The business of banking around the globe is changing due to integration of the global financial markets, development of new technologies, universalizationof banking operations and diversification in non-banking financial activities. Dueto all these movements, the boundaries that have kept various financial servicesseparate from each other have vanished. The coming together of differentfinancial services has provided synergies in operations and development of newconcepts. One of these is
Bancassurance simply means selling of insurance products by banks.
Bancassurance, which is
also called Allfinanz
one-stop financial service tomeet the requirements of banking services and also to provide reliableprotection to customers
.Bancassurance is identified as an
,the key issue which is closely
linked to the regulatoryclimate of the countryto improve the non-interest income of banks
.In this arrangement, insurance companies and banks undergo a tie-up, asystem in which a bank has a corporate agency with an insurance company to sellits products.
By selling insurance policies the bank earns revenue apart frominterest. It is called as fee-based income. This income is purely risk free forthe bank since the bank simply plays the role of an intermediary forsourcing business to the insurance company.
The distribution of insurance products through banks is beneficial not onlyto the insurance and banking companies, but also to the customers. The growth of