A PROJECT REPORT

ON
“A STUDY ON CUSTOMER PREFERENCE TOWARDS BANCASSURANCE SCHEME PROVIDED BY
BANKS”

Bachelor of Management Studies

Semester VI
Submitted
In Partial Fulfillment of the
requirements For the Award of Degree
of
Bachelor of Management Studies
By
Rishabh Divekar

STERLING COLLEGE
OF COMMERCE,
NERUL (EAST), SEAWOODS, NAVI-MUMBAI,
MAHARASHTRA,
1
400706

2
 DECLARATION

I, the undersigned Mr. RISHABH DIVEKAR here by, declare that the work embodied in this project
work titled “A STUDY ON CUSTOMER PREFERENCE TOWARDS BANCASSURANCE
SCHEME PROVIDED BY BANKS forms my own contribution to the research work carried out
under the guidance of ASST. PROF SAURABH LAD. is a result of my own research work and has
not been previously submitted to any other University for any other Degree/ Diploma to this or any
other University. Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography. I, here by further declare that all information of this
document has been obtained and presented in accordance with academic rules and ethical conduct.

Name and Signature of Learner

(RISHABH DIVEKAR )

3
 CERTIFICATE
This is certified that the report entitled “A STUDY ON CUSTOMER PREFERENCE
TOWARDS BANCASSURANCE SCHEME PROVIDED BY BANKS submitted by
RISHABH DIVEKAR for the fulfillment of the requirement for the degree of Bachelor of
Management Studies of the University of Mumbai, is his original research work carried out under my
supervision. To the best of my knowledge, the results presented have not been submitted in part or full
for any other diploma or degree of this or any other University

Asst..Prof . SAURABH LAD

(signature of guiding Teacher)

Dr.Madhuri Kamble Dr.K.Ravivarma

(Coordinator) (Principal)

4
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous. I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me the chance to do this project.
I would like to thank my COLLEGE for providing the necessary facilities required for
completion of this project.
I take this opportunity to thank our BMS Co-ordinator , for his moral support and guidance.
I would also like to express my sincere gratitude towards my project guide Mr. Saurabh lad whose
guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference books and magazines
related to my project.
My genuine thanks are due to the rest of the workforce,
Ultimately, no words can satisfactorily offer my obligation of thanks to my parents and my parents in law
for producing in me a lasting interest in higher investigations

5
 INDEX

SR NO CONTENT PAGE NO
1 CHAPTER 1

INTRODUCTION
7-20

2 CHAPTER 2

RESEARCH METHODOLOGY 21-23

3 CHAPTER 3

LITRATURE REVIEW 24- 40

4 CHAPTER 4

DATA ANALYSIS, INTERPRETATION 41-53

AND PRESENTATION

5 CHAPTER 5

CONCLUSION

6 CHAPTER 6

BIBLIOGRAPHY

7 CHAPTER 7

QUESTIONNAIRE

6
 Chapter -1

INTRODUCTION
1.1 Executive summary
The business of banking around the globe is changing due to integration of global financial markets,
development of new technologies, universalization of banking operations and diversification in non-
banking activities. Due to all these movements, the boundaries that have kept various financial services
separate from each other have vanished. The coming together of different financial services has
provided synergies in operations and development of new concepts. One of these is bancassurance.
Bancassurance simply means selling of insurance products by banks.
In this arrangement, insurance companies and banks undergo tie-up, thereby allowing banks to sell
theinsurance products to its customers. This is system in which bank has corporate agency with one
insurance company to sell its products. By selling insurance policies bank earns revenue stream apart
from interest. It is called as fee-based income.

This income is purely risk free for the bank since the bank simply plays the role of an intermediary for
sourcing business to the insurance company. It has its genesis decades ago in France, where this
channel today is the predominant source of insurance business. It has grown at different places and
taken shapes and forms in different countries depending upon demography, economic and legislative
prescription in that country. In some countries, bancassurance is still largely prohibited, but it was
recently legalized in countries such as the United States, when the Glass-Steagall Act was repealed
after the passage of the Gramm-Leach-Bliley Act. Bancassurance is new buzzword. It originated in
India in the year 2000.

Following the recommendations of First Narasimha Committee, the contemporary financial landscape
has been reshape thus, present-day banks have become far more diversified than ever before.
Therefore, their entering into insurance business is only natural corollary and is fully justified too as
'insurance' is another financial product bc required by the bank customers. From the view point of
insurance industry also the importance of bancassurance was felt necessary. With the increased
pressures in combating competition, companies are forced to come up with innovative techniques to
market their products and services. At this juncture, banking sector with it's far and wide reach, was
thought of as potential distribution channel, useful for the insurance companies. That's where the
bancassurance came into existence. Thus, bancassurance is poised to become key determinator
differentiating factor in the Insurance industry as well. Given

7
India's size as continent it has, however, very low insurance penetration and low insurance density.
The penetration level of life insurance in the Indian market is abysmally low at 2.3% of GDP with only
8% of the total population currently insured. opposed to this, India has well-entrenched wide branch
network of banking system, which only few countries in the world could match with. It is predicted by
experts also that in future 90% of share of premium will come from Bancassurance business only. And
almost half of the population likely to be in the 'wage earner' bracket by 2010 that there is every reason
to be optimistic that bancassurance in India will play long inning. Currently there are more and more
exchange of wedding rings between banks and Insurance Company for better business prospect in
future.
Finance sector of an economy is not exempted from competition that arises due to globalization,
liberalization and technological advancements. These external environmental forces to businesses
influence banks to search for alternative ways of managing the situation. It becomes a need and an
ongoing process for firms to be innovative and creative.Deregulation in the modern banking has
allowed banks to equally compete with the other segments of the financial sector. One area that
deserves particular attention is regarding the bancassurance. Bancassurance is a French word used to
define the distribution of insurance products through banks. The banks sell their own insurance
products and sometimes have tie- up with other insurance companies to sell their products through the
banks distribution channel. Banks are not in need to scratch from the beginning, they can market the
product among their customers itself. It is the most important advantage to the banks in this competitive
world. Customers preferences are changing day by day and they have the choice to obtain the
insurance products from any distribution channel. Increased competition makes it difficult for banks to
retain their customers. Providing multiple services at one place to the customers enhanced the
satisfaction level of customers.

Services are processes of activities aiming to provide solutions to customer’s problems. The essence of
services is “intangibility” although certain tangible elements may be included and it is this intangibility
that leads that leads customers to perceive services in subjective and highly abstract ways. Insurance is
an intangible service wherein the actual benefit of utility and resultant satisfaction can be assessed only
after the contingency has happened and the claim has arisen. Similarly, although banking is also
service, it has some element of tangibility in terms of ambience of the area, the comfortable location
and set-up of the bank, etc. For insurance companies, customer’s satisfaction is a function of safety,
trust, product selection and appropriate handling of paper-work by the insurer. While for the banks,
general satisfaction, trust, reliability and professionalism are the parameters of measuring customer
satisfaction. Hence combining the tangible and intangible is expected to reap higher benefits for both
and this has been envisioned with bancassurance tie-ups.

8
1.2 MEANING, DEFINITION AND CONCEPT

MEANING:
Bancassurance is combination of two words 'Banc' and 'assurance' signifying that both banking and
insurance products and service are provided by one common corporate entity or by banking company
with collaboration with any particular Insurance company. In concrete terms bancassurance, which is
also known as All finance describes package of financial services that can fulfill both banking and
insurance needs at the same time. It is the provision of insurance (assurance) products by bank. The
usage of the word picked up as banks and insurance companies merged and banks sought to provide
insurance, especially in markets that have been liberalized recently. In its simplest form, Bancassurance
is the distribution of insurance products through the Bank's distribution network.. It is phenomenon
wherein insurance products are offered through the distribution channels of the banking services along
with complete range of banking and investment products and services. Bancassurance tries to exploit
synergies between both the insurance companies and banks.

DEFINITION
: The term first appeared in France in 1980, to define the sale of insurance products through banks
distribution channels (SCOR 2003). The Life Insurance Marketing and Research Association's
(LIMRA's) insurance dictionary defines bancassurance as "the provision of Life insurance services by
banks and building societies'. Alan Leach, in his book, "European Bancassurance Problems and
prospects for 2000", describes bancassurance as "the involvement of banks, savings banks and building
societies in the manufacturing, marketing or distribution of insurance products". According to IRDA,
'bancassurance' refers to banks acting as corporate agents for insurers to distribute insurance products."
Literature on bancassurance does not differentiate if the bancassurance refers to selling of life insurance
products or non-life insurance products.Accordingly, 'bancassurance' is defined to mean banks dealing
in insurance products of both life and non-life type in any forms.But in this research the focus is
entirely concentrated towards life insurance. It is also important to clarify that the term bancassurance
does not just refer specifically to

9
distribution alone. Other features, such as legal, fiscal, cultural and/or behavioral aspects also form
anintegral part of the concept of bancassurance (SCOR 2003).
There are many definitions of bancassurance and, in essence it does depend upon the model used,
andthe stage of development. However, the definition of fully developed model that is most
commonly used is: 'Manufacturing and distributing cost effectively banking and insurance products to
common customer base".

CONCEPT:
This concept gained importance in the growing global insurance industry and its search for new
channels of distribution.However, the evolution of bancassurance as concept and its practical
implementation in various parts of the world, have thrown up number of opportunities and challenges.
Bancassurance is relatively new concept in the global stage.unlike banks and insurers which have been
around in one form or the another for centuries, bancassurance has only been around for few decades.
The concept of bancassurance was emerged in the western world when banks began to get involved in
marketing of insurance business. From purely historical perspective, many regard Barclay'sLife, set up
in 1965 in the UK as an insurance subsidiary of the eponymous bank, as the pioneer of bancassurance.
But the term bancassurance came into existence in France after 1980 to define the sale of insurance
through an intermediary bank.

10
WHAT IS BANCCURANCE?

Bancassurance refers to the agreement between a bank and an insurance company through which the
bank sells the insurance product of the concerned insurance company to its customers. This is an
arrangement through which both the bank and the tied insurance company can gain significant profits.

The insurance company has the benefits of selling its products to a wider base of customers without
having to pay broker commission which helps to increase the sales of the company by giving such
companies a larger market exposure. The bank on the other hand benefits by gaining the additional
revenue which is earned by selling the insurance product of the tied insurance company.

The primary role that the bank plays in the bancassurance arrangement is to act as an intermediary for
selling the insurance product of the insurance company and helping the company to achieve a large
customer base and improve its reach in the market.

Over the years, bancassurance has also been subject to a lot of controversies with many opponents
arguingthat such an arrangement gives too much control to the banks over
the finance sector and hence should not be entertained. With this objective, a few countries have
alsobanned bancassurance. Even so, it has not stopped the global growth of bancassurance.

11
1.3 ADVANTAGES OF BANCASSURANCE:
Everybody is winner in bancassurance. For banks it mainly acts as means of product diversification
and additional fee income; for insurance company it acts as tool for increasing their market penetration
and premium turnover and for customer it acts as bonanza in terms of reduced price, high quality
products and delivery to doorsteps. Hence it is win-win solution for everyone who involved

To the bankers
In situation of constant asset base the bank can increases Return on Assets (ROA)by increasing their
income, by selling insurance products through their own channel. It can cover operating expenses
andmake operating expenses profitable by leveraging their distribution and processing capabilities
Can leverage on face-to-face contacts and awareness about the financial conditions of customers to
sell insurance OZO products.
By acting as one stop shop for all financial services, they can improve overall customer satisfaction
resulting in higher customer retention levels Banks enjoy significant brand awareness within their
geographical region providing for lower per lead cost when advertising through print, radio and
television. The advantage of bank over traditional distributors is the lower cost per sales lead made
possible by their size able loyal customer base. Can establish sales oriented culture among the
employees

To the customers

Comprehensive financial advisory services under one roof. 1.e., insurance services along with other
financial services such as banking, mutual funds, personal loans etc. Enhanced convenience on the part
of the insured Easy access for claims, as banks is regular go. Or Innovative and better product ranges

12
 To the insurers:
Insurers can exploit the banks' wide network of branches for distribution of products. The
penetration of banks' branches into the rural areas can be utilized to sell products in those areas.
Customer database like customers' financial standing, spending habits, investment and purchase
capability can be used to customize products and sell accordingly. Since banks have already
established relationshipwith customers, conversion ratio of leads to sales is likely to be high. Further
service aspect can also be tackled easily.
NEED OF THE STUDY
Need of the Study Enduring customer relationship in banks is critical for bancassurance. The question
arises, what are the forces which drive the bank customers to cross-buy and what are the factors that
affect the intention of buying insurance in banks. The Factors like awareness, preference, satisfaction
and expectations of customers regarding bancassurance are required to be focused on policy initiatives
for customer orientation. Therefore, the need crops up to study the awareness level, their buying
behavior in terms of their preferences and satisfaction about bancassurance from the prospective
customers.
Bancassurance is one of the new channels for selling of insurance products .Banking companies tie up
with the insurance companies for cross selling of insurance products. Majority of the customers have
been purchasing the insurance products from insurance agents. This study aims at understanding
whether customers will prefer banks over insurance agents, who are offering them some commission
also and bank’s ability to work as an effective conduit for selling insurance products. A single
company cannot take up both life and non-life insurance activities in a competitive way as per law so
a tie up with banks would help them to increase their revenue

Importance of the Study

Bancassurance has a tremendous acceptance and growth across the nation. Securities business made an
automatic extension to bank 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.
This will be useful for the customers who want to get a one stop shop for all financial products. Hence
banks themselves transform to a wholesome entity. This has to be integrated with international banking
and other IT infrastructure. Insurance is the fast growing industry and has a significant contribution in
socio-economic development of the economy. Huge untapped Indian market gives an opportunity and
challenge to the insurance company. The success of any insurance business depends on the distribution
channel. The rising mar

13
1.4 Factors that appear to be critical for the success of bancassurance are

Strategies consistent with the bank's vision, knowledge of target customers' needs, defined sales
process for introducing insurance services, simple yet complete product offerings, strong service
delivery mechanism, quality administration, synchronized planning across all business lines and
subsidiaries, complete integration of insurance with other bank products and services Another point is
the handling of customers. With customer awareness levels increasing, they are demanding greater OZO
convenience in financial services.
The emergence of remote distribution channels, such as PC banking and Internet-banking, would
hamper the distribution of insurance products through banks. The emergence of newer distribution
channels seeking market share in the network. Bancassurance training for bank employees: The bank
employees will need to be trained in the following aspects of the insurance business: Features of the
insurance products sold How to identify and approach potential customer Basic insurance needs
Handling basic objections Other distribution channels and products Expected roles Procedures
Remuneration and incentive schemes Cultures Customer service Continuous training and supervision:
Apart from initial training, there should be further training to support the development of the agent or
employee. Some ways in which this can be done are: Agency meetings Bank branch meetings Area
banking meetings In-house magazine Training circulars Area sales seminars Company library Video
tapes Certified courses Lectures Training material booklets Remuneration of bank employees: Any
commission payable by the insurance company is, as principle, to be credited to the bank profit center
for the bancassurance operation. The bank management sets the commission level for each manager
and employee engaged in the bancassurance operation. Selling in the bank branches (by employees or
by financial advisers): For simple packaged products: employees could be rewarded with gifts and/or
salary increments based on their selling performance in promoting both banking and insurance
products. Such performance could be quantified via the use of points system where by the various
products are allocated as number of points. do Warm leads: In return for providing warm leads, the
bank will get share, say 50%, of the normal first year commissions. basis is needed for allocating this
amount between branch staff (who provide the warm leads) and the bank owners. possible basis would
be: 25% 25% 50%. The structure shown above generates benefits as follows: so Financial rewards for
employees who generate warm leads we Financial rewards for managers and other staff of the bank

14
branch who have supported bank activities while the assurance business was being generated.
Group awards or bonuses are more desirable when the contribution of the individual employee is
eitherdifficult to distinguish or depends on group cooperation.

. 5. Assurance: It is a state of customer feeling free from danger, risk, or doubts including physical
safety, financial security, and confidentiality. It involves the factors such as trustworthiness, belief, and
honesty (Parasuraman et al., 1990). Under this dimension, the variables considered in this study are:
sympathetic approach of bank’s staff, politeness of the sales personnel of bank, knowledge level of the
sales personnel of bank, customers feel free to talk about insurance related problems with the sales
personnel of bank, and bank personnel giving customers financial advice other than insurance.

15
1.5 RELEVANCE OF BANCASSURANCE IN THE INDIAN FINANCIAL SECTOR

Integration of the financial service industry in terms of banking, securities business and insurance is
growing worldwide phenomenon. The Universal Banking concept is evolving on these lines in India.
11) Banks are the key pillars of India's financial system. Public have immense faith in banks. 111)
Share of bank deposits in the total financial assets of households has been steadily rising. iv) Indian
Banks have immense reach to households.
Total of 65700 branches of commercial banks, each branch serving an average of 15,000 people. v)
Banks enjoy considerable goodwill and access in the rural regions.There are 32600 branches in rural
India (about 50% of total), and 14400 semi-urban branches, where insurance growth has been most
buoyant.196 exclusive Regional Rural Banks in deep hinterland.
Banks have enormous retail customer base.Share of 'individuals' as category in bank accounts is
steadily increasing.Rural and semi urban bank accounts constitute close to 60%in terms of number of
account ,indicating the number of potential lives that could be covered by insurance with the upfront
involvement of banks. vil) 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 that Banks can retain customer loyalty by offering them vastly expanded and more
sophisticated range of products. Insurance distribution can also help the bank to increase the fee-based
earnings to large extent. vill) Fee-based selling helps to enhance the levels of staff productivity in
banks. This is vitally important to bring higher motivation levels in banks in India. ix) Banks can put
their energies into the small-commission customers' that insurance agents would tend to avoid. Banks'
entry in distribution can help to enlarge the insurance customer base rapidly. This helps to popularize
insurance as an important financial protection product. x) Bancassurance helps to lower the distribution
costs of insurers. Acquisition cost of insurance customer through bank is low. Selling insurance to
existing mass market banking customers is far less expensive than selling to group of unknown
customers .
Experience in Europe has shown that bancassurance firms have lower expense ratio. This benefit
could go to the insured public by way of lower premiums. xi) Banks have an important role to play in
the pension sector when deregulated.Low cost of collecting pension contributions is the key element in
the success of developing the pension sector.Money transfer costs in Indian banking is low by
international standards.Portability of pension accounts 1s vital requirement which banks can fulfill, in
credible framework.

16
 REASONS FOR BANKS TO ENTER INTO BANCASSURANCE

The main reasons why banks have decided to enter the insurance industry area are the following: Intense
competition between banks, against background of shrinking interest margins, has led to an increase in the
administrative and marketing costs and limited the profit margins of the traditional banking products. New
products could substantially enhance the profitability and increase productivity. Financial benefits to bank
performance can flow in number of ways, as briefly outlined below: Increased income generated, in the
form of commissions and/or profits from the business (depending upon the relationship) 10
INTRODUCTION Reduction of the effect of the bank fixed costs, as they are now also spread over the life
insurance relationship. Opportunity to increase the productivity of staff as they now have the chance to
offer wider range of services to clients Customer preferences regarding investments are changing. For
medium-term and long-term investments there is trend away from deposits and toward insurance products
and mutual funds where the return is usually higher than the return on traditional deposit accounts.This
shift in investment preferences has led to reduction in the share of personal savings held as deposits,
traditionally the core element of profitability for bank which manages clients money. Banks have sought to
offset some of the losses by entering life insurance business.Life insurance is also frequently supported by
favorable tax treatment to encourage private provision for protection or retirement planning. This
preferential treatment makes insurance products more attractive to customers and banks see an opportunity
for profitable sales of such products. Analysis of available information on the customer financial and social
situation can be of great help in discovering customer needs and promoting or IL manufacturing new
products or services.Banks believe that the quality of their client information gives them an advantage in
distributing products profitably, compared with other distributors (e.g. insurance companies). The
realization that joint bank and insurance products can be better for the customer as they provide more
complete solutions than traditional standalone banking or insurance products. Banks are experiencing the
increased mobility of their customers, who to great extent tend to have accounts with more than one bank.
Therefore there is strong need for customer loyalty to an organization to be enhanced. Client relationship
management has become key strategy. To build and maintain client relationship ,banks and insurers are
forming partnerships to provide their clients with wide range of bank and insurance products from one
source. It is believed that’s the number of products that customer purchases from an organization increases
the chance of losing that specific customer to competitor decreases

17
.
INTRODUCTION WHY IS BANCASSURANCE MORE SUITED TO LIFE INSURANCE
PRODUCTS?

Traditionally, much fewer non-life insurance products are distributed through bancassurance than life
insurance products. There are several reasons for this: The main reason may be the complementary
nature of life insurance and banking products: bank employees are already familiar with financial
products and quickly adapt to selling insurance-based savings or pension products; On the other hand,
the non-life market requires special management and selling skills, which are not necessarily prevalent
in bancassurance. In addition, such competencies require significant investment in training and
motivation, and therefore additional costs; Life insurance products are generally long- term products,
which require customers to have complete confidence in the institution that invests their money. And
we now know that, in many countries, banks have better image and are more trusted than insurance
companies; Bank advisers can use their knowledge of their customers' finances to target their advice
towards specific needs. This is major advantage in life insurance and less important in personal injury
insurance; Some professionals also refer to the claims management aspect of personal injury
insurance, which could have negative impact on 13 brand image. This would seem to explain why for
long time bancassurance operators hesitated to offer these types of product

18
Current scenario:
As far as the present scenario is concerned the banking industry is in transition phase. ThePublic
Sector Banks, which are the mainstay of the Indian Banking system account, are unfortunately
burdened with excessive Non Performing assets massive manpower and lack of modern
technology.while on the other hand the private sector banks are consolidating themselves through
mergers and acquisitions
. On the other hand the Private Sector Banks in India are witnessing immense progress They have
pioneered Internet banking, mobile banking, phone banking, ATMs. etc., They are forging ahead and
rewriting the traditional banking business model by way of their sheer innovation and service. The
banks today are more market driven and market responsive. The top concern in the mind of every
bank's CEO is increasing or at least maintaining the market share in every line of business against the
backdrop of heightened competition. With the entry of new players and multiple channels, customers
have become more discerning and less "loyal" to banks.
This makes it imperative that banks provide best possible products and services to ensure customer
satisfaction. To address the challenge of retention of customers, there have been active efforts in the
banking circles to switch over to customer centric business model. The success of such model
dependsupon the approach adopted by banks with respect to customer data management and customer
relationship management.
There has been an increase in the bank focus on retail segment with the economic slow down. Retail
banking has become the new mantra for banking industry. Banks are now realizing that one of their
best assets for building profitable customer relationships especially in developing country like India is
the branch. Branches are in fact key channel for customer retention and profit growth in rural and
semi-urban set up.. Branches could also be used to inform and educate customers about other, more
efficient channels, to advise on and sell new financial instruments like consumer loans, insurance
products, mutual fund products, etc. Thus, all the above led to the practice of bancassurance. The
Reserve Bank of India being the regulatory authority of the banking system, with the reorganization of
the need for banks to diversify their activities at the right time, permitted them to enter into insurance
sector as well. It has issued set of detailed guidelines setting out various ways for bank in India to
enter into insurance sector. IRDA has also felt the necessity of introducing an additional channel of
distribution, which is the Bancassurance to reach out more people. It started picking up after
Insurance Regulatory and DevelopmentAuthority (IRDA) passed notification in October 2002 on
'Corporate Agency' regulations.

19
1.6 Legal Requirements:
In India, the banking and insurance sectors are regulated by two different entities (banking by RBI
and insurance by IRDA) and bancassurance being the combinations of two sectors comes under the
purview of both the regulators. Each of the regulators has given out detailed guidelines for banks
getting into insurance sector. Highlights of the guidelines are reproduced below:

RBI guideline for banks entering into insurance sector provides three options for banks. They
are:
 Joint ventures will be allowed for financially strong banks wishing to undertake insurance
business with risk participation;
 For banks which are not eligible for this joint-venture option, an investment option of up to
10% of the net worth of the bank or Rs.50 crores, whichever is lower, is available; Finally,
any commercial bank will be allowed to undertake insurance business as agent of insurance
companies.
 This will be on fee basis with no-risk participation.

The Insurance Regulatory and Development Authority (IRDA) guidelines for the bancassurance
are:
 Each bank that sells insurance must have chief insurance executive to handle all
the insurance activities.
 All the people involved in selling should under-go mandatory training at an
instituteaccredited by IRDA and pass the examination conducted by the authority.
 Commercial banks, including cooperative banks and regional rural banks, maybe come
corporate agents for one insurance company. Banks cannot become insurance brokers.
 Currently there has been an increase in the number of tie-ups with banks and insurance
companies. Some of the models practiced by the banks in India are

20
 CHAPTER-2
Research Methodology
Bancassurance has evolved as a strong distribution channel in India. Bancassurance means that the
insurance company and the bank come together to offer insurance products from the counter of the
banks to the bank’s customer. The present study attempts to analyze customers’ perception regarding
assurance of bancassurance channel in providing insurance-related services. The study also tries to
find out the impact of various demographic variables on customers’ perception regarding assurance of
bancassurance channel. The study finds that customers consider bancassurance channel having high
assurance in providing insurance services. It is also found in the study that there is no significant
association between the demographic variables considered in the study and customers’ perception
regarding assurance of bancassurance channel.

2.1 OBJECTIVES OF THE STUDY

. To study the customer perception and to examine the factors affecting buying of insurance policy from
banks

. To measure awareness of customers on Bancassurance.

2.2 SCOPE THE OF THE STUDY

The present study has been made to examine the extent of customer awareness and
factors affecting buying of insurance policy on Bancassurance

2.3 LIMITATIONS OF STUDY

Bancassurance India, with a democratic government and a population of more than one billion has a
savings rate of around 23 percent, of which deposits with the bank constitute

21
more than 40 percent, insurance fund constitute 14.9 percent and provident / pension fund accounts for
13 percent of the financial savings as recorded for the financial year 2004- 2005. This shows trend
away from deposits and towards insurance products and mutual funds where the return is usually
higher than the return on traditional deposit accounts. This shift in investment has led to reduction in
the share of personal savings held as deposits.
With the shift in customer preferences from deposits to investments, intense competition etc, the
bank‟s profit margin has started to decline. There is an urgent need for the banking industry to find
alternative ways to generate income and to retain the customers by providing value added services
under one roof and to stream line the savings into Insurance ,where in Bancassurance is the best
channel. By successfully mining their customer data bases, leveraging their reputation and distribution
systems (branch, phone and mail) to make appointments and utilizing their sales techniques, banks can
make Bancassurance a profitable service.

2.4 TYPES OF RESEARCH:

The research is primarily both exploratory as well as descriptive in nature. The sources of information
areboth Primary & Secondary.
A well-structured questionnaire was prepared to collect the perception of the respondents ,through
thisquestionnaire.

2.5 RESEARCH METHOD:

Research can be defined as systematized effort to gain new knowledge. A research is carried out
bydifferent methodology, which has their own pros and cons.
Research methodology is a way to solve research problem along with the logic behind them. Thus
when we talk of the research methodology we not only take of research method but also context of
ourresearch study and explain why we are using a particular method or techniques and why we are not
using other so that research result are capable of being evaluated either by the researchers himself or
by others.

2.6 Types Of Data collection

The data is collected from the following sources:- 1. Primary Data:-
Primary data is the first hand data which is collected from the number of respondents. Here
structured questionnaire was used to collect primary data through surveys.

22
Secondary Data:-
Secondary data has been collected for other for other useful resources & information essential required
in order to successfully complete the project report & company figures from the internet, books,
magazines as well as news paper

2.7.Sample Method :

1. Random sampling is used for research project.

2. Data representation technique and tools
Columns charts & pie charts has used for the Representation.

2.8 Data collection method

1. Survey method
2. Survey instrument
3. Method of survey- Through the personal interaction with the help of questioner

23
 Chapter-3 Literature
Review
[Raj Kumari (2007) found that that awareness about insurance was remarkably growing among the people but
many of them were not insured because of several reasons. People purchased insurance policies for income
tax benefits and savings and they did not have any idea about Centurion bank providing insurance facility.
Ray and Ali (2008) found that people preferred life insurance as an attractive investment option because it
provided the benefits of tax savings, coverage of risks against accident or death, post retirement requirements
and alike. The customers expected that insurance service provider should give statement, payment of premium,
innovative products and switching of funds. Besides, the customers preferred e-mail, phone call and SMS in
urban areas. Ashok Kumar Sahoo (2017) Bancassurance business of private sector bank is at the infant stage, as
it is not producing much revenue for the banks. The performance of bancassurance income in South India
private banks also not satisfactory. There is a need of changes in private sector banks to frame such policies and
products which could increase their bancassurance income. Such programmers need to be organized in a
systematic manner, which would make the customer aware about the bancassurance products of the banks.

3Rebeena Alavudeen and Dr. Sr. Rosa K.D(2015) The insurance industry in India has been progressing at a
rapid speed since the inception of this sector. There is a bright future for bancassurance in the Indian insurance
market. Growth rate of insurance income is remarkable in some of the banks so there is very good scope for
further development in the selling of bancassurance products by the banks in the long run.

[ 4 ] A. Muthumari, Dr.K. Pushpaveni (2017) Banks have to upgrade and constantly think of new innovative
customized packages and services to remain competitive. The study finds that the bank customers are satisfied
with the loyalty services provided by the bank to their customer. It means that customers expect the bank to
rectify the problem and to update the banking services in bancassurance products. For improving customer
service loyalty services, the customers are satisfied with the bank in future.

23
The concept of Bancassurance was originated in France and first Bancassurance started in operation way back
in 1970s. It is a phenomenon where insurance products are offered through the distribution channels of the
banking services along with a complete range of banking investment products and services. Bancassurance,
i.e., Bank + Assurance, refers to banks selling the insurance products. Both banking and insurance product and
services are provided by one corporate entity or by banking company with collaboration of any particular
company. Bancassurance also known as all finance describes a package of financial services that can fulfill
both banking and insurance needs at the same time.

The term first appeared in France in 1980, to define the sale of insurance products through banks distribution
channels (SCOR 2003)1 Graham Morris (2001)2 opined that though Bancassurance in the Indian environment
is at a very early stage of development, it is new and untried, and the potential is undoubtedly there. Though
there may be some initial stumbling blocks, for example, clarity of legislation but the critical factor will be the
selection of the right model and practical approach.

Success will be likely to come more easily through the strategic alliances and cross share holdings. Use of
right technology and awareness and education of the banking industry are other critical success factors for the
insurance industry. While providing bancassurance model for India it is suggested to start with simple product
(accident/health) through direct marketing.

This will help update customer information, segment the customer database for more effective marketing and
achieve p2ro4fits with low investment/risk. Total commitment at top
level of life insurer and bank is also important for the success of Bancassurance along with the fact that bank
appreciates and acts on the „Difficult‟ selling process of life insurance products (Allen J pathmarajah 2003)3

24
There is no one magic formula to Bancassurance. The model chosen has to be consistent to the overriding
strategies and objectives for this particular business. Execution excellence is the key to success and together
partners must extremely work hard at understanding each other, while developing common objectives and
being truly committed to achieving a mutually desired and acceptable out come (Mc. Dermott and Saunders
2003)
4 . The concept of Bancassurance appears to be gaining ground quite rapidly both through commission based
arrangements and joint ventures between banks and insurance companies. However it is cautioned that tying
up with a bank might prove counter productive to the objective of brand equity for the insurance firms (Barua
2004)
5 . Bancassurance requires having appropriate awareness among bank employees and ensuring that they
understand its mechanism. This involves a change of mindset and developing appropriate system at the bank
level. India had very little experience in this field and there were no role models. Some companies have global
experience in this field such as AVIVA insurance which did not face any problem. However there is a need to
build congruence of interest between insurance selling and retail banking unit. (Bhat and Dixit 2005)
6 . In the Indian context it has been found that, “business per employee” is negatively correlated with
bancassurance variable at a significant level of 5 percent, hence for banks when the business is low, it is likely
to be attracted to improve productivity by adding bancassurance in their portfolios. Asset performance was
also negatively correlated with the non performing assets. However, the association was weaker (only
significant at 10 percent). For insurance companies, non-performing assets of a bank will act as brake on the
bank or insurance company tie-up for insurance distribution (Tapen sinha 2005).

Bancassurance is selling insurance products by banks through their distribution channels. It has become one of
the major Para banking activities of the banks. If marketing of insurance products by banks is done efficiently
and ethically, than it insures a win-win situation for all parties concerned, the bank, the insurance company as
well as the customer. There is a large potential and future development of bancassurance in India and many
insurers finding it as a attractive and profitable form of distribution channel for distribution of their products
(Anuja Banerjee 2009)
8 . The cultural difference between banks and insurance companies could pose a major challenge to the growth
of bancassurance. Large customer database and people trust on bank is the main opportunity for banks as a
distribution channel for insurance companies. (Kumar 2006)
9 . 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 future growth of this sector will depend on how effectively the insurance firms are meeting the
expectations of their customers and able to change the perceptions of the Indian consumers and make them
become aware of insurable risks. (Krishnamurthy S 2005)
10 . The intermediaries play an important role in the success of insurance business. Selling of life insurance
products largely depends on the skill and efficiency of the distributor. The role of agent is very vital as
compared to other forms of market channels like brokers, corporate agent’s bancassurance, etc. Bancassurance
is emerging as a new form of distribution channel where banks performed role of intermediary and sell policy
directly to the customers (Jay Narayanan 2008)
25
3.1 Attributes Considered for Measuring Customers’ Perception of Bancassurance

For measuring customers’ perception of bancassurance, the present study has considered
the following six attributes.
1. Compliance: Compliance is a state in which someone or something
is in accordance with established guidelines, specifications, or legislation. In insurance industry, the
term “compliance” means that organizations involved in insurance service and the employees and
marketing staff of the organization shall carry out insurance operation and management behaviors
subject to the related laws and regulations, provisions of insurance regulatory organizations, self-
discipline rules of the industry, their internal management system, and the ethical code of honesty and
good faith (China Insurance Regulatory Commission, 2007). In this present study, the statements
considered under compliance dimension are explaining the product benefit as per the norms set by the
Insurance Regulatory and Development Authority of India (IRDA) and providing insurance services as
per the norms set by IRDA.
2. Tangible Infrastructure: It denotes bank’s physical facilities,
equipment, and appearance of bank personnel (Parasuraman, Zeithml, & Berry, 1990). In this study,
the variables considered under this dimension are up-to-date equipment available in bank, availability
of adequate furniture in bank, visually appealing physical facilities of bank, well-dressed sales
personnel of bank, Internet facility of bank (Rajasekar & Kumari, 2014),and convenient location of
bank’s branch (Siddiqui & Sharma, 2010).
3. Reliability: It means the ability of the bank to perform the promised
service dependably and accurately (Parasuraman et al., 1990). Choudhary and Singh (2015b) and
Rajasekar and Kumari, (2014) considered the following variables to measure reliability of
bancassurance channel: keeping accurate records of insurance related transaction, providing services
by bank employees at the time they promise to do so, security of transaction in bank, the information
provided by the bancassurance channel is accurate, trustworthiness of bank, consistency in behavior of
bank’s staff, consistency in performance of bank’s staff, disclosing customer’s financial information to
others, and bank disclosing customer’s personal information to others.
4. Responsiveness: It denotes willingness of bank’s employees to
help customers and provide prompt service to the customers (Parasuraman et al., 1990). The variables
considered under responsiveness dimension are providing prompt service to the customer by the
bank’s employees, providing the service that is exactly required by the customer, willingness of
bank’s staff to help the customer, replying any query of the customer related to insurance, and
providing insurance related service on favorable terms

26
. 5. Assurance: It is a state of customer feeling free from danger, risk, or doubts including physical
safety, financial security, and confidentiality. It involves the factors such as trustworthiness, belief,
and honesty (Parasuraman et al., 1990). Under this dimension, the variables considered in this study
are: sympathetic approach of bank’s staff, politeness of the sales personnel of bank, knowledge level
of the sales personnel of bank, customers feel free to talk about insurance related problems with the
sales personnel of bank, and bank personnel giving customers financial advice other than insurance

27
3.2 Consumers’ Preferences

Through this study we have inferred that price is a decisive factor for young customers of insurance
services. Moreover, customers form their preferences based on their income and life situation. The
respondents in this study hence form their preferences based on their situation of being students who
live off low wages, loans and scholarships. This could be areas on that some of them responded well
tooffers that were specific for students. We also concluded that there exists unawareness among young
people about the services provided by insurance companies, as well as skepticism regarding their
contracts and intentions.
Additionally, some respondents were afraid of being fooled or tricked by telemarketers representing
insurance companies. It seems that this mistrust is a combination of the skepticism towards the
intentions of insurance companies as well as a general distrust for telemarketers. It is evident from
the study that this group of people desire more detailed information in order to construct their
preferences. While the internet is preferred as a primary source for information, insurances are
perceived as complex and their intangible nature make customers want the opportunity to make
personal contact as well. Finally, the young customers interviewed in our study would like to have
more flexibility and the possibility to freely combine different services according to their situational
needs, for a good price. However, most respondents showed a tendency to change their preferences
over their life-time, as their life circumstances would change.

28
3.3 SWOT Analysis Of Bancassurance In India
3.4 SWOT ANALYSIS

The word „SWOT‟ stands for Strength, Weakness, Opportunity and Threats. Let us analyze bancassurance in
India from the „SWOT‟ viewpoint :
Strength

1. Vast Market

India with more than 1.21 billion population provides a vast untapped market for insurance products as 80% of
Indian population is still without life insurance cover. The insurance sector has still huge potential market in
rural and semi-urban areas of the country. Banks with huge network of branches in urban and rural areas and
with access to large number of customers are in a much better position to sell insurance products.
2. Skilled Professional

: Banks are now better equipped with highly skilled professionals who can have better understanding of
complexities of insurance products and can carry out insurance selling activity successfully
. 3. Other

: It is a well tested concept in the European countries and is the Most suitable way of selling investment based
insurance products.

Weakness

1. Lack of net-working: Though gradually banks are adopting core-banking services (CBS), yet there are still
a large number of banks which lack net-working among their branches which area must to sustain the
bancassurance

2. Low Income

Though there is a vast population in our country yet the majority of the population he a very low income. As
per an estimate “ 37.2% of the population ( about 410 million people) remains poor, making India home to one
third of the world’s poor people”(.This low income makes them unable to spend extra money on the purchase
of insurance products

29
. 3. Other : Inability of banks to access the interior remote areas of villages or hilly areas, lack of sales culture
in banks, etc.

Opportunities
1. Corporate Clients: As already mentioned, banks have access to a large
number of customers – retail as well as corporate. This gives an opportunity to banks to utilize its relation
with customers for the purpose of marketing the insurance products. It is a common observation that Bank
customers‟ trust on banks is more than on insurance companies.

2. Data-Base: As compared to insurance companies, banks have huge

data base regarding the financial position, investment capacity, spending habits, etc. of their customers.
This can be properly analyzed and leveraged to sell the insurance products.
3. Branch Net-work and Infrastructure: Banks have vast infrastructure and
a huge net work of branches and have large customer base. There are about 86500 branches of banks(83) and
approximately each branch caters to around 15000 customers. This gives a great opportunity to insurers to
reach out through banks a large number of individuals who need insurance products to fulfill their insurance
requirements.
4. Personalized Services: Banks not only have access to a large number of
customers but they have also direct ( or face to face ) contacts with their customers. This enables them to
provide personalized services to their customers. In addition to meeting their day to day banking requirements,
banks can provide them personal assistance regarding payment of insurance premium, transferring policies,
settling their claims, etc.

5. Penetration Into rural Areas: Banks‟ huge network of branches in rural

areas makes easier the penetration of bancassurance into rural areas also and that too at less cost. Banks
with direct contacts with their customers are in a better position to understand the specific needs of rural
customers. This helps banks to customize the insurance products and sell them accordingly.

6. Fee-based Income: Bancassurance provides banks an opportunity to

raise their fee- based risk-fee income.
7. Financial Requirements: Banks have face to face contacts with their
customers .Hence they try to solve all types of financial problems (relating to banking and insurance) of their
customers. Thus customers get an opportunity to avail both types of services – banking and insurance – under
one roof.

30
Threats
1 . Professionals’ Reluctance: The success of bancassurance in our country depends mainly on co-operative
attitude of bank employees. Though banks have a large pool of professionals yet they show less interest in
selling the insurance products. They are also reluctant to train themselves for this additional work.
3. Customers’ reluctance:

The success of bancassurance venture requires awareness about insurance among the people in general and bank
customers in particular. But bank customers are generally reluctant in purchasing insurance products and that too
from banks. This poses yet another challenge for the success of bancassurance in our country.

3 Other

: Period of life-insurance contract is usually very long, banks generally lack marketing skill for insurance products,
bancassurance models prevalent in India are in experimental stage, etc.

3.1 DATA AND METHODOLOGY

In India, banks could play a major role in the insurance market. As banks have a huge network across
the country. Therefore it is easy for the banks to gain an extra income with the same effort or more by
offering a fee-based income for the employees for insurance sales. For example, if a bank gives out a
home loan, it might insist on a life insurance cover so that in case of death of the borrower, there is no
problem in paying off the home loan. Similarly, for educational loan also it is necessary to cover
insurance.

31
 CHAPTER 4
4.1 DATA ANALYSIS AND INTERPRETATION

Sr no Gender NO.of respondent

1 MALE 63.6%

2 FEMALE 36.4%

Interpretation : According to the survey conducted, it was found that the majority of the people answering the questionnaire
are male.
64% of the people that answered the questions were of male, where as the second highest percent of gender was found to be of
female with 36%.

32
 Sr no AGE NO.of respondent

1 15-20 37%

2 20-25 57.4%

3 30-35 5.6%

Interpretation: According to the survey conducted, it was found that the majority of the people answering the questionnaire
were of 20-25 years of age.
57% of the people that answered the questions were of 20-25 years of age where as the second highest percent of age was
found to be of 15-20 years of age with 37%
The third highest share of percentage was 6% which was of people who are of 30-35 years of age.

33
 Sr no OCCUPATION NO.of respondent

1 STUDENT 45.5%

2 PRIVATE SECTOR 41.8%

3 GOVERNMENT JOB 12.7%

Interpretation: From the above graph it can be interpreted that the majority of the respondents 45%
would referred to Student and 42% would referred to private sector and 13% would referred to
government job.

34
 Sr no INCOME NO.of respondent

1 100000-200000 42.3%

2 200000-300000 32.7%

3 300000-500000 25%

Interpretation: From the above graph it can be interpreted that the majority of the respondents 42%
would referred to Income of 100000-200000 and 32% would referred to income of 200000-300000 and 25% would referred to
income of 300000-500000.

35
 Sr no COLOUR NO.of respondent

1 RED 9.1%

2 BLUE 90.9%

Interpretation: As per the survey, when people were asked “Do you think that insurance is necessary
for any individual?” out of the 55 people who responded 91% of the people chose the option “Yes”
indicating that they agree that insurance is necessary for individual.
9% of the people chose the option “No” as they felt that insurance is not necessary for any individual.

36
 Sr no COLOUR NO.of respondent

1 RED 5.5%

2 BLUE 90.9%

3 Orange 3.6%

Interpretation:
From the above graph it can be interpreted that the majority of the respondents 91%
would preferred the life insurance and 4%% would not preferred the property insurance and 5% would
maybe Preferred the fire insurance.

37
 Sr no COLOUR NO.of respondent

1 RED 9.1%

2 BLUE 70.9%

3 ORANGE 20

Interpretation:this survey data suggests that a majority of respondents, 71%, are aware that insurance serves the
dual purpose of covering risks and acting as a means of investment.The 9% who answered "No" might lack
awareness of the investment aspect of insurance, perceiving it solely as a mechanism for risk coverage. The 20%
who responded "Maybe" could reflect uncertainty or ambiguity about the concept.

39
 Sr no COLOUR NO.of respondent

1 RED 20

2 BLUE 80

Interpretation: this survey data indicates that a significant majority of respondents, 80%, are aware that many
private life insurance companies offer life insurance coverage in addition to the Life Insurance Corporation of
India (LIC).The 20% who answered "No" may lack awareness of the presence of private life insurance companies
or may perceive LIC as the sole provider of life insurance coverage in India.

40
 Sr no COLOUR NO.of respondent

1 RED 22.2%

2 BLUE 70.4%

3 ORANGE 7.4%

Interpretation: this survey data suggests that a majority of respondents, 70%, prefer to invest their savings in
deposits.
The 22% who indicated investing in insurance likely recognize the importance of financial protection and risk
management.
The 7% who mentioned investing in goods may opt for tangible assets such as gold, real estate, or commodities.

41
 Sr no COLOUR NO.of respondent

1 RED 14.5%

2 BLUE 85.5%

Interpretation: The interpretation of this survey data indicates that a significant majority of respondents, 86%,
feel that the premiums paid in private life insurance companies are safe.
The 14% who answered "No" may have concerns about the safety of their premiums with private insurers.

42
43
 Sr no COLOUR NO.of respondent

1 RED 5.5%

2 BLUE 85.5%

3 ORANGE 9.1%

Interpretation: The interpretation of this survey data suggests that a vast majority of respondents, 85%, prefer
life insurance.
The 5% who indicated a preference for fire insurance may prioritize protecting their property or assets against
the risk of fire damage.
The 9% who mentioned property insurance may have broader concerns about protecting their physical assets,
including their home, belongings, or real estate investments, against various risks such as theft, vandalism, natural
disasters, or accidents.

44
 Sr no COLOUR NO.of respondent

1 RED 14.5%

2 BLUE 61.8%

3 ORANGE 23.6%

Interpretation:The interpretation of this survey data suggests that a majority of respondents, 62%, believe that
banks offer the same insurance products.
The 14% who answered "No" may be aware of differences in the insurance products offered by banks compared
to traditional insurance companies.
The 24% who responded "Maybe" might indicate uncertainty or ambiguity about the extent to which banks offer
insurance products.

45
 Sr no COLOUR NO.of respondent

1 RED 7.3%

2 BLUE 92.7%

Interpretation: The interpretation of this survey data indicates that a vast majority of respondents, 93%, believe
that bank employees provide all the information needed.
The 7% who answered "No" may have reservations or concerns about the completeness or accuracy of the
information provided by bank employees.

46
 CHAPTER 6
Conclusion

CONCLUSION
Insurance in India used to be firmly managed and hoarded by state-run insurance providers.
Taking after the move towards financial change in the mid-1990s, different arrangements to
redo the insurance picture at long last brought about the section of IRDA Act in 1999.
Altogether, the insurance business was opened on two fronts.
Initially, non-public organizations were allowed to enter both life and non-life business. Besides,
remote organizations were permitted to take an interest, but with a top on shareholding at twenty
six percent. With the presentation of the 1999 IRDA Act, the sector joined an arrangement of
other monetary parts on the growth and development walk. India is the most encouraging
developing insurance in the world. During the period 2015-16, premium volume was 1.38trillion
rupees (USD20.54billion), showing a development rate of 22.5percent.The general protection
industry recorded a twelve percent growth in Gross Direct Premium endorsed in 2016 at
105.25billion rupees (USD1.55billion). Specifically, life business, which as of now makes up
eighty percent of premiums, is broadly tipped to lead the development. The significant drivers
incorporate sound monetary basics, a rising center pay class, and enhancing the administrative
system and rising danger mindfulness. The basis for acknowledging potential was seemingly laid
in the year 2000 when India attempted to open the public insurance trade to the private area and
remote organizations. The insurance sector of India comprises of fifty three insurance agencies of
which twenty four are in life insurance sector and twenty nine are non-life. Altogether, remote
players took an interest in a large portion of these new organizations – regardless of the
limitation twenty six percent on foreign ownership. State owned insurance agencies have so far
figured out how to stand their ground and hold overwhelming business sector positions. However,
their piece of the pie is probably going to decrease in the close to medium term. Critical studies
have 298 in this manner been now taken; however, there are as yet real obstacles to overcome if
the market is to understand its maximum capacity. In the first place, India needs to additionally
change venture directions on guarantors to strike a legitimate harmony between protection
dissolubility and speculation adaptability. Besides, both the public and private sectors would
profit by less intrusive directions. Indian Insurance industry is not exempted and undergoing
innovative improvement. The industry is facing tough competition where finding a new customer
is difficult and retaining the existing one is costlier.
Bringing and keeping the non-policy holders under the umbrella of insurance requires a deliberate
loom. Also the problem of slow growth, rising cost, failing distribution

47
structure are faced by insurance companies. Life insurance companies are at boom whereas
non-life is still facing the problem of heavy claims, guarantying losses, inefficiencies in
administration etc. However, the picture is not always dark. The insurers have undergone
several developments in the past and are approaching towards new strategies for selling their
products. New products, new distribution channels, and new marketing strategies are formed to
compete in the market.
Professional customer service and proper advice on policy is the key differentiator in the current
competitive situation. The factors that influence the insurers to improve their distribution
channels are changing consumer behavior, no change in regulations, focusing profitable growth,
tapping the untapped customers etc. Many companies are having good products but they lack in
sales. So they will have to take into consideration in modernizing their distribution channel and
become more relevant for their customers’. Doing this will not only give short-term results but
long-term growth, profitability and financial stability for the economy. The actual perception of
the customers is that traditional channels never lag behind compare to modern channels for
buying insurance products. Still, Modern channels have the great impact on customers buying
behavior. But future depends on how well these new channels are able to overcome challenges
thrown on them. 299 It can be concluded that more and more insurers are adopting multichannel
strategy as they continue to balance the needs of customers from different groups against the cost
of selling products and providing better services. When it comes to insurance distribution one
size does not fit at all. Ideal Distribution, set out above, is the only route to success for the
Insurance sector

SUGGESTIONS
 Customers prefer to purchase insurance products from banks due to existing personal
relationship with banks. The banks that offer bancassurance must also think of new
media channels to reach the customers
.  Banks should do the settlement of claims which will increase the trust and reliability of the
customers on the banks.
 Need to spread much more awareness among the customers about bancassurance and
its benefits.
 Attractive incentives and proper motivation should be given to the marketing personnel of
the bank in order to sell insurance products in a bigger way.
 Insurance companies must come up with more customized products for bancassurance.
 To offer best product to the customers in a low cost effective way.
 Better trained bank employees as well as the informative marketing material can give boost
to business

48
CHAPTER 7

BIBLIOGRAPHY

Bancasurrance.wiki/google.com/list of public-and private.com

Barua, Abheek, (2004), Bancassurance – New Concept Catching Up Fast In India. The Chartered

Accountant, 1348 – 1351 .

World Economic Forum. (2015). The future of financial services: How disruptive innovations are
reshaping the way financial services are structured, provisioned and consumed. Retrieved on 11th
September, 2015 from
http://www3.weforum.org/docs/WEF_The_future of_ financial_services

Wang, C. W., & Hwang, J. T. (2009). A study of life insurance market in China. Retrieved on11th March,
2013 from

http://nccur.lib.nccu.edu.tw/retrieve/81704/501401.pdf

Customer satisfaction analysis of information and communication technology channels in banking sector.
Asia-Pacific Journal of Management Research and Innovation,

Price water house Coopers. (2014). State of compliance 2014: Insurance industry brief. Retrieved on
9th May 2016 from
http://www.pwc.com/us/en/risk-management/ state-of-compliance-survey/assets/pwc-soc-insur

49
 CHAPTER 4

QUESTIONNAIRE

1. what is your age?

 15-20
 20-30
 30-35
what is your gender?
 MALE
 FEMALE
Occupation

 PRIVATE SECTOR
 STUDENTS
 GOVERNMENT JOBS
Income

 100000-200000
 200000-300000
 300000-500000

Do you think that insurance is necessary for any individual?

 YES
 NO

which type of insurance do you prefer to take?

 LIFE INSURANCE
 FIRE INSURANCE
 PROPERTY INSURANCE

Do you know that insurance aims at covering risk and also means of investment?

 YES
 NO
 MAYBE

50
Are you aware that many private life insurance companies are providing life insurance coverage to the
people apart from LIC of India?

 YES
 NO

Where do you invest your saving?

 DEPOSIT
 INSURANCE
 GOODS

Do you feel that the premiums paid in private life insurance companies are safe?

 YES
 NO

what type of insurance do you prefer?

 LIFE INSURANCE
 FIRE INSURANCE
 PROPERTY INSURANCE

Do you think that bank offers same insurance products?

 YES
 NO
 MAYBE

Do you think that bank employees give all the information needed?

 YES
 NO

51