Advantages and disadvantages of bancassurance
For instance: Max Life consolidated 60 branches and closed down to increase efficiency and bring down costs in Therefore, the propensity to buy insurance products from their banks is higher.
Critical issues of bancassurance
The leading retail banks then refocused their sales and marketing policies on branch customers and reactivated their dormant insurance businesses. This is a system in which a bank has a corporate agency with one insurance company to sell its products. Insurance used to be the missing piece of the puzzle which Bancassurance now completes. In that context too the bankers are better placed in extending such analysis or financial advisers to the customer because of their well established long cherished relationship. Bancassurance proper first appeared in the s in France, when banks were granted permission to market insurance products. Further service aspect can also be tackled easily. Insurance sector during post reforms-A Snapshot 3.
Hopefully, now these advantages of bancassurance for customers are clear to you. Reasons for Banks to enter into Bancassurance.
Post navigation. Customers want a solution and not just a product. Handling of customers: With customer awareness levels increasing, they are demanding greater convenience in financial services.
However, beyond this definition, bancassurance business models vary widely from country to country.
Innovative and better product ranges. Why is Bancassurance more suited to Life Insurance products? Due to all these movements, the boundaries that have kept various financial services separate from each other have vanished. The carriers and banks can use this information to forge intelligent engagement workflows and to customize relevant insurance covers.
Problems of bancassurance
Bancassurance has grown at different places and taken shapes and forms in different countries depending upon demography, economic and legislative prescriptions in that country. Advantages to Consumers Comprehensive financial advisory services under one roof. In that context too the bankers are better placed in extending such analysis or financial advisers to the customer because of their well established long cherished relationship. It is called as fee-based income. All the people involved in selling should under-go mandatory training at an institute accredited by IRDA and pass the examination conducted by the authority. The advantage of bancassurance is just that: a Right Product: It provides the end users a customized insurance solution. In Indian case, ICICI bank and HDFC banks in private sector and State Bank of India in the public sector, have already taken a lead in resorting to this type of bancassurance model and have acquired sizeable share in the insurance market, also made a big stride within a short span of time. Through bancassurance, their market penetration goals can thus be met in a much shorter timeframe than through an agency channel. Enhanced convenience on the part of the insured. Relevant Offer Generation and Customer Engagement Banks have a huge amount of data on their customers. This can be explained in detail below. Even in the case of developed countries the financial literacy and financial analysis has been increasingly stressed in recent years, these become essential especially when assessment involves long term investments. Increased Customer Lifetime Value With increased loyalty and stickiness, comes higher CLV per customer which is a very important metric for banks. In the EY bancassurance study conducted in Brazil, a timely response was rated highly in the decision to buy insurance. As the channel continues to grow, it would help to understand the different advantages of bancassurance for all the parties involved.
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