Bancassurance – A new channel for emerging growth of Indian insurance industry

Bancassurance simply means selling of insurance products by banks. In this arrangement, insurance companies and banks undergo a tie-up, thereby allowing banks to sell the insurance products to its customers. In India, the insurance companies opened up to Bancassurance in 2002. This study makes an attempt with the objectives to examine the recent trends in Bancassurance business in India and to analyze the growth in bank tie-ups with insurance companies in India. At present 91 banks have tie up with insurance companies. The new IRDA guidelines for Bancassurance have increased the disclosure norms for the banks and insurance companies and restricting the number of tie-ups. While comparing various insurance products in the Bancassurance, the survey reveals that the motor insurance is the top selling product for general insurers through the bank and non-banking financial companies channel followed by Personal Accident insurance, Housing insurance and Property insurance. The future of the Bancassurance depends on how well the banks and insurance companies are able to overcome the operational challenges that are being constantly thrown at them.