What is Bancassurance? Bancassurance is the marketing of insurance products through banks. Banks, apart from the regular products of deposits and advances, investments and others, are also involved in the sale of insurance products, both life and non-life, in order to increase the basis of their income fees, and benefit from the inherent advantages as a well-established supermarket financial shops
benefits Bancassurance:
- banks have several advantages compared with insurance companies that make them the perfect vehicle to convey the message of the insurance on the masses, across a wide segment of the community, and in the process increase their business and improve the final result of their own. By marketing a full range of insurance products in the life and non-life sectors, banks, spread not only awareness of these products and services among the people, but also make a handsome amount of money by expanding the scope of this service.
- believe that banks have a more personal relationship with the audience and a better understanding of their financial needs. And therefore people are more responsive to the advice of their own Banker.
- bank employees are familiar and comfortable with the financial terms and the language, and so can easily learn the subject of insurance, in order to sell these products. Moreover, they are good at number crunching, and make a sales pitch, which gives it a clear advantage.
- banking and insurance products are often combined to provide the best products to the consumer a combination, in order to benefit from the advantages of both products and services.
- provide insurance products through the banking channel enables insurance companies rely less on agents to sell their products. It costs a lot of insurance companies to identify, train, motivate and reward insurance agents to push their products.
- is mutually beneficial to banks and insurance companies, and when insurance products through banks sell, because both of them can take advantage of products and services to each other.
- banks access to an additional source of income, fees and commissions from their own insurance companies. Especially the excessive competition for products based on interest rates has affected the final outcome of the banks who are trying to build alternative sources of income, through the provision of banking products and services is.
- banks in response to the two categories of customers- classes and masses. Insurance companies can take advantage of this by paying the related products through this distribution channel. Simple products for the masses, and the most advanced classes.
other side of the Bancassurance:
- bancassurance not rosy all the way each of the bankers, as well as insurance companies. There are many issues that both of them are concerned.
- one of the most important issues and even the fear of losing business bankers and insurance companies, with respect to similar products. For example, a core banking products such as fixed deposit can be placed at a disadvantage compared with the insurance product related to the capital market that offers all of the growth, as well as insurance coverage.
- Insurance companies have their perceptions of bankers and marketers is often bankers are not doing enough to push their products.
- banks feel that insurance companies earn more bancassurance, as they do not bear spending on infrastructure, manpower, etc., while back back on the banks of this business is not worth the trouble taken by them.
- when the banks are trying to cut costs by providing more and more services away, there is a sense that the insurance agents on-site service (by banks), you may not be practical, as it only adds to their costs.
- banks also stand the risk of facing the wrath of customers for poor follow-up services, such as the settlement of the claim, etc., on the part of insurance companies.
- Bankers may not appreciate some of the minute of the insurance products they sell points, and thus face administrative and legal hassles of customers.
These are some of the issues related to the banking insurance from the perspective of both the bankers and insurers. This service's success depends on the success of the parties concerned, ie, bankers and insurance companies filter their problems to each other, and move forward with the business to make money, without cutting the cake into each other.
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