Bancassurance to generate 40 pc of pvt insurers premium income

MUMBAI: Bancassurance, a distribution channel, will play a crucial role in the overall development of the Indian insurance sector with the channel expected to generate 40 per cent of private insurers premium income by 2012.

"This is significantly higher than the current 25-28 per cent," a Towers Watson India Bancassurance Benchmarking survey 2009-10, said.

The total new business premium income in both the life and general insurance sector as at end-February stands at Rs 42,285 crore, as per the IRDA data.

"Bancassurance is set to grow. Most insurance companies are facing a cost-pressure in bringing-in new business. They are finding it difficult to recruit, train and retain people with the turnover rate as high as 70 per cent. This is a big issue and the most viable option for them for distribution is bancassurance," R Krishnamurthy, Managing Director, Towers Watson (involved in assisting clients on improving insurance distribution practices in India), told PTI here.

In general insurance, presently 17 per cent of premium income comes from bancassurance but with relation to public sector companies, it is as low as six per cent.

"This means there is an ample scope for growth," Krishnamurthy said.