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PROJECT TOPIC - BANCASSURANCEPRESENTED BY ABHISHEK PARKARThe Bank Insurance Model (BIM ), also sometimes known as Bancassurance , is the partnership between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell its insurance products.It is an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank's client base.

MEANING OF BANCASSURANCEHuge bank network- surpassed only by Postal dept

Public trust on Banking Institutions

Complementary nature of bank loans and insurance products

Improved accessibility Core Banking System.

One stop shop convenience for customers.

Reason for choosing banks as a channel to sell Insurance Products1,00,000 + Bank branches Spread evenly across metros, urban, semi-urban and rural areas.

Bankers knowledge of customers long standing relationship provided total profile of the customer base and needs

Opening up of the markets - Introduction of liberalization policies and deregulation of insurance sector.

Product Diversity - More number of products from Insurers (In place of one standard medical policy of 90's we have numerous standard policies )

The GenNext Demographic change to a huge young workforce with disposable income, global exposure and IT industry unleashed a national boom.

The Ready Indian Market IRDA came into existence in 1999 and the Government of India notification( Banking Regulation Act) dated August 3rd 2000,laid out the Bancassurance clearance.

Notification of IRDA 2002 Paved way for Banks as Corporate Agents.

RBI regulations allowed Banks to participate as Corporate Agency with No Risk Participation or JV with Risk Participation .

Support Regulation PSU General Insurers tied up with leading PSU and Pvt. Banks from 2002 onwards.

Individual agent oriented products evolved into Bancassurance friendly adaptations and aligned with the bankers customer needs.

By 2005 ,the Bancassurance channel had established as a mainstay in Marketing/ Sales, Growth path of the Insurers. Genesis of Bancassurance

Bancassurance Growth- 2010 & 2011 PLAN - Guaranteed Wealth ProtectorUp to 60% Equity investment & 40% Debt Investment.Auto asset allocation as per market conditions in Equity & Debt.Tax saving under section 80 C for the premiums paid per year.Wealth booster - 3.5% of FV on Maturity.Loyalty additions - 0.25% of FV for 5years ( Starting from 6th to 10th year)Insurance Cover 10 times of annual investment.Tax free returns under Sec 10 (10(D))11% 17% returns on the total investment made.

Plan Balance Advantage Fund18 months lock in period and this policy can be renewed after the lock in period.Minimum investment of Rs 10,000.Have option of getting monthly dividends and also the option of reinvesting the monthly dividend earnings.In this case both the Premium and dividend are taxable. (Tax benefits are available in case of long term investments in Mutual funds)Up to 30% investment in Debt products and 70% investment in Equity products.Average return of 20 % from previous issues of this mutual fund scheme, but here returns are not guaranteed as mutual fund investments are subjected to market risk.

Banks will have to be prepared for possible disruptions to client relations arising from more frequent non-life insurance claims.

Banks to develop core teams to handle Insurance.

To suggest tailor-made products for specific industries , homogenous groups.

Online sale and issue of plain vanilla policies.

Reward schemes/ incentives to be well defined for employees involved in Bancassurance.

Challenges in Bancassurance THANK YOU