Bancasurrance channel to increase life insurance penetration: Survey

NEW DELHI: Bancassurance can help increase penetration of life insurance policies in India as banks are trusted partners and customers have more confidence in buying such products through them, an industry official said.

"Bancassurance is a channel that can reach those customers in Tier-II, Tier-III cities," said Anuj Mathur, Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company.

"From customer's standpoint, bank is a trusted partner. They have more trust or confidence in going through the bank branch where they go for their banking business and buy a policy from there," Mathur said on the sidelines of the release of a survey here.

The survey - 'Life Insurance: A Consumers' Perspective' - was a joint study by the life insurer and industry body Ficci to find out why insurance penetration is low in the country and how it can be scaled up.

Mathur said the survey was done to understand customers' needs, how to address them as well as to get to know their perspective.

He said the focus of the survey was to provide right advice to the customer and also ensure that there is an ongoing customer service which is available.

"I talked about orphan policies, in agency model, (where) the insurance agent will try to get the business and after that he will not be seen around, so the policy gets orphaned.

"In bancassurance if you see, that relationship continues because the bank branch is going to be there. The branch manager may change but people will be there for customers," he said.

The survey found that buyers of life insurance policies want to have professional assessment in choosing suitable insurance products and are willing to spend time and money.

The survey said more than half of the policyholders purchased life insurance policies in a planned manner.
However, 60 per cent of the respondents consider their life coverage to be inadequate and show willingness to pay extra premium to obtain additional cover.