassurance is no different.
The synergy here allows sharing of the same distribution channel and networks (mouse and
keyboard) between banking companies and insurance companies (multiple computers), each
with different nature and variety of product (display). The benefits that a bank can reap from
this form of alliance includes increased brand –equity, customer retention apart from the
revenues.

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 a. Fee-based income for bank – non-funds revenue:

Internationally, insurance activities contribute significantly to banks’ total domestic retail

revenues. Fee-based selling helps to enhance the levels of staff productivity in banks. This
is crucial to bring higher motivation levels in banks in India.

The revenue earned through bancassurance alliances are categorized as revenues through
fee based income. Such revenues are non-funds revenue and have an additional advantage
to the bank that it carries no capital reserve maintenance provision with it. Similarly,
increase brand equity and customer retention by becoming full-service provider is
something that every bank would care for.

Off late, all Indian banks are trying to increase their proportion of fee based income in their
total income. The trend is shown in Exhibit 1. This is because according to Basel norms, the
fee based income is risk-free and does not consume any capital.

b. Lower distribution costs:

Bancassurance has empirically proven to lower the distribution costs of insurers by 22-23%
due to high sales productivity. Selling insurance to existing mass market banking customers
is far less expensive than selling to a group of unknown customers. Experience in Europe has
shown that bancassurance firms have a lower expense ratio. This benefit could go to the
insured public by way of lower premiums. Further for any new entrant in the insurance
market, using the already established network and infrastructure of banks makes mores
sense than building the entire chain from the scratch.

Similarly, banks can put their energies into the `small-commission customers’ that insurance
agents would tend to avoid.
Use Bank’s
database for
target
segment
demographic
IT infrastructure Customizing
s
of the bank product to
(ATMs) the customer
Benefits to
the
insurance
company
Larger Structured
customer sales
base approach
More funds to
deploy into
investment

c. Customer relationships:

Insurance companies lag far behind in terms of effective customer relationship that they
could maintain. The trust and esteem with which a customer holds bank will not be same for
an insurance company. Similarly for banks, it gives them an opportunity to serve their
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existing customers better. Increased brand equity and customer retention by becoming full-
service provider is something that every bank would care for. There is now a need for
explicit distinction between at least three customer segments for bancassurance:

o The traditional "mass market" bancassurance

o Private Bancassurance (aimed at wealthy individuals)
o Corporate bancassurance and SMEs (small to medium-sized
enterprises) to reach their employees

d. Operational efficiency:

According to Boston Consulting group, the US banks were able to capture 10-15% of
investment and insurance markets by targeting 20% of customers and operate at expense
levels 30-50% lower than those of traditional insurers.

One of the most important reasons of considering Bancassurance by Banks is increased

return on assets (ROA). One of the best ways to increase ROA, assuming a constant asset
base, is through fee income. Banks that build fee income can cover more of their operating
expenses, and one way to build fee income is through the sale of insurance products. Banks
that effectively cross-sell financial product can leverage their distribution and processing
capabilities for profitable operating expense ratios.

The ratio of expenses to premiums, an important efficiency factor in insurance activities

through bancassurance is extremely low. This is because the bank and the insurance
company is benefiting from the same distribution channels and people.

3. Business Models:

The alliance between banks and insurance companies can be structured in varied manners,
depending upon the type of synergy one is looking for. Corporate Agency Model is slowly
gaining importance across various nations because of ease in implementation and
distribution of authority-responsibility relationship. Insurance products wrapped around the
bank's deposit and loan products (Wrapper Model) are also gradually gaining in popularity
due to their simple product design while the referral model tie-up has not been able to really
take off. The options available to the banks are:

• Banks selling products of their insurance subsidiary exclusively.

In this model, banks setups its own insurance subsidiary and sells its insurance
products. In this setup, the products of this insurance subsidiary are not allowed to be
sold by any other bank.

• Banks selling products of an insurance affiliate on an exclusive basis.

In this model, the bank gets into an agreement with an insurance agency and sells
their insurance product to its existing customers. In this setup also, the banks might
get into an exclusive agreement with the insurance company.

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 • Banks offering products of several insurance companies as `super market’.

Here the bank gets into agreement of selling insurance products of as much
insurance companies possible and sells it to its customers. Here the customers can
choose between wide ranges of products but the insurance companies would not
prefer this as their products would not be always preferred.

Corporate Broker model

A corporate broker is effectively a principal corporate adviser to an investment trust

company. Here the bank is acting as a corporate adviser to an insurance company. The
broker would make a certain amount of money from dealing commissions and market
making and a great deal more from relatively infrequent corporate deals. This relationship
does not end up in long term relationship or exclusive relationships between the bank and
the insurance companies.

Corporate Agency Model

In India, insurance companies prefer corporate agency tie-ups with banks, as against referral
arrangements. Another advantage for banks is that the risk is borne entirely by the
insurance company. The growth potential of corporate agency system is immense because
we can cross sell several products to our customers. Insurance agents sell only insurance or
mutual fund products. Innovation of products is also possible under the corporate agency
arrangement.

This model is attractive for the banks as it offers handsome returns (up to 35% in the first
year of new business procured) involves very low start-up costs (investment in the time and
licensing of employees) and the business risk is underwritten entirely by the insurance
companies. Insurance products wrapped around the Bank's loan and deposit products have
also been gaining in popularity due to their mass appeal and simple product design while the
referral model tie-ups have not been that successful. A few banks like Allahabad Bank and
Bank of India have even migrated from the referral model to the Corporate Agency model.

Traditional vs. Expanded Bancassurance Models:

In some markets, face-to-face contact is preferred, which tends to favour bancassurance

development. Nevertheless, 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 in product pricing or
through the appeal of convenience and innovation.

Finally, the marketing of more complex products has also gained ground in some countries,
alongside a more dedicated focus on niche client segments and the distribution of non-life
products. The drive for product diversification arises as bancassurers realize that over-
reliance on certain products may lead to undue volatility in business income. Nevertheless,
bancassurers have shown a willingness to expand their product range to include products
beyond those related to bank products.

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 4. Banks: The focal point :
Traditionally, the banks and financial institutions are the key pillars of India’s financial
system. Public have immense faith in banks. Share of bank deposits in the total financial
assets of households has been steadily rising (presently at about 40%). Indian Banks have
constantly proven their capability reach the maximum number of households. In India at
present there are total of 65700 branches of commercial banks, each branch serving an
average of 15,000 people. Out of these are 32600 branches are catering to the needs of
rural India and 14400 to semi-urban branches, where insurance growth has been most
buoyant. (196 exclusive Regional Rural Banks in deep hinterland.) Rural and semi-urban
bank accounts constitute close to 60% in terms of number of accounts, indicating the
number of potential lives that could be covered by insurance with the frontal involvement of
banks.

Further still banks sell a very small portion of the products (shown in Exhibit 2). This means
there is a huge scope of banks selling insurance products. A study conducted in US shows
that people are willing to buy insurance products from their banks as they consider banks as
a single point of buying all financial products.

Further there is a severe need of insurance for agriculture and other insurance products like
health insurance in the rural areas. Insurance companies would not be able to establish their
sales force in rural areas. As banks already have a strong foothold, it would be hugely
beneficial for the insurance companies.

5. Bancassurance – global perspective:

Bancassurance has seen tremendous acceptance and growth across nations. Although it
enjoys a penetration rate in excess of 50% in France, Spain, Italy and Belgium, other
countries have opted for more traditional networks. The Life insurance market in the UK is
largely in the hands of the brokers. With advent of bancassurance, their market share has
increased from 40% in 1992 to 54% in 1999. Sales agents also play an important role on a
market entirely regulated by the Financial Services & Markets Act (FSMA) which imposes
very strict marketing conditions. In Germany, the market continues to be dominated by
general sales agents, even if their market share has declined from 85% in 1992 to 54% in
1999. Market share per distribution network for insurance products across various countries
has been detailed in Exhibit -3

The following table compares the issues related to bancassurance in India with Europe and
Asia (general):

Europe Asia (general) India

Regulation Liberalized Ranging from Supportive
8
 liberalized to
forbidden
Mature markets but High growth
Market High growth
pension potential
growth reforms can spur growth
in the
life insurance sector
Highly integrated models Mostly distribution Distributive
Bancassur alliances and joint
ance
model ventures
Major Tax free
Tax concessions for life Squeeze on bank
drivers status
insurance premium paid margins on maturity
Squeeze on bank Insurers’ growing Small tax
margins cost relief
pressure and on premium
desire to
expand Narrowing
distribution bank
capability margin
Financial
deregulation
Foreign
companies use
bancassurance to
enter
Asian market
Products Mainly life insurance Mainly life Mainly non-
products insurance
to maximize tax benefits products linked to unitized
bank
Mostly single premium services and Regular
increasingly, premium
products
geared towards
managed savings
Distributio Multi-bank branches Mainly bank Bank
n branches branches
Major Domestic banks and Foreign NA
players insurers companies are
playing an
important
role.

Sophisticat Varied Low

High
ion

In several countries in LatinAmerica, banks have benefited from recent reforms – financial
deregulation, among others – by selling insurance products across the counter. An example
is the Brazilian market where private pension products are marketed. Bancassurance also
took advantage of the large number of national and especially international partnerships
which took place in the 1990s. In some countries, bancassurance is still largely prohibited.
9
Even in United States, it was legalized in after much deliberation, when the Glass-Steagall
Act was repealed after the passage of the Gramm-Leach-Bliley Act

Factors affecting growth in a country:

 The most crucial success factor is undoubtedly the legal and fiscal environment of the
country concerned. National regulations play a major role here which was illustrated
in Italy with the Amato Law authorizing banks to invest in insurance companies.
Conversely, the Glass Steagall Act slowed down the phenomenon in the United
States.

 Secondly, tax advantages encouraging personal savings: in France this was one of
the crucial factors of success.

 Lastly, cultural and behavioural factors: the good image of banks, their privileged
relationship with customers and the proximity of banking networks as in France,
Spain, Italy and Belgium. In countries where bancassurance has met with little
success, such as the United Kingdom or the United States, visiting the bank often
does not come naturally to customers.

Threats • Risks in integrating approach, thinking and work culture

6. Non-response from target customers because banks are considered as
insurance company agents by the customers Bancassurance in
India - A SWOT Analysis
In India, as elsewhere, banks are seeing margins decline sharply in their core
lending business. Consequently, banks are looking at other avenues, including
the sale of insurance products, to augment their income. The sale of insurance
products can earn banks very significant commissions (particularly for regular
premium products). In addition, one of the major strategic gains from
implementing bancassurance successfully is the development of a sales culture
within the bank. This can be used by the bank to promote traditional banking
products and other financial services as well. Exhibit 4 details the comparative
figures of bancassurance deals taken up by various Indian Insurance
companies.

Strength • Huge number of people without life insurance (91.73

s million out of 1 billion had life insurance in 1999)
• Millions of people travelling in and out of India can be
tapped for Overseas Mediclaim and Travel Insurance
policies
• 200 million households waiting for householder’s
insurance
• Good range of products from LIC/GIC
• Good amount of R&D into insurance
Weaknes • Not much IT initiative from leading insurance players
ses (LIC and GIC)
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 • Higher tax nets for the middle class
• No Tax exemptions for products like householder,
travel policies etc
• Inflexibility of the products
Opportun • Bank’s database can help insurance companies
ities devise policies
• Better IT infrastructure from the banks’s side can help
integrating
•
• Investors might suffer if the new rate of return on capital is lower
than the existing rate of return

7. Bancassurance: Emerging Trends

Though bancassurance has traditionally targeted the mass market, bancassurers have
begun to finely segment the market, which has resulted in tailor-made products for each
segment. The quest for additional growth and the desire to market to specific client
segments has in turn led some bancassurers to shift away from using a standardized, single
channel sales approach to adopting a multiple channel distribution strategy. Some
bancassurers are also beginning to focus exclusively on distribution.

Wealth management, pioneered by Lombard International Assurancehas found its way in

bancassurance alliances. Termed as Private Bancassurance, the concept combines private
banking and investment management services with the sophisticated use of life assurance
as a financial planning structure to achieve fiscal advantages and security for wealthy
investors and their families

As a medium of selling insurance products, Bancassurance moved from second position in

2004 to first position in 2006. Worksite marketing which was in the top position in 2004, fell
to fourth position in 2006. Bancassurance moved from second position in 2004 to first
position in 2006. Worksite marketing which was in the top position in 2004, fell to fourth
position in 2006.

Banks’ insurance sales are high in countries where the products tend to be relatively simple
and are a natural fit with banks’ existing products. The life insurance products most
successfully sold by bancassurers are mostly simple-deposit-substitutes such as single-
premium unit-linked or capitalization products. In France, financial institutions accounted for
66% of single premium unit-linked life business in 2005. In general, bancassurers have been
less successful in selling more complex savings products such as pensions.

Manhattan consulting group in its survey has found positive co-relation between number of
products an institution deal in an the attrition levels. It showed that with increase in product
count, the attrition level tends to decrease sharply as the employee engagement increases.

Quantum of products Attrition

levels

One Product (interest 27%

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 bearing account)

One Additional product 20%

2 or more products 17%

8. Bancassurance: The Challenges

Banks could be more enduring than individual agents when selling insurance, but
bancassurance relationships are not. Since the opening up of the insurance sector in ’00, as
many as six bancassurance alliances have ended in divorce says Economic Times.

If bancassurance was termed as marriage between banks and insurance, then the
probability of divorces can’t be ruled out. Critics opine that bancassurance is a controversial
idea, and it gives banks too great a control over the financial industry. The challenge to
sustain such alliances could be immensely daunting. The difference in regulation, not only
across countries but between banks and insurance industry as well has been cited as the
primary reason. The difference in trade customs, work culture in these industries is another
impediment

Sales front:

Bank employees are traditionally low on motivation. Lack of sales culture itself is bigger
roadblock than the lack of sales skills in the employees. Banks are generally used to only
product packaged selling and hence selling insurance products do not seem to fit naturally in
their system

HR issues:

Human Resource Management has experienced some difficulty due to such alliances in
financial industry. Poaching for employees, increased work-load, additional training,
maintaining the motivation level are some issues that has cropped up quite occasionally. So,
before entering into a bancassurance alliance, just like any merger, cultural due diligence
should be done and human resource issues should be adequately prioritized.

Public and private divide:

Private sector insurance firms are finding ‘change management’ in the public sector a major
challenge. State-owned banks get a new chairman, often from another bank, almost every
two years, resulting in the distribution strategy undergoing a complete change. In the
private sector, the M&A activity is one of the causes for change.

In the past, Dena Bank, which had originally partnered Kotak Mahindra Life, switched loyalty
to the public sector Life Insurance Corporation? So did Allahabad Bank, which had a tie-up
with ICICI Prudential Life Insurance. Punjab National Bank and Vijaya Bank have been forced
to drop their bancassurance partnerships after they chose to set up an insurance broking JV.

Group companies dilemma:

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The other conflict that most insurers face is when they have a bank within their own group.
Half of the insurance firms in India are part of a financial group that has a bank. They include
ICICI Bank, State Bank of India, ING Vysya, HDFC, Jammu & Kashmir Bank, and Kotak
Mahindra Bank. According to Rajesh Relhan, head of bancassurance, Aviva Life, there is a
fear among banks that at some point in future their insurance partner may end up cross-
selling banking services to their policyholders. Besides, companies that sell predominantly
through agents experience channel conflict when both agents and banks target the same
customer.

Operational Challenges:

The developments in the 21st century, particularly due to increase in non-life insurance
products pose further problems to the bancassurance alliances:

• The shift away from manufacturing to pure distribution requires banks to better align
the incentives of different suppliers with their own.
• Increasing sales of non-life products, to the extent those risks are retained by the
banks, require sophisticated products and risk management.
• The sale of non-life products should be weighted against the higher cost of servicing
those policies.
• Banks will have to be prepared for possible disruptions to client relations arising from
more frequent non-life insurance claims.
9. Bancassurance: Future outlook and
Recommendations:
The outlook for bancassurance remains positive. While development in individual markets
will continue to depend heavily on each country’s regulatory and business environment,
bancassurers could profit from the tendency of governments to privatise health care and
pension liabilities. In emerging markets, new entrants have successfully employed
bancassurance to compete with incumbent companies. Given the current relatively low
bancassurance penetration in emerging markets, bancassurance will likely see further
significant development in the coming years. We recommend following for sustainable and
inclusive growth in bancassurance alliances.

a. Bancassurance to Banc-sec-urance: A step towards Universal Banking

Securities business seems an automatic extension to bans and insurance. This integration
will be a step further towards universal banking and would leverage the efficiencies
developed by alliance of banks and insurance companies. It will be for customers who want
to get a one-stop shop for all financial products. So the banks should transform themselves
to a wholesome entity. This has to be integrated with the internet banking and other IT
infrastructure, for e.g. customers should be able to pay insurance premium, margin money
on security transaction via the net-banking facility and the ATM network.

b. Involvement of Co-operative banks:

Insurance industry has very low penetration rate in India. The market and scope in rural
India is immense and largely untapped. The insurance companies should actively try to
involve co-operative and regional rural banks amongst their potential alliances along with

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the big and multinational banks. These co-operative banks will have greater reach in villages
of rural India and will also operate at economic cost.

c. Minimize conflicts of interest between the bank and the insurer:

A formal and standard agreement between these banks and the insurance companies should
be taken up and drafted by an national regulatory body. These agreements must have
necessary clauses of revenue sharing. In case of possible conflicts, the bank management
and the management of the insurance company should be able to resolve conflicts amicably.
If they are not solved, there can be a apex body set up by IRDA to solve these types of
issues. This could be done by

 Setting up distribution procedures consistent with the manual systems in most banks.
 Establishing credible service level agreements between the bank and the insurer.

d. Involvement of senior bank management and skill development at the

operating level at bank branches:

The bancassurance alliances should be taken up at the top management level. Such
strategic actions require the senior management support not only during the decision stage
but also at the time of implementation. Their active participation in the process is very much
necessary for the success of such initiatives. The employee base that would be interacting
with the insurance customers should also be properly trained in order to equip themselves
with the skills required in selling insurance products. The bank employees would not be
aware of these selling skills if proper training is not given.

e. Bancassurance and pension sector:

Pension sector is at the verge of being deregulated. Once this sector is deregulated, banks
would get the dual benefits of managing these huge pension funds and the opportunity to
sell mainly health insurance products to these pension sector customers. Low cost of
collecting pension contributions is the key element in the success of developing the pension
sector. Money transfer costs in Indian banking are low by international standards. Portability
of pension accounts is a vital requirement which banks can fulfill in a credible framework.

f. Focus on Group insurance schemes:

Considering the behavior of the Indian customers, group insurance is the way to go about.
As joint accounts or individual accounts of families are very prominent, we will have to sell
these insurance products to these members of the family as a group.

This would be easier in terms of collection of premiums as 1 or 2 members of the family

would be working and linking insurance premiums from these savings/ salary accounts
would be easier and hassle-free.

g. Targeting frequent travelers (travel insurance):

In India, though some of the airlines have travel insurance, there is no income from these
frequent travelers. As frequent travelers are targeted by these airlines by giving

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concessional fares, banks can sell them travel insurance at some concessional premiums.
This would be additional revenue to the insurance company as well.

h. Tie-ups with residential complex builders (householder’s insurance):

House loans and householder’s insurance can be linked. Banks have huge exposures to
house loans. Now as far as the customers are concerned, they would prefer householder’s
insurance also as a package along with the house loans. The collection of premiums would
also not be a problem. Normally these customers give post-dated cheques. Therefore
premiums can also be collected in the similar fashion. Some concessions to the customers
can be given like extension of payment period etc. Insurance in business activities can also
be targeted as banks have considerable exposure to corporate loans.

i. National level healthcare programme:

Banks can play a major role in developing a viable healthcare programme in India. Only 2.5
million people have access to healthcare facilities. There is a growing demand for healthcare
products which banks can distribute (and facilitate administration). Banks would be the best
medium to distribute health insurance plans and create awareness amongst the people. The
Government of India and its planning commission can leverage this bancassurance concept
to launch a nation wide healthcare programme.

10. References:
1. R.Krishnamurthy, SBI Life Insurance, “Bancassurance in Insurance Distribution: Key
Issues in the Indian context”, FICCI seminar, October 2001

2. Watson Wyatt Bancassurance Benchmarking Study™ – India 2006

3. Stephen Clinton, “Bancassurance and worksite marketing: Developing alternate

distribution channels”, Montego Bay, June 2006

4. SCOR technical newsletter, “Bancassurance across the globe Meets with very mixed
response”, February 2003

5. Tapen Sinha, “Bancassurance in India: Who is tying the knot and why”; “Privatization
of the Insurance Market in India: From the British Raj to Monopoly Raj to Swaraj”,
CRIS, 2002

6. Bancassurance in Emerging Markets -"Building Perspective Partnerships" Jan 15,

2008 - Jan 16, 2008, Budapest, Hungary

7. Business of Insurance Information in Canada (www.insurance-canada.ca)

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 8. Sigma report, “Bancassurance: emerging trends, opportunities and challenges”,
Swiss Re, 2007

9. PriceWaterhouseCoopers report – “ Emerging trends and strategic issues in South

African Insurance”, 2006

10. Graham Morris, Watson Wyatt, “Bancassurance in the Indian Environment”

11. Annual report, Insurance Regulatory and Development Authority, India (IRDA), 2005-
2006

12. J. Tyler, Leverty, “Are synergies between banks and insurers hyped? Evidence from
Citigroup-Travelers divestiture, Virginia Commonwealth University (2006)

11. Exhibits:

Exhibit 1: Fee based income to total income for banks

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Exhibit 2: New Business (Life) Undertaken under various intermediaries (2005-
2006)

Corporate Agents Brokers Referrals Direct Business

Insurers Individual agents
Banks Others
1 2 3 4 5 6 7
Private insurers 59.71 16.87 8.92 0.83 7.06 6.61
LIC 98.37 1.25 0.32 0.06 0.00 0.00
Total 85.67 6.38 0.31 0.31 2.32 2.17

Exhibit 3: Bancassurance business conducted by companies

Exhibit 4: Policies sold by Indian Insurance players via bancassurance

Company % of policies
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ICICI Prudential 15% in 2002, 30% in 2004
SBI Life 15% in 2002, 50% in 2004
Birla Sun Life 25% in 2002, 40% in 2004
ING Vyasa Life 10% in 2002
Aviva Life 50% in 2002, 70% in 2004
Allianz Bajaj Life 25% in 2003
Royal Sundaram Allianz 40% in 2002
HDFC Standard Life 10% in 2002, 40% in 2004
MetLife 25% in 2002

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