BANKING AFFAIRS

Detailed explanation-1: -Definition: Bancassurance means selling insurance product through banks. Banks and insurance company come up in a partnership wherein the bank sells the tied insurance company’s insurance products to its clients.

Detailed explanation-2: -Bancassurance refers to an agreement between a bank and an insurance company. In bancassurance, the insurance company can use the bank’s distribution channels to sell products. Banks, in return, receive a certain fee from the insurance company.

Detailed explanation-3: -It is convenient for the customers as they can get access to different insurance policies through their bank. Banks benefit from this arrangement as they get the added revenue that is earned by selling the insurance policies. Insurance companies get a wider customer base and larger market reach through bancassurance.

Detailed explanation-4: -Bancassurance Models They offer more than one company’s product. Insurance companies pay commissions to the bank like management fees, etc. Strategic Alliance Model – In this model, there is a linkup between the insurance company and the bank.