are several channels available for distribution other than direct
sales like hiring Brokers, MGAs, Online web portal and Bancassurance.
Online Portal and Bancassurance are more cost efficient as compare to
other. So being an underwriting Manager I would prefer Bancassurance.
are several model available of Bancassurance in the market. It is
basically the distribution of insurance products through the bank
branches. Where banks act as agents. It is a partnership between a
bank and an insurance company. Insurance company uses the bank sales
channel in order to sell insurance products. Bancassurance
helps in reducing reliance on traditional agents by making use of the
various channels owned by banks.
As entering in a new market insurer need local expertise and
knowledge to do profitable business and by Bancassurance insurer can
have already established distribution channel of local banks. As
banks are already doing business so they will be very much aware of
local trends and risks. Therefore, Banks are now a major distribution
channel for insurers, and insurance sales. Banks can often sell
insurance at higher premiums than many other channels, because Banks
have developed a better relationship of trust with its customers over
a period of time. Bancassurance are proved cost efficient as they use
the infrastructure that they already have. And banks have usually
trained and well educated staff and moreover they have branches all
over country. And as banks are already working there so they already
have a brand recognition. Conclusion is that with collaboration with
their bank partners it will be easy for insurance company to develop
new financial products more efficiently and it can establish market
presence rapidly and can obtain additional capital of banks as well
to improve their solvency and which can prove helpful in expansion of
business and products.
Benefits for the insurance company.
Quality Customer Access.
customer base already possessed by banks is considered to be ideal
for the distribution of insurance products. Insurance company can
make use of the wide range of bank customers to categorize potential
clients in detail according to their needs and values.
Increased Volume And Profit.
is helpful in escaping
from the high cost of captive agents, prompting insurers to look into
alternative channels. Making a team with a strong bank can help to
fund new business development opportunities and boost public
confidence in the insurer.
Benefit for Customers.
makes it convenient for customers in many ways. They can have
innovative and better range of products and as they are already
clients of banks so they can expect more credible solutions as it is
also important for bank to retain its customers.
One Stop Shop for All Financial Needs.
is easy and time saving for customers to buy a whole range of
financial services according to their needs under one roof.
Advantage for the Bank.
to Earn Fee Income.
selling insurance policies bank can earns a revenue. It is called as
fee-based income. It is easy money for the bank and is purely risk
utilizing same premises for selling insurance products which they use
for banking products
the overall customer acquisition cost for the bank.
Relationship with Customer.
competition in banking sector makes it difficult for banks to retain
their customers. Banassurance helps banks in this direction as well.
Providing solutions of multiple financial needs under one roof to the
customers means enhanced customer satisfaction.