The Hindu Business Line : Bancassurance in for polarisation, warns Aviva

Insurers need to brace themselves for a period of re-alignments on the bancassurance front, leading to a phase of polarisation marked by cross investments and exclusivity, insurance company Aviva, which relies significantly on its partnerships with banks, has cautioned.

Bancassurance in future may see some players take a more focused view on existing arrangements. While certain banks are actually yet to form partnerships, a number of others have entered into three-year agreements.

Aviva, which has referred to what Mr Anil Sahgal, Director - Bancassurance, says will be a "stage of polarisation" by the year 2010, has presaged the emergence of winners as well.

Various stages

The `fully-evolved stage' for bancassurance will witness complete integration of the front office and processes. Besides, a bank will have a certain degree of control over sales and customer experience.

This will, therefore, be quite different from the `developing stage' (marked by basic distribution agreements and joint lead generation by bank and insurer) and the `developed stage' (more proactive and need-based sale, while lead generation is done mainly by the branch).

Aviva itself is considerably dependent on bancassurance (which accounts for over 60 per cent of its sales) in addition to utilising its direct sales force, Mr Sahgal noted, while pointing to banks such as Centurion Bank of Punjab, ABN Amro, Canara Bank and Punjab & Sind Bank. In particular, Centurion Bank of Punjab plays a key role insofar as Aviva's total business is concerned.

The insurer's views may be seen against the current trends in the bancassurance space, including that spawned by banks' decisions to enter the insurance sector as strategic partners in joint ventures. Bank chiefs, especially those in the public sector, have also lately gone on record to say that they are exploring the possibility of setting up insurance ventures in partnership with other parties, including foreign outfits.

More Stories on : Financial Services | General Insurance

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page