There are numerous financial terms that many of us are not aware of. Terms that are used for services or products that we might have even used at some point in life. One such term is Bancassurance. While many may have used it, the term may be relatively new for a few of us. Today, let’s learn what Bancassurance is while checking out some recent examples of Bancassurance options available in the market.
What Is Bancassurance?
Bancassurance is nothing but the union of a bank and an insurance company. This partnership is aimed at providing health and life insurance products and services to the selected bank’s customers. According to the IRDA, Bancassurance is where the bank’s employees act as corporate agents, selling their insurance policy products and services.
Although the term was first coined in France in the 1980s, it was in the year 2000 that Bancassurance started being practised in India. Ever since then, several insurance companies have tied up with various banks to sell their insurance policies to different customer segments of the bank.
Let’s take a look at some recent examples of Bancassurance:
Niva Bupa & Star Health With IDFC First Bank
The most recent case of Bancassurance came with the tie-up between Niva Bupa Health Insurance Company Limited, previously known as Max Bupa Health Insurance Company, and IDFC First Bank. With this partnership, the companies aim to offer best-in-class medical health insurance options to the bank’s customers. Both Niva Bupa and IDFC First are digitally sound companies, and this synergy between them is expected to help them serve their customers better. In fact, Niva Bupa even has its own digital software known as InstaInsure to help customers get on board with their insurance policies.
Another insurance company linked with IDFC First Bank is the Star Health and Allied Insurance Company. This tie-up happened with the aim of offering Star’s insurance policies using IDFC First’s state-of-the-art digital platform and wide network. In a statement given at the time of this partnership, Vikas Sharma, Head - Wealth Management & Private Banking, at IDFC FIRST Bank, said, “This tie-up will help us reach out to IDFC First's customers and enable them to financially safeguard themselves from rising healthcare costs”, especially in the post-pandemic world.
Aditya Birla Health, Bajaj Allianz Life & Royal Sundaram With City Union Bank
City Union Bank(CUB) has tie-ups with eight insurance companies; three health insurance providers, 3 life insurance providers and 2 general insurance providers. Three of the most popular ones out of those eight are Aditya Birla Health Insurance Company Limited(ABHICL), Bajaj Allianz Life Insurance Company Limited and Royal Sundaram General Company Limited.
The partnership with Aditya Birla Health Insurance Company Limited(ABHICL) aims to offer health insurance policies to the bank’s customers. Meanwhile, Bajaj Allianz Life, a joint venture between Allianz SE and Bajaj Finserv Limited, offers life covers to the brank’s clientele. On the other hand, Royal Sundaram offers general insurance policies such as travel, home, motor insurance and more. These insurers aim to reach out to as many customers as possible via the bank’s current and potential clientele at its 727 branches across the nation.
HDFC Life With South Indian Bank
While all the above-mentioned tie-ups happened this year, the partnership between HDFC Life Insurance Company and South Indian Bank(SIB) was announced towards the end of last year. Considering the fact that India is an underinsured country, HDFC Life signed this partnership with hopes of reaching out to a larger section of the population via the South Indian Bank’s wide network.
Moreover, getting a health and life insurance policy has become a pressing need, especially in the post-pandemic world. HDFC Life aims to offer that and more, to all the customer segments who have opened their bank accounts with SIB. The insurer’s inclusive product suite combined with SIB’s vast clientele offers a great platform for the growth of both parties.
What are you waiting for? Go and check if your bank also offers bancassurance and get the one that suits you the best.
Disclaimer: BQPrime does not endorse any of the commodities mentioned above. Invest at your own risk and discretion.
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