Bank earns

the fee
amount
from the
insurance
company

Bancassurance

Insurance
firm increase
its market
reach and
customer

Means selling insurance product through bank

Bank and insurance company come up in a
partnership where the bank sells the tied insurance
companys insurance product to its clients
Bancassurance arrangement benefits both the firms

Why Bancassurance ?

High credibility
Market penetration
Extensive reach including the rural pockets
Banks customer database
Low cost channel

Drawbacks

Compromising on data security

Conflict of interest between the other
product of bank and insurance
product
Quality of service after the product
sale

Conclusion
For banks it acts as a means of product diversification
and additional fee income;

For insurance company it acts as a tool for increasing

their market penetration and premium turnover and

For customer it acts as comprehensive

financial advisory services under one roof