Bancassurance to generate 35 % of private insurers' premium

KOLKATA: Banks acting as agents of insurance companies will likely to contribute about 35 per cent of private insurers' premium income by 2008, a study said here on wednesday.

Global insurance consulting firm, Watson Wyatt Worldwide in 'India Bancassurance Benchmarking Study 2006-07', said both life and general insurers were bullish about prospects of insurance penetration in the rural markets.

"About 30 per cent of the life insurers have indicated that by the year 2010, rural insurance business will constitute between 16-20 per cent of their total bancassurance new business premium," the study said.

A quarter of the respondents in the survey predicted that overall share of bancassurance would be about 50 per cent or more in the life segment in the year 2010.

Nearly 90 per cent of interviewed life insurers were expecting an increase of over 75 per cent in new business premium income from the current fiscal from the bancassurance route.

However, in case of non-life insurance, only 10 per cent of the respondents predicted bancassurance share of more than 50 per cent by 2010, while the majority forecast 30 per cent.

Watson Managing Director, Distribution Practise, R Krishnamurthy said insurance companies found the bancassurane route much cheaper in comparison to the agency model.

However, the quality of bank customer data was frequently poor and the absence of simple CRM tools in most banks made it difficult to launch specific initiative to cross sell insurance products. The study involved 25 banks and almost all public and private insurance companies