T.C. Suseel Kumar. Executive Director (Bancassurance)

Transcription

1 T.C. Suseel Kumar Executive Director (Bancassurance) 1

2 A topic of relevance & significance.. 2

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4 why at all bancassurance? 4

5 bank insurance bancassurance 5

6 Insurer s advantage huge customer base Brand value of bank Access to New Markets Increased Market Penetration Lesser dependence on Traditional Channels Geographical spread & wide network Savings in Cost Better success ratio in sales New products increase in Profitability 6

7 Banker s benefits.. Fee Based Income Over dependence on interest spreads Leverage extensive customer base Many walk in customers One stop shop for all Financial Services Reduce risk based capital required for the same level of revenue Provide integrated financial services tailored to the life cycle of customers Brand value of Insurer can help in both business Increase in employee s productivity 7

8 customer s perspective Greater access to all financial services from a Bank - Banking and Insurance Products Lower Distribution Costs can give better return Better match between the customer needs and the solutions provided by the bank Convenience one stop shop Innovative &Cheaper products 8

9 win win for all three bank Insurance company customer 9

10 Bank Customer retention Satisfaction of more financial needs under the same roof Revenue diversification More profitable resource utilization Enriched work environment Establish sales orientated culture Insurance Company Revenue and channel diversification Quality customer access Quicker geographical reach Creation of brand equity Leverage service synergies with Bank Establish a low cost acquisition channel 10

11 the past 11

12 ORIGIN Barclays Life - Sept / a subsidiary of Barclays Bank in UK UK subsidiary not successful not termed as concept of Bancassurance The first Countries to venture into the field France and Spain During early 70s, Assurances du Credit Mutuel (ACM) Vie et IARD (Life and Gen. Insurance) officially authorized to start operations The concept after span of 15 years became Bancassurance A tie up arrangement of Banks with Insurance Companies for selling the Insurance Products in Life and Non-life segments as Corporate Agents for Fee Based Income 12

13 MOVING FORWARD Series of Reforms in France during Mid 1980s - Deregulation of the Credit Market Direct access to the Corporate Funding Market Change in Retail Banks strategies in sales & Marketing policies - reactivated their dormant insurance business the changes in economic scenario & legislative landscape took it further forward 13

14 Various models emerged on the scene Model Descriptions Advantages Disadvantages Distribution Agreement Joint Venture Full Integration Bank acts as an intermediary for an insurance company Bank in Partnership with One or More Insurance companies Creation of a new subsidiary Operations start quickly. No capital investment (less costly) Transfer of expertise Same corporate culture Lack of flexibility to launch new products. Possibility of differences in corporate culture. Difficult to manage in the long term Substantial Investment Countries where the model is mostly used USA, Germany, UK, Japan, South Korea Italy, Spain, Portugal, South Korea France, Spain, Belgium, UK, Ireland 14

15 the present 15

16 Banks Revenue Contribution of different streams 16

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18 Channel mix in India Individual products 18 Source : IRDA Annual Report

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20 the past, present & beyond 20

21 International distribution landscape 21

22 Expected growth rates

23 Banking scenario in India As on March 31 Bank Group (1) (2) (3) (4) (5) State Bank of India and its Associates Nationalized Banks $ Public Sector Banks Old Private Sector Banks New Private Sector Banks Private Sector Banks Foreign Banks Regional Rural Banks Non- Scheduled Commercial Banks All Commercial Banks Source : RBI Annual Report

24 thanks 24