An empirical investigation of changes in banks income by bancassurance business

Insurance is the backbone of country's risk management system and influences the growth of an economy in several ways. Penetration of insurance largely depends on availability of insurance products, insurance awareness and quality of services. The essence of insurance is the elimination of risk and substitution of certainty for uncertainty. The insurance sector has seen substantial changes in the policy in the last decade, the most important being breaking the monopoly of public sector both in the life and non-life segments. The similar developments in banking sector lead to almost a similar requirement felt by the banking companies. The objective of the present paper is to analyze the financial impact of banc-assurance business on performance of the banks and to compare the financial position of banks dealing in insurance. The paper concludes that bancassurance is a petite earner for the banks but if it used effectively then this will certainly be the good source of fee-based income for banks. Growth rate of insurance income is remarkable in some of the banks so there is scope of selling bancassurance products by the banks in the long run.