Hyderabad: The bancassurance segment in the insurance industry has been growing at a steady pace and is competing with the traditional sale of insurance by agents. The growth of this channel is also quite phenomenal in the business of major life insurers such as Life Insurance Corporation of India (LIC) and SBI Life.
“`We are quite happy with the way in which bancassurance is growing. The sales through this channel registered an of about 60 per cent in 2007-08, Mr Surya Roy, Executive Director and Head of Bancassurance at LIC, told Business Line over phone from Mumbai while declining to give exact figures.
In the case of SBI Life, the integrated bancassurance business increased over 100 per cent to Rs 2,000 crore in a total business of Rs 5,6000 crore. ``This year too, we are expecting a similar growth in this segment,” Mr Uday Shankar Roy, CEO and Managing Director, SBI Life Insurance, said.
``In the next two/three years, the share of bancassurance is bound to grow as there is realisation among the banks and insurers that there is untapped insurance potential in the customers of a bank. The keenness of many a bank to augment other income (fee-based income) in view of growing pressure of margins will also drive this,” he said.
Big driver
Agrees Mr R Krishnamurthy, Managing Director of Watson Wyatt Insurance Consulting Ltd, which had conducted a study on bancassurance. ``A key feature of bank sales of insurance policies is that foreign banks and new generation private banks account for 60 per cent of the premium. Public sector banks, which account for three fourth of the banking system, have been slow to realise the benefits of cross selling insurance to customers. They are doing it now and this itself is a big driver,” he said.
ULIPs favoured
The bancassurance premiums are also substantially by sale of unit-linked policies. The proportion of term insurance - the pure protection component of life insurance business - is very low, at less than 10 per cent of the total.
“This reflects that the benefit of banking network in terms of enhancing the insurance penetration levels in the country to the various population segments is yet to be realised to a major extent,” Mr Krishnamurthy observed.
The total new business premium generated by life companies for the year ended March 2008 is about Rs 56,400 crore, of which about 24 per cent or Rs 13,500 crore was generated by bank branches, he added.
“`We are quite happy with the way in which bancassurance is growing. The sales through this channel registered an of about 60 per cent in 2007-08, Mr Surya Roy, Executive Director and Head of Bancassurance at LIC, told Business Line over phone from Mumbai while declining to give exact figures.
In the case of SBI Life, the integrated bancassurance business increased over 100 per cent to Rs 2,000 crore in a total business of Rs 5,6000 crore. ``This year too, we are expecting a similar growth in this segment,” Mr Uday Shankar Roy, CEO and Managing Director, SBI Life Insurance, said.
``In the next two/three years, the share of bancassurance is bound to grow as there is realisation among the banks and insurers that there is untapped insurance potential in the customers of a bank. The keenness of many a bank to augment other income (fee-based income) in view of growing pressure of margins will also drive this,” he said.
Big driver
Agrees Mr R Krishnamurthy, Managing Director of Watson Wyatt Insurance Consulting Ltd, which had conducted a study on bancassurance. ``A key feature of bank sales of insurance policies is that foreign banks and new generation private banks account for 60 per cent of the premium. Public sector banks, which account for three fourth of the banking system, have been slow to realise the benefits of cross selling insurance to customers. They are doing it now and this itself is a big driver,” he said.
ULIPs favoured
The bancassurance premiums are also substantially by sale of unit-linked policies. The proportion of term insurance - the pure protection component of life insurance business - is very low, at less than 10 per cent of the total.
“This reflects that the benefit of banking network in terms of enhancing the insurance penetration levels in the country to the various population segments is yet to be realised to a major extent,” Mr Krishnamurthy observed.
The total new business premium generated by life companies for the year ended March 2008 is about Rs 56,400 crore, of which about 24 per cent or Rs 13,500 crore was generated by bank branches, he added.
Source: The Hindu Business Line
No comments:
Post a Comment