INTRODUCTION

The business of banking around the globe is changing due to integration of global financial markets, development of new technologies, universalization of banking operations and diversification in non-banking activities. Due to all these movements, the boundaries that have kept various financial services separate from each other have vanished. The coming together of different financial services has provided synergies in operations and development of new concepts. One of these is bancassurance. Bancassurance simply means selling of insurance products by banks. In this arrangement, insurance companies and banks undergo a tie-up, thereby allowing banks to sell the insurance products to its customers. This is a system in which a bank has a corporate agency with one insurance company to sell its products. By selling insurance policies bank earns a revenue stream apart from interest. It is called as fee-based income. This income is purely risk free for the bank since the bank simply plays the role of an intermediary for sourcing business to the insurance company. It has its genesis decades ago in France, where this channel today is the predominant source of insurance business. It has grown at different places and taken shapes and forms in different countries depending upon demography, economic and legislative prescription in that country. In some countries, bancassurance is still largely prohibited, but it was recently legalized in countries such as the United States, when the Glass-Steagall Act was repealed after the passage of the Gramm-Leach-Bliley Act. Bancassurance is a new buzzword. It originated in India in the year 2000. Following the recommendations of First Narasimham Committee, the contemporary financial landscape has been reshaped. Thus, present-day banks have become far more diversified than ever before. Therefore, their entering into insurance business is only a natural corollary and is fully justified too as ‘insurance’ is another financial product required by the bank customers.

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From the view point of insurance industry also the importance of bancassurance was felt necessary. With the increased pressures in combating competition, companies are forced to come up with innovative techniques to market their products and services. At this juncture, banking sector with it's far and wide reach, was thought of as a potential distribution channel, useful for the insurance companies. That’s where the bancassurance came into existence. Thus, bancassurance is poised to become a key determinator / differentiating factor in the Insurance industry as well. Given India’s size as a continent it has, however, a very low insurance penetration and low insurance density. The penetration level of life insurance in the Indian market is abysmally low at 2.3% of GDP with only 8% of the total population currently insured. As opposed to this, India has a well-entrenched wide branch network of banking system, which only few countries in the world could match with. It is predicted by experts also that in future 90% of share of premium will come from Bancassurance business only. And almost half of the population likely to be in the 'wage earner' bracket by 2010 that there is every reason to be optimistic that bancassurance in India will play a long inning. Currently there are more and more exchange of wedding rings between banks and Insurance Company for better business prospect in future. With the enoromous benefits for banks like increase in revenue, return on asset, customer retention, better reputation etc., the bancassurance is going to be a big revolution in the banking industry. It is against this backdrop an attempt is made to analyse the financial performance of the AXIS bank in bancassurance so far and to find out the areas where they can make use of and still need to focus in order to make AXIS bank to play a vital role in the bancassurance industry.

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MEANING, DEFINITION AND CONCEPT
MEANING: Bancassurance is a combination of two words ‘Banc’ and ‘assurance’ signifying that both banking and insurance products and service are provided by one common corporate entity or by banking company with collaboration with any particular Insurance company. In concrete terms bancassurance, which is also known as Allfinanz describes a package of financial services that can fulfill both banking and insurance needs at the same time. It is the provision of insurance (assurance) products by a bank. The usage of the word picked up as banks and insurance companies merged and banks sought to provide insurance, especially in markets that have been liberalized recently. In its simplest form, Bancassurance is the distribution of insurance products through the Bank’s distribution network.. It is a phenomenon wherein insurance products are offered through the distribution channels of the banking services along with a complete range of banking and investment products and services. Bancassurance tries to exploit synergies between both the insurance companies and banks. DEFINITION: The term first appeared in France in 1980, to define the sale of insurance products through banks’distribution channels (SCOR 2003). The Life Insurance Marketing and Research Association’s (LIMRA’s) insurance dictionary defines bancassurance as “the provision of Life insurance services and building societies”. According to IRDA, ‘bancassurance’ refers to banks acting as corporate agents for insurers to distribute insurance products.” Literature on bancassurance does not differentiate if the bancassurance refers to selling of life insurance products or non-life insurance products.Accordingly, ‘bancassurance’ is defined to mean banks dealing in by banks

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the evolution of bancassurance as a concept and its practical implementation in various parts of the world. have thrown up a number of opportunities and challenges. Bancassurance is a relatively new concept in the global stage. in essence it does depend upon the model used. It is also important to clarify that the term bancassurance does not just refer specifically to distribution alone. The concept of bancassurance was emerged in the western world when banks began to get involved in marketing of insurance business. many regard Barclay’s Life. However.But in this research the focus is entirely concentrated towards life insurance. It has reared its head in France in the late 1970’s. But the term bancassurance came into existence in France after 1980 to define the sale of insurance through an intermediary bank. Unlike banks and insurers which have been around in one form or another for centuries. Bancassurance provides not only provides an alternative to pensions but also caters to the current taste of customers.insurance products of both life and non-life type in any forms. CONCEPT: This concept gained importance in the growing global insurance industry and its search for new channels of distribution.motivated by among other things changing customer needs due to an inadequate pension scheme that existed at that time. the definition of a fully developed model that is most commonly used is: “'Manufacturing and distributing cost effectively banking and insurance products to a common customer base”. From a purely historical perspective. which is no longer satisfied by the traditional products offered 4 . There are many definitions of bancassurance and. as the pioneer of bancassurance. cultural and/or behavioural aspects also form an integral part of the concept of bancassurance (SCOR 2003). such as legal. As the governments can no longer maintain the funding that people have begun to take a more active role in their future entitlements by looking at alternatives to pensions.However. set up in 1965 in the UK as an insurance subsidiary of the eponymous bank. and the stage of development. bancassurance has only been around for a few decades. Other features. fiscal.

In U. squeezed margins. only Saudi Arabia has made some feeble attempts that even failed to really take off or make any change in the system. Almost 100% of the banks in France are selling insurance products. ii) Banks are the key pillars of India’s financial system. which was only a European phenomenon.by the insurers. In Middle East. Hardly 20 % of the United states banks are selling insurance products as only recently the Glass steagell act was repealed which has prohibited the banks from entering into the financial services. Thus lackluster pension schemes. RELEVANCE OF BANCASSURANCE IN THE INDIAN FINANCIAL SECTOR i)) Integration of the financial service industry in terms of banking. 5 . Colombia and Mexico also the bancassurance is becoming popular. The Universal Banking concept is evolving on these lines in India. Brazil. In Asia: Singapore. As bancassurance allowed the banks to move away from income generated by the interest spreads it is viewed as a solution to alleviate the problem of poor consumer savings. the need for one stop shop delivery for all financial services among the consumers. is becoming popular in other continents also Bancassurance seems to have made the greatest impact in France. In Portugal and Spain it was over 70%. Public have immense faith in banks. In Argentina. poor consumer savings. Taiwan and Hong Kong have surged ahead in Bancassurance then that with India and China taking tentative step forward towards it. squeezed margins. securities business and insurance is a growing worldwide phenomenon. It is claimed that the 55% to 60% of the life insurance business in France had come through banks.K it is about 30%. increasing importance of strategic alliance has all led to the growth of bancassurance in Europe. the bancassurance. Chile. With the success of bancassurance model in Europe.

Banks’ entry in distribution can help to enlarge the insurance customer base rapidly.Rural and semi urban bank accounts constitiute close to 60% in terms of number of accounts.iii) Share of bank deposits in the total financial assets of households has been steadily rising. This helps to popularize insurance as an important financial protection product. each branch serving an average of 15. 6 . where insurance growth has been most buoyant. Selling insurance to existing mass market banking customers is far less expensive than selling to a group of unknown customers. and 14400 semi-urban branches.Share of ‘individuals’ as a category in bank accounts is steadily increasing. Total of 65700 branches of commercial banks. vi) Banks have enormous retail customer base. Competition in the Personal Financial Services area is getting `hot’ in India that Banks can retain customer loyalty by offering them a vastly expanded and more sophisticated range of products.196 exclusive Regional Rural Banks in deep hinterland.indicating the number of potential lives that could be covered by insurance with the upfront involvement of banks. ix) Banks can put their energies into the small-commission customers’ that insurance agents would tend to avoid. iv) Indian Banks have immense reach to households. vii) Banks world over have realized that offering value-added services such as insurance. x) Bancassurance helps to lower the distribution costs of insurers. This is vitally important to bring higher motivation levels in banks in India. helps to meet client expectations. Acquisition cost of insurance customer through bank is low. Insurance distribution can also help the bank to increase the fee-based earnings to a large extent.There are 32600 branches in rural India (about 50% of total).000 people. v) Banks enjoy considerable goodwill and access in the rural regions. viii) Fee-based selling helps to enhance the levels of staff productivity in banks.

in a credible framework. in the form of commissions Reduction of the effect of the bank fixed costs.Portability of pension accounts is a vital requirement which banks can fulfill. as they now and/or profits from the business (depending upon the relationship) now also spread over the life insurance relationship. traditionally the core element of profitability for a bank which manages clients money. New products could substantially enhance the profitability andincrease productivity.Low cost of collecting pension contributions is the key element in the success of developing the pension sector. REASONS FOR BANKS TO ENTER INTO BANCASSURANCE The main reasons why banks have decided to enter the insurance industry area are the following:  Intense competition between banks.This shift in investment preferences has led to a reduction in the share of personal savings held as deposits. has led to an increase in the administrative and marketing costs and limited the profit margins of the traditional banking products.  Financial benefits to a bank performance can flow in a number of ways. Money transfer costs in Indian banking is low by international standards.Experience in Europe has shown that bancassurance firms have a lower expense ratio. as they are Opportunity to increase the productivity of staff. against a background of shrinking interest margins. as briefly outlined below: Increased income generated. This benefit could go to the insured public by way of lower premiums. For medium-term and long-term investments there is a trend away from deposits and toward insurance products and mutual funds where the return is usually higher than the return on traditional deposit accounts. xi) Banks have an important role to play in the pension sector when deregulated. Banks have sought to offset some 7 . have the chance to offer a wider range of services to clients  Customer preferences regarding investments are changing.

 Banks are experiencing the increased mobility of their customers.g.Banks believe that the quality of their client information gives them an advantage in distributing products profitably.  Client relationship management has become a key strategy.  The realization that joint bank and insurance products can be better for the customer as they provide more complete solutions than traditional standalone banking or insurance products.Life insurance is also frequently supported by favourable tax treatment to encourage private provision for protection or retirement planning. To build and maintain client relationships.  It is believed that as the number of products that a customer purchases from an organization increases the chance of losing that specific customer to a competitor decreases.  Analysis of available information on the customer financial and social situation can be of great help in discovering customer needs and promoting or manufacturing new products or services. There are several reasons for this: ✔ The main reason may be the complementary nature of life insurance and banking products: bank employees are already familiar with financial products and quickly adapt to selling insurance-based savings or pension products. 8 . who to a great extent tend to have accounts with more than one bank. much fewer non-life insurance products are distributed through bancassurance than life insurance products. insurance companies).banks and insurers are forming partnerships to provide their clients with a wide range of bank and insurance products from one source.of the losses by entering life insurance business. This preferential treatment makes insurance products more attractive to customers and banks see an opportunity for profitable sales of such products. WHY IS BANCASSURANCE MORE SUITED TO LIFE INSURANCE PRODUCTS? Traditionally. Therefore there is a strong need for customer loyalty to an organization to be enhanced. compared with other distributors (e.

which are not necessarily prevalent in bancassurance. for insurance company it acts as a tool for increasing their market penetration and premium turnover and for customer it acts as a bonanza in terms of reduced price. It can cover operating expenses and make operating expenses profitable by leveraging their distribution and processing capabilities 9 . In addition. To the bankers:  In a situation of constant asset base the bank can increases Return on Assets (ROA)by increasing their income. such competencies require significant investment in training and motivation. This would seem to explain why for a long time bancassurance operators hesitated to offer these types of product. And we now know that. high quality products and delivery to doorsteps.✔ On the other hand. This is a major advantage in life insurance and less important in personal injury insurance. ADVANTAGES OF BANCASSURANCE: Everybody is a winner in bancassurance. and therefore additional costs. Hence it is a win-win solution for everyone who involved. the non-life market requires special management and selling skills. For banks it mainly acts as a means of product diversification and additional fee income. banks have a better image and are more trusted than insurance companies. ✔ Life insurance products are generally long-term products. in many countries. by selling insurance products through their own channel. which could have a negative impact on brand image. which require customers to have complete confidence in the institution that invests their money. ✔ Some professionals also refer to the claims management aspect of personal injury insurance. ✔ Bank advisers can use their knowledge of their customers’ finances to target their advice towards specific needs.

insurance  loans etc.  improve overall customer satisfaction resulting in higher customer retention levels  providing for a lower per lead cost when advertising through print. mutual funds.  Since banks have already established relationship with customers. investment and purchase capability can be used to customize products and sell accordingly. 10 . conversion ratio of leads to sales is likely to be high. The advantage of a bank over traditional distributors is the lower cost per sales lead made possible by their sizeable loyal customer base.    services along with other financial services such as banking. i.e. spending habits. radio and television. they can Banks enjoy significant brand awareness within their geographical region conditions of customers to sell insurance products. The penetration of banks' branches into the rural areas can be utilized to sell products in those areas.  Customer database like customers' financial standing. personal Enhanced convenience on the part of the insured Easy access for claims. Innovative and better product ranges To the insurers: Insurers can exploit the banks' wide network of branches for distribution of  products. Can leverage on face-to-face contacts and awareness about the financial By acting as a one stop shop for all financial services.  Can establish sales oriented culture among the employees To the customers: Comprehensive financial advisory services under one roof. as banks is a regular go. Further service aspect can also be tackled easily..

they are demanding greater convenience in financial services. complete integration of insurance with other bank products and services  Another point is the handling of customers. knowledge of target customers' needs. With customer awareness levels The emergence of remote distribution channels. defined sales process for introducing insurance services. Bancassurance training for bank employees: The bank employees will need to be trained in the following aspects of the insurance business:           Features of the insurance products sold How to identify and approach a potential customer Basic insurance needs Handling basic objections Other distribution channels and products Expected roles Procedures Remuneration and incentive schemes Cultures Customer service Continuous training and supervision: Apart from initial training. simple yet complete product offerings. strong service delivery mechanism. Some ways in which this can be done are: 11 .Factors that appear to be critical for the success of bancassurance are  Strategies consistent with the bank's vision. synchronized planning across all business lines and subsidiaries. there should be further training to support the development of the agent or employee. such as PC-banking and The emergence of newer distribution channels seeking a market share in the increasing.  Internet-banking.  network. quality administration. would hamper the distribution of insurance products through banks.

The structure shown above generates benefits as follows:  Financial rewards for employees who generate warm leads 12 . the bank will get a share. of the normal first year commissions.  Selling in the bank branches (by employees or by financial advisers): For simple packaged products: employees could be rewarded with gifts and/or salary increments based on their selling performance in promoting both banking and insurance products. to be credited to the bank profit center for the bancassurance operation.  Warm leads: In return for providing warm leads. The bank management sets the commission level for each manager and employee engaged in the bancassurance operation. as a principle. A basis is needed for allocating this amount between branch staff (who provide the warm leads) and the bank owners. A possible basis would be: 25% 25% 50%. Such performance could be quantified via the use of a points system where by the various products are allocated as a number of points. say 50%.           Agency meetings Bank branch meetings Area banking meetings In-house magazine Training circulars Area sales seminars Company library Video tapes Certified courses Lectures Training material booklets Remuneration of bank employees: Any commission payable by the insurance company is.

Thus it has become imperative for the banks to retain the customer by providing more value added services under one roof as well as to find alternative ways to generate more income. With the shift in the customer preferences from deposits to investments. It has become much more diversified. As bancassurance provides the best possible solution to all these. 13 . 1. AXIS bank is also having a tie up with Bajaj Allianz Life Insurance for selling Life insurance products to its retail customers. intense competition etc. Financial rewards for managers and other staff of the bank branch who Group awards or bonuses are more desirable when the contribution of the have supported bank activities while the assurance business was being generated.2 B) STATEMENT OF THE PROBLEM To understand the financial impact of bancassurance in AXIS bank and to suggest the ways and means to improve the existing performance by way of collecting responses from the customers. most of the banks nowadays have started selling insurance products to its customers.. A) NEED FOR THE STUDY Today’s banking business is not the one we have seen in the past. individual employee is either difficult to distinguish or depends on group cooperation. Hence there is a need for the study to know whether AXIS bank has been benefited out of bancassurance by way of financial analysis and to suggest the areas where they can make use of and converge the attention of the bank if any. the banks saw their profit margin declining. is required.

• • • same. • Finally. The study would enable AXIS bank to know how far their initiatives in promoting It would also enable the bank to know whether they have established a strong It would also enable the bank to know the number of persons who are planning to Bajaj Allianz life Insurance products have reached its customers. as it is important for bancassurance. relationship with the customers. • The bank can also know the willingness of the customers in accepting AXIS bank as their distribution channel in case of obtaining Bajaj Allianz Life Insurance policy in future. take a life insurance policy in their near future so that it can take the advantage of the 14 .C) BENEFITS TO THE ORGANIZATION • • Through the study the bank can know its financial performance in The study would enable AXIS bank to know the general opinion of bancassurance and whether it is contributing to the overall progress of the bank or not. it provides the opportunity for the bank to know the areas where they need to give much emphasis and uplift themselves in order to occupy a key role in the area of bancassurance. customers about insurance and bancassurance so as to know whether any awareness need to be created about the same.

in case of their choice is Bajaj Allianz Life Insurance for obtaining a policy 15 .  It also pinpoints the willingness of the customer in accepting AXIS Bank. The study also throws light on the relationship building by AXIS bank with its  customers. The study also measures the initiatives taken by AXIS bank in endorsing Bajaj  Allianz Life insurance products. as their distribution channel.  It also indicates the persons who are willing to take life insurance policy in the immediate future and the reasons for taking the same.1. as it is the deciding factor for considering the bank as a one-stop shop for all their financial solutions. The study analyses the awareness of the customer and the viewpoints of the customer  about insurance as well as bancassurance.2  D) SCOPE OF THE STUDY The study focuses on the financial performance of AXIS bank in bancassurance and its contribution to the overall progress of the bank with respect to life insurance alone.

 To assess the relationship building factors of AXIS bank.2 OBJECTIVES OF THE STUDY Primary objective: It is to make an analysis on the financial performance of AXIS bank in bancassurance with specific reference to life insurance and to suggest the ways and means to improve the existing performance by way of collecting responses from the customers.  channel in case of their willingness to obtain Bajaj Allianz Life Insurance policy in future.1. Secondary Objectives: . which is significant for To know the customer preferences in selecting AXIS bank as a distribution bancassurance.  To analyze the initiatives taken by the AXIS bank in endorsing the Bajaj Allianz Life Insurance products. 16 .  To analyze the financial performance of AXIS bank in bancassurance and its contribution to the overall progress of the bank using ratio analysis.

4  LIMITATIONS OF THE STUDY Time has played a biggest constraint that the research could not be carried out comprehensively as the duration of the study was only 3 months. As the research contains the Secondary data for making a financial analysis the accuracy and reliability of the analysis depends on reliability of figures derived from financial statements. hence the conclusion would not be a universal one. the study was effective in analyzing the performance of AXIS bank in bancassurance with specific reference to life insurance. Personal biases and prejudices of the customers may also affect the study.1 . Inspite of the limitations. The sample size for collecting the primary data was meager as it includes only 100 respondents.    17 .

which has seen rapid growth with strong contribution from private banks and foreign banks. During the first phase of financial reforms.000 ATMs.1. which included banks such as UTI Bank(now re-named as Axis Bank) (the first of such new generation banks to be set up). According to a report by ICRA Limited.28 public sector banks (that is with the Government of India holding a stake). They have a combined network of over 53. This crucial step led to a shift from Class banking to Mass banking. a rating agency. along with the rapid growth in the economy of India. kickstarted the banking sector in India. with the private and foreign banks holding 18. in the early 1990s.5 A) INDUSTRY PROFILE Banks are among the main participants of the financial system in India.000 branches and 17.5% respectively. regional rural banks and private sector banks (the old/ new domestic and foreign). the then Narasimha Rao government embarked on a policy of liberalisation and gave licences to a small number of private banks. This move. there was a nationalization of 14 major banks in 1969. the public sector banks hold over 75 percent of total assets of the banking industry. the State Bank of India and its group banks. In terms of ownership. which came to be known as New Generation tech-savvy banks.2% and 6. There are 70324 bank offices in India and 18 . 29 private banks (these do not have government stake. Since then the growth of the banking industry in India has been a continuous process. commercial banks can be further grouped into nationalized banks. During the second phase of reforms. they may be publicly listed and traded on stock exchanges) and 31 foreign banks. Scheduled banks constitute of commercial banks and co-operative banks. Banks in India can be categorized into non-scheduled banks and scheduled banks. AXIS Bank andICICI Bank. It has become an important tool to facilitate the development of the Indian economy. Currently. India has 88 scheduled commercial banks (SCBs) .

To address the challenge of retention of customers. The top concern in the mind of every bank's CEO is increasing or at least maintaining the market share in every line of business against the backdrop of heightened competition. With the entry of new players and multiple channels. mobile banking. It’s a huge banking infrastructure and among best banking network in world. are unfortunately burdened with excessive Non Performing assets massive manpower and lack of modern technology. There has been an increase in the bank focus on retail segment with the economic slow down.. This makes it imperative that banks provide best possible products and services to ensure customer satisfaction. The banks today are more market driven and market responsive. customers have become more discerning and less "loyal" to banks. The Public Sector Banks. The success of such a model depends upon the approach adopted by banks with respect to customer data management and customer relationship management. Banks are now realizing that one of their best assets for building profitable customer relationships especially in a developing country like India is the branch.each bank office serves around 16000 people. phone banking. ATMs. Branches are in fact a key channel for customer retention and profit growth in rural and semi-urban set up. which are the mainstay of the Indian Banking system account. while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. 19 . etc. there have been active efforts in the banking circles to switch over to customer-centric business model. Current scenario: As far as the present scenario is concerned the banking industry is in a transition phase. Retail banking has become the new mantra for banking industry. They are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. On the other hand the Private Sector Banks in India are witnessing immense progress They have pioneered Internet banking..

Thus. It has issued a set of detailed guidelines setting out various ways for a bank in India to enter into insurance sector. Each of the regulators has given out detailed guidelines for banks getting into insurance sector. any commercial bank will be allowed to undertake insurance business as agent of insurance companies. is available.Branches could also be used to inform and educate customers about other. the banking and insurance sectors are regulated by two different entities (banking by RBI and insurance by IRDA) and bancassurance being the combinations of two sectors comes under the purview of both the regulators. IRDA has also felt the necessity of introducing an additional channel of distribution. an investment insurance business with risk participation. with the reorganization of the need for banks to diversify their activities at the right time. 20 . etc. more efficient channels.50 crores.  Finally. It started picking up after Insurance Regulatory and Development Authority (IRDA) passed a notification in October 2002 on 'Corporate Agency' regulations. The Reserve Bank of India being the regulatory authority of the banking system. They are:  Joint ventures will be allowed for financially strong banks wishing to undertake For banks which are not eligible for this joint-venture option. whichever is lower. Legal Requirements: In India. all the above led to the practice of bancassurance. which is the Bancassurance to reach out more people. mutual fund products. This will be on a fee basis with no-risk participation. permitted them to enter into insurance sector as well. to advise on and sell new financial instruments like consumer loans. Highlights of the guidelines are reproduced below: RBI guideline for banks entering into insurance sector provides three options for banks. insurance products.  option of up to 10% of the net worth of the bank or Rs.

Union Bank of India. HDFC bank.The Insurance Regulatory and Development Authority (IRDA) guidelines for the bancassurance are:  Each bank that sells insurance must have a chief insurance executive to handle all All the people involved in selling should under-go mandatory training at an Commercial banks. including cooperative banks and regional rural banks.  Currently there has been an increase in the number of tie-ups with banks and insurance companies. Development Credit Bank. the insurance activities..  become corporate agents for one insurance company. saraswat bank. Bank Bank of Rajasthan. Some of the Bancassurance tie-ups in India are as follows: TABLE 1. 21 .1: SOME OF THE BANCASSURANCE TIE-UPS IN INDIA Insurance Company Birla Sun Life Insurance Co. Ltd. Bank of Muscat. Lakshmi Vilas Bank. may Banks cannot become insurance brokers. Deutsche Bank and Catholic Syrian Bank Dabur CGU Life Insurance Company Canara Bank. American Express Pvt. Andhra Bank. Ltd.  institute accredited by IRDA and pass the examination conducted by the authority. Ltd Bank and ABN AMRO Bank HDFC Standard Life Insurance Co. Some of the models practiced by the banks in India are I) Referral model ii) Corporate agency model iii) Insurance as a fully integrated model etc.

General Insurance Corporation (GIC) and its four subsidiaries. Life Insurance corporation of India (LIC). They cannot restrict themselves to traditional banking. Centurion Life Insurance Corporation of India Bank. Janata Urban Co-operative Bank. ICICI Bank. Met Life India Insurance Co. South Indian Bank. and Ltd. Dhanalakshmi Bank and J&K Bank State Bank of India Bajaj Allianz General Insurance Co. Satara District Central Co-operative Bank. Federal Bank. National Insurance Company and United Insurance Company. Corporation Bank. Bank of India. UTI Technological Service and UTI Investor Services were also sharing the 22 . SBI Life Insurance Company Ltd. Indian Overseas Bank.5 (B) COMPANY PROFILE About AXIS BANK: Axis Bank was established in 1993 and was the first private sector bank to start operations after the Government of India allowed entry of private banks. Yeotmal Mahila Sahkari Bank. Royal Sundaram General Insurance Standard Chartered Bank. South Indian Bank Thus. Vijaya Bank. Karur Vysya Bank and Lord Krishna Bank Ltd. Ltd. Citibank. Oriental Insurance Corporation. Ltd. in India are brighter that banks in India can make use of the situation to gain profitable business 1. Citibank. ICICI Prudential Life Insurance Co Allahabad Bank. Punjab and Maharashtra Co-operative Bank. As bancassurance prospects venture. Company United India Insurance Co. Karnataka Bank. the present day banks are more diversified than ever before. New India Assurance Company. Oriental Bank of commerce. The name of the Bank was changed in 2007 as there was brand confusion because many unrelated shareholder entities such as UTI Securities.Lord Krishna Bank. ABN AMRO Bank. Previously called UTI Bank. Amex and Repco Bank. Axis Bank was promoted by Unit Trust of India (UTI-I).

It divides its business into five segments viz. During 2007--08. The bank pruned its net stressed assets consistently from 1. Moreover. treasury.36 per cent by end of 2007--08. China. Consistent growth: The bank’s net profit has grown by over 30% YoY in 36 out of the last 38 quarters. CAR. SMEs. Subsidiaries Axis Bank Ltd.507 crore. The bank's broad products and services include consumer banking.UTI brand. Staring with one branch in Ahmedabad in 1994. The net profit has grown by over 60% YoY in each of the last eight quarters. the bank's agricultural advances grew by 35 per cent to Rs. channel financing and structured products. large corporates. The bank's retail assets constituted 23 per cent of total advances at the end of March 2008. The important performance indicators such as ROA. Its advances to SMEs reported a whopping 74 per cent growth to Rs.11. Axis Private Equity Ltd. the bank now has 835 branches including extension networks (31st March 2009) across 30 States and 4 Union Territories. corporate banking. capital markets and financial advisory services. NPA and NIM have remained strong over the last five 23 .92 per cent in 2002--03 to 0. agricultural. The bank maintains a healthy asset quality with 81 per cent of its corporate advances having a rating of at least `A' as at the end of March 2008.5. mid--corporate and SMEs. The bank also has overseas offices in Singapore. Hongkong and Dubai. agri-business. NRI business.536 crore. Axis Sales Ltd. retail loans. Axis Trustee Services Ltd. the name was changed to connote stability and solidarity as well as was in line with the bank’s expanding operations across geographical boundaries. Housing loans accounted for 57 per cent of total retail assets. Auto loans constituted 7 per cent of its retail loans The bank divides its advances into three focus areas i. Also the two quarters in which the profit did not grow was on account of write-off of extraordinary items (G-Sec valued on mark to market basis).e.

lending to agriculture. December 2008 • • Post its rebranding exercise in 2007 the bank has continued to do well and the change in name has not affected the bank’s business. Axis Bank appears to be gearing up well to reduce the gap existing in the margins as well as the total balance sheet size. looking at the returns generated on networth (ROE) and the growth in advances and deposits. Also during Q1FY10. This has helped the bank particularly in the acquisition of low cost retail deposits.9 million customer accounts The above business groups are supported by the following groups: 24 . Also HDFC Bank scores higher in terms of margins (NIM). the total number of branches including extension centers of the bank has increased from 339 in FY05 to 835 in FY09 whereas ATMs have increased from 1. expanding balance sheet: The bank has continued to expand its geographical coverage across the country. the share of current account saving account deposits in the total deposits (CASA) is higher in case of HDFC Bank.595. Over the last five years. SME and mid-corporates as also the sale of third-party products. the bank added 26 new branches including extension centers and 128 ATMs. Expanding footprint. The bank’s balance sheet has increased at a CAGR of 43.65% over the last five years Key Positives • • • • Market leadership position in the travel card segment Market leader in the prepaid cards segment Second largest merchant acquirer in the country Leadership position in private placement of bonds and debentures till 31st High quality of its assets The Bank’s Non-Performing Assets (NPAs) are among the lowest in the industry. retail assets.599 to 3.years. As can be from the table above. Axis Bank comes very near to HDFC Bank in terms of important efficiency parameters. However. In fact in FY2008 it saw its customer acquisition grow at a robust rate of 67% over the last year to over 9.

      Audit & Compliance Credit & Market Risk Finance. Administration & Legal Human Resources Information Technology Operations 25 .

2.0 REVIEW OF LITERATURE 2.1 Bancassurance - A Global Breakdown:
It is important to outline the impact that bancassurance has had on differing regions around the world, as well as looking at the major regulations that impact the further growth of bancassurance. Below, is provided with a brief synopsis of bancassurance markets in certain key areas. EUROPE: Bancassurance is a construct of Europe (France in particular) and this perhaps helps explain why it is such a phenomenal success within certain European markets. Largely the 1989 Second Banking Coordination Directive motivated the large influx of banks into insurance within Europe in recent years. Currently, the penetration levels are fairly stable in Europe, since bancassurance in the majority of Western European countries (France, Netherlands, Portugal and Spain) has reached what studies such as Swiss Re. (2002) argue to be maturity. These penetration levels will only pick up once bancassurance manages to fully infiltrate Central and Eastern European countries such as Hungary and Poland, and the Baltic nations. Currently, the final major hurdle for bancassurance in Western Europe seems to lie in the U.K. where a predominantly strong insurance board still attempts to resist the bancassurance trend even in the face of widespread deregulations. FRANCE: In France, the success of bancassurance is mitigated by a favorable tax treatment on life insurance products, lack of competition within the insurance industry, and an inadequate pension scheme (Bonnet and Arnal (2000). The pioneer of bancassurance in France is argued to be Credit Mutual, which created its own life and non-life subsidiaries in the early 1970’s (Sakr (2001)).

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Bancassurance has seen the most success in the life insurance market, something that is true for every nation, increasing from 52% in 1995 to account for 69% of life insurance business n 2000 (Durand (2003), and Turner (1998)). However, as of late, the banking networks market share of the life insurance market has remained fairly stagnant, actually dropping over the years to 66% market share in 2001 and 61% in 2003 (Falautona and Marsiglia (2003), Datamonitor (2003)). This resulted from a combination of falling stock market prices and the banking network bearing the brunt of lower transfer prices according to Benoist (2002). This means that banking and insurance companies are overseen separately within the country. For a conglomerate, the regulator will depend on who is the parent of the two. UNITED KINGDOM: Bancassurers have faced a tougher time in trying to penetrate the U.K. market, thanks in large to a combination of restrictive regulations and a powerful insurance governing body. The first move for bancassurers came in 1985 when Standard Life purchased a stake in the Bank of Scotland. Changes in legislation soon followed in 1986 and 1988, which made it legal for banks to market insurance products and set up their own insurance subsidiaries (Sakr (2001)). Even then, the main type of union between the two was a joint venture, since the banks placed an emphasis on maintaining the knowledge of the insurer. Twenty years later, researchers argue that bancassurance is still in its infancy within the U.K., currently accounting for 15% of new insurance premiums issued (Benoist (2002), It is argued that restrictive regulations were detrimental to the growth of bancassurance within the country and that due to the lack of experience the correct model for the U.K. is still to be found (Hubbard (spring 2001)). Two benefits of the regulatory system in the U.K. are firstly, that it is based on one almighty regulator that overseas the different factors of the financial services industry (the financial Services Authority). This leads to more streamlined regulations than in other countries that employ functional form regulatory systems.

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SPAIN: Spain has one of the most developed markets in bancassurance (Datamonitor (2003)). Current penetration of bancassurers is over 75% of life insurance business and an ever-increasing proportion of the non-life business. In Spain, the evolution of the bancassurance market is fostered by the phenomenal growth within the insurance services industry (life insurance alone has seen 30% growth per annum over the past 15 years (Durand (2003)). The development of bancassurance in the Spanish market was facilitated by the well-established network of regional building societies, and also the cultural mentality that it is correct to take on risks (Goddard (1999)). BRAZIL: In Brazil the laws are in the bancassurers favor, and the banks within the country control more than 65% of the insurance market (Nigh and Saunders (2003)), a size that rivals the leading bancassurers in Europe. Furthermore, in Brazil, bancassurers are assisted by regulations that ban the development of agent networks (Benoist (2002)). NORTH AMERICA: The North American financial services market is the largest in the world and bancassurance has developed in a differing manner in this region depending on the country in question. In Canada, there has been consolidated regulation for more than 15 years and banks are legally allowed to own insurance companies, but limitations are placed on the products that can be provided (Dorval (2002)). While in Mexico, bancassurance has been a flourishing industry due largely to the role played by banks in the creation of pension funds since the 1997 pension reforms. Bancassurance in the U.S. has, in contrast, faced a very tight regulatory and legislative environment for many decades. The formation of financial conglomerates was greatly hindered by the Banking Act of 1933 (Glass-Stegall Act) and the Bank Holding Company Act of 1956. Only in 1999 did laws become more favorable to banks offering insurance products, with the passing of the Gramm-Leach Bliely Act. However, due to the divergence between the state and federal laws regarding banks offering insurance

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and the financial structure of the operation tends to be in the form of a distributional agreement. with the ever-continuing regulatory changes such as the demutualization of insurance companies coupled with an ageing population. This was largely due to the lack of information that resulted from poor company disclosure statements and inadequate collections of national statistics. it is widely believed that there will be strong growth potentials for bancassurers in a mature market such as the U.products. (2002)). Currently. The following aims at highlighting the 42 .2 Quantitative works of major Researchers related to bancassurance Compared to the vast amount of descriptive work that has been published in the field of bancassurance. with the exception of countries such as Australia. Since bancassurance is still in its infancy in most Asian countries. only around 7% of Americans purchase their insurance products through bank branches (Thomson (summer 2002b)). Vietnam still restricts banks from offering life insurance products. ASIA AND THE PACIFIC: Bancassurance in the Asian region has been relatively slow to take off. it is still in its early stages. Certain countries within the region are still holding out against the onslaught of the bancassurance trend. nevertheless. Hong Kong and Singapore where regulations have been considerable lenient (Swiss Re. The trend in the majority of mainland Asian countries has been for a bank to form ties with a foreign insurer in order to begin bancassurance operations with around 80% of these being life insurers. However. bancassurers still face a hard time ahead in relation to regulations and attempting to overcome powerful lobbies that aim to maintain existing hierarchies (Boot (2003)).S. it is very susceptible to global changes Most countries within Asia have only recently begun allowing the formation of bancassurance operations with the main players listed below. researchers into the bancassurance practice are making more and more empirical research. while South Korea has made certain rules that make it difficult to begin a bancassurance operation within the country 2. As these problems are being rectified. there is only a limited amount of empirical studies conducted on the effects that bancassurance actually has on the company once implemented.

Boyd. Their main finding was that the risk of bankruptcy only declined should the BHC expand into the life insurance practice. Saunders and Walter (1994) and Lown. They conducted a riskof-failure analysis and looked at two periods around a new Federal Reserve policy (1974s go-slow policy). Boyd and Graham (1988) followed their 1986 study with a paper that used a simulation approach. they found that bank holding companies (BHCs) involvement in non-banking activities is significantly positively correlated with the risk of failure over the period 1971-1977. Estrella (2001) examines diversification benefits for banks by using proforma mergers. (1988) by conducting a simulation study. whereby they simulated possible mergers between banking and non-banking companies which were then compared to existing BHCs in order to determine whether the risk of bankruptcy will increase of decrease should expansion be allowed in to the non-banking industry. and also to determine the concurrent effect on company profitability. Strahan and Sufi (2000) use a similar method to Boyd and Graham (1988) and obtain similar results with more current data. The majority of past studies have focused mainly on the risk and profitability effects resulting from the union of a banking and non-banking firm. In contrast to previous studies that incorporate accounting data. the findings indicate that banking and insurance companies are likely to experience gains on both sides in the majority of the cases. Brewers (1989) study finds similar risk reduction benefits existing however cannot specify whether they originate as a result of diversification. Estrella uses market data and a measure of the likelihood of failure that is derived through the application of option pricing theory to the valuation of the firm. whereas those with securities or real-estate firms will not. thus indicating that the new policy had a considerable impact on bank holding company (BHC) expansion into non-banking activities. Osler. They once again conclude that mergers of BHCs with insurance companies may reduce risk. while the period 1978-1983 showed no significance.major quantitative findings of certain researchers that have performed research into the union of banks and insurers. regulation or efficiency gains. 43 . One of the earliest studies in this area was performed by Boyd and Graham (1986). Graham and Hewitt (1993) build on Boyd et al.

S. riskier BHCs with fee-based income gain the most. Carow (Mar 2001) found in support the contestable market theory that insurance companies became worse off and banks had no long-term gains following legislations further supporting bancassurance within the U. they found that country effects do not significantly affect their overall results. Fraser and Kolari (2005) find that bancassurance mergers are positive wealth creating events by examining abnormal return data. and that there is no clear evidence supporting cost reductions stemming from improvements in managerial efficiencies. 44 . Amel. They further deduced that scale and scope economies were a contributing factor in these results. As always. Cybo-Ottone and Murgia (2000) analyzed the stock market valuations of mergers and acquisitions in the European banking industry over the period 1988-1997.Cowan. and discovered that investors expect large banks and insurance companies to gain significantly from the legislation removing barriers to bancassurance. riskier insurers sustain the highest wealth losses. Howell and Power (2002) conducted a similar event study surrounding four separate court rulings and discovered that on average only larger. Furthermore. Barnes. and found the existence of significant positive abnormal returns associated with the announcement of product diversification of banks into insurance. the majority of the past studies have found risk reduction and wealth creating benefits associated with the expansion of banks into the insurance industry. while smaller.The other major series of studies on banks expansion into non-banking activities focus on the wealth effects of such a move. But. the opponents are there. Strioh (2004) finds non-banking income volatile and that there is little evidence of diversification benefits existing. Fields. In an event study released later in the same year. Panetta and Salleo (2004) and Strioh (2004) found that consolidation in the financial sector is beneficial up to a relatively small size in order to reap economies of sale. Carow (2001) looked at the abnormal returns of bank and insurance companies following the changing legislation brought about as a result of the Citicorp-Travelers Group merger. suggesting a homogeneous stock market valuation and institutional framework across Europe.

A total of 25 banks covering PSU. Graham Morris. and part of an Asia-wide analysis focused on bancassurance distribution. and Foreign banks had participated in the Survey. life insurers and non-life insurers separately in the report. processes and productivity indicators. Private. The lack of a clear bancassurance vision on the part of the bank partner is the most visible reason for the slow progress in cross selling of insurance. despite the bank partners having impressive branch networks or large customer bases. a leading global insurance consulting firm. 45 .Article 2. It sets out to define bancassurance performance standards and benchmarks against a cross section of industry practices. Mr.3 Title: INSURERS UPBEAT ON BANCASSURANCE CHANNEL Bancassurance is likely to generate approximately 35% of private insurers’ premium income by 2008.2006/7’ is the first of its kind survey in the Indian market. despite the fact that they consider lack of sales culture on the part of bank’s branch staff as a key issue in the success of bancassurance. Watson Wyatt has analyzed the bancassurance channel from the perspective of banks. Nearly 90% of interviewed life insurers are expecting an increase of over 75% in new business premium income for the current financial year from the bancassurance channel. along with almost all private life and general insurers licensed in the country. ‘India Bancassurance Benchmarking Study. Director. Watson Wyatt Worldwide said: “the purpose of the survey was to focus and understand how banks and insurers develop strategies for selling life and non-life insurance products through the vast network of bank branches in India and the practical issues they face in implementing the sales process”. according to an analysis of India’s bancassurance sector by Watson Wyatt Worldwide. Watson Wyatt had chosen India as the first country in Asia to do the Benchmarking Survey considering the vibrant growth of this alternative channel in the country compared to the other Asian markets.

Life insurers have also expressed overwhelming support to innovative changes in the bancassurance channel. rural insurance business would constitute between 16-20% of their total bancassurance new business premium. “Growth in bancassurance in India will fall short of its potential unless the perceived lack of sales culture and vision begin to get addressed by the banks. The brand image of the bank partner. they seem to demand more attention from insurers to involve the bank management team. Distribution Practice. While developing their bancassurance strategy. exclusive 46 . its willingness to bring about a cultural change and involving the entire branch network are the vital factors that life insurers consider when entering into a bancassurance tie-up. 100% of respondents ranked gaining support and commitment from the bank’s management as the critical factor in building successful bancassurance operations. Watson Wyatt Insurance Consulting of the India office. About 30% of the life insurers have indicated that by the year 2010. general insurers consider increasing new business and tapping new markets as the key factors.” said Mr. On product design and development. Public sector banks in the country. Banks’ have overwhelmingly expressed a leaning towards insurers with bancassurance expertise and showing evidence of their commitment.The quality of bank customer data is frequently poor and the absence of simple CRM tools in most banks makes it difficult to launch specific initiatives to cross sell insurance products. such as banks having multiple insurer relationships. An understanding of theses differences will facilitate the mutual goal of increasing bancassurance as the leading channel in insurance distribution in India. are seem to be inefficient in recording basic data about customers and managing available information. Managing Director. which control more than 90% of the total customers. R.Krishnamurthy. Both bankers and insurers are bullish about the future outlook of bancassurance with nearly a quarter of respondents predicting that the overall share of bancassurance would be about 50% or more in the life segment in the year 2010.

There is no doubt that bancassurance in India will play a major role as the insurance sector develops. the insurance selling opportunities would get widely tapped at bank branches in the years ahead.bancassurance products for deepening insurance penetration and simpler training requirements for the bank staff to qualify as insurance salespersons. Coupled with the growing awareness of banks to leverage on their branch network and customer strengths. 47 . India has the unique experience of drawing strong regulatory support for this channel.

collecting. and at last care fully testing the conclusions to determine whether they fit the formulating hypothesis. is exploratory and analytical in nature. To determine the frequency with which something occurs or with which it is associated with something else To test a hypothesis of a casual relationship between variables To gain familiarity with a phenomenon or to achieve new insights into it. The main aim of the research is to find out the truth which is hidden and which has not been discovered as yet. making deduction and reaching conclusion. group 3. OBJECTIVES OF RESEARCH: 1. The research design adopted in this study for secondary data. Exploratory research aims to gain familiarity and new insights into any phenomenon while analytical research aims at analyzing the current scenario and thereby using that to project the future 48 .3. 4. 2. To portray accurately the characteristics of a particular individual. It is a blue print specifying every stage of action in the course of research. situation or RESEARCH DESIGN: Research design is the arrangement of conditions for collection and analysis of data in manner that aims to combine relevance to the research purpose with economy in procedure of data. organizing and evaluating data. formulating hypothesis or suggested solutions.0 RESEARCH METHODOLOGY INTRODUCTION: Research is an academic activity and as such the term should be used in technical sense. According to Clifford Woody research comprises defining and redefining problems.

RESEARCH METHODLOGY performance. 49 . as it exists at present. the area selected for the study was kilpauk. The main objective of such studies is to acquire knowledge. It is concerned with the research studies with a focus on the portrayal of the characteristics of a group or individual or a situation. The total sample size was taken to be 100. The researcher may make use of any convenient base to select the required number of samples. Here Convenience sampling technique has been used. SAMPLING DESIGN: A sampling design is a definite plan for obtaining a sample given population. There are different methods of sampling. The major purpose of Descriptive research is description of the state of affairs. SAMPLE SIZE: Sample size refers to the number of items to be selected for the universe to constitute a sample. SAMPLING: Sampling may be defined as a selection of some part of an aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made.Accordingly. This research aims at studying the historical performance of the company in bancassurance and it also evaluates the future prospects of the company Descriptive research design is used for collecting primary data. chennai. CONVENIENCE SAMPLING: This method of sampling involves selecting the sample elements using some convenient method without going through the rigor of sampling method.

SECONDARY DATA: It refers to the information or facts already collected. This has been used to collect the data for the purpose of this study. A questionnaire is a form prepared and distributed to secure responses to certain questions.RESEARCH METHODLOGY METHODS OF DATA COLLECTION: NATURE OF DATA: There are two types of data namely primary and secondary data. PRIMARY DATA: Primary data is the data collected for the first time through field survey. to decide whether it is comprehensive or not. METHOD OF PRIMARY DATA COLLECTION The method followed in obtaining the primary data was through the structured questionnaire. secondary data has been used for making a financial analysis.. Such data are collected with the objective of understanding the past status of any variable. As such. Here a well-structured questionnaire has been prepared with all the important details regarding bancassurance. Here. addition and deletion of questions etc. 50 . pilot study has been done. It has both open ended and close-ended questions. it is used with a few (10) respondents Their responses are studied and it has been helpful in changing the questionnaire like giving more instructions to the respondents for filling up. re-sequencing the questions. The researcher had used a Questionnaire for obtaining the primary data for analysis. PILOT STUDY: Before a questionnaire is finalized it should be field-tested. That is after the questionnaire was drafted.

15.18.. has been collected from journals & magazines as well as Internet. And the data pertinent to bancassurance like articles. RATING SCALES: Summated rating scale: In this method. the attitude of people is classified into specific points with approximately equal attitude value. TOOLS USED: As the research contains both primary and secondary data it includes both financial statement analysis and statistical analysis. Based on the response of all the questions.RESEARCH METHODLOGY METHOD OF SECONDARY DATA COLLECTION: Annual reports Journals and Magazines Internet Annual reports of AXIS bank have been used for making an analysis on the financial performance of AXIS bank in bancassurance. compare and evaluate the firm’s earnings ability. 1. etc. The respondents to questions indicate the degree of agreement or disagreement through their response. analysis and decision-making is the financial information. They are useful only when they are analyzed and interpreted. the attitude of the respondents is determined. 51 . financial statements like annual reports of AXIS bank from the year 2003-2006 has been used for making an analysis on the financial performance of AXIS bank in bancassurance and its contribution to the overall progress of the bank.21. previous researches.17. In this research. This scale has been used for the following question no: 10. FINANCIAL STATEMENT ANALYSIS: Financial statements refer to the    formal and original statements prepared by a business concern to disclose its financial information. The basis for financial planning. Financial information is needed to predict.

RATIO ANALYSIS: An analysis of financial statements based on  ratios is known as ratio analysis.RESEARCH METHODLOGY Ratio analysis. Hence. Some of the ratios used in this study are: Non-interest income as a percentage of total revenue: Non interest  income is the revenue earned by the bank apart from the interest income.It can be find out by using the formula: Non-interest income Operating profit  Non-interest income as a percentage of working funds: This would indicate the percentage of non-interest income contribution to the working funds. calculation of this ratio would reveal the contribution of non-interest income to the total revenue of the bank. With the help of this. one of the most important techniques of financial statement analysis has been used in this research. the ROA ratio reveals how much income management has been able to squeeze from each rupee’s worth of a company's assets 52 . A comparison of net income and average total assets. Ratio analysis is the process of computing. It can be find out by using the formula: Non-interest income Total revenue  Non-interest income as a percentage of operating profit: This would reveal the percentage of non-interest income contribution to the operating profit. Some of the ratios used in this research are: Business ratios: They are used for comparing changes in the business from period to period. determining and presenting the relationship of items. It can be calculated by using the formula: Non-interest income Working funds  Return On Assets (Average): This ratio is calculated to measure the productivity of assets. one can pinpoint improvements in performance or developing business areas.

It is also called as Capital to Risk Weighted Assets Ratio (CRAR) . This is calculated based on the average employee numbers. This is also calculated based on the average employee  Percentage of net non-performing assets to customer assets: This is used to find out the percentage of net non-performing assets to customer assets.RESEARCH METHODLOGY Return On Assets (Average) = Net Income Average total assets  Business per employee: This is used to find out the productivity of the employees.. a bank's capital is the "cushion" for potential losses. This can be obtained by using the formula: Net Non Performing Assets Gross advances Capital Adequacy Ratio: Capital adequacy ratios are a measure of the amount of a bank's capital expressed as a percentage of its risk weighted credit exposures. And business is the total of net advances and deposits. operational risk. (Net of inter bank deposits) Business per employee = Total of net advances and deposits Average employee numbers Profit per employee: This is also used to find out the productivity of  numbers. the employees in terms of profit. which protect the bank's depositors or other lenders. In the most simple formulation. Capital Adequacy Ratio = Total capital funds 53 .It determines the capacity of the bank in terms of meeting the time liabilities and other risk such as credit risk. etc. This can be obtained by using the formula: Net Non Performing Assets Customer Assets  Percentage of net non-performing assets to gross advances: This is used to find out the percentage of net NPA’s to gross advances.

if increase (or decrease in one results in corresponding decrease (or increase) in the other.(∑x/n) (∑y/n) Correlation coefficient = …………………………………….E) 2 54 .E) 2 E Where Oi = observed frequency Ei = Expected frequency For more accuracy.e. Yates correction is used and the formula used is given below: Ψ² = (O .RESEARCH METHODLOGY Risk weighted assets and contingents STATISTICAL TOOLS USED: This constitutes an integral part of research analysis. ∑xy/n . if the increase (or decrease) in one results in a corresponding increase (or decrease) in the other. The statistical tools applied in this research are:    Correlation co-efficient Chi-square test Percentage analysis. the variables are said to be correlated. But if they constantly deviate in opposite directions i. √∑x²/n-(∑x/n)² √∑y²/n-(∑y/n)² CHI-SQUARE TEST: When certain observed values of a variable are to be compared with the expected value the test static.. CORRELATION COEFFICIENT In a bivariate study distribution we may be interested to find out if there is any correlation or co-variance between the two variables under study. If the two variables deviate in the same direction i. Hence any analysis of data compiled should be subjected to relevant analysis so that meaningful conclusions could be arrived at. If the change in one variable affects a change in the other variable. correlation is said to be direct or positive.e. correlation is said to be negative.. Ψ² = (O .

RESEARCH METHODLOGY E Power of association test: When the calculated value in the test is greater than the tabulated value. since the percentage reduces everything to a common base and thereby to allow meaningful comparison to be made. PERCENTAGE ANALYSIS: These are the measures of central tendency. where N = sample size. the distribution of 2 or more series of data. Of respondents * 100 Total No. power of association test is applied in order to show the strength of association. Of respondents 55 . In this case. we accept the alternative hypothesis Hi. It can be used to compare the relative terms. Based on the power of Association Test. the value indicates the fair relationship between the variable. Percentage Analysis = No. It is used to describe relationships.

using ratio analysis. TABLE 4.1.1. TABLE 4.1 Secondary data analysis: Secondary data analysis.14 16.1 AXIS BANK’S EARNINGS FOR THE SALE OF BAJAJ ALLIANZ LIFE INSURANCE POLICIES FROM 2005-2008 Year Revenue earned for the sale insurance policies CHART 4.99 INFERENCE: From the above. the imperative part of this study has been undertaken to analyse the performance of AXIS bank in bancassurance so far and the contribution of bancassurance to the progress of the bank in the form of increase in ROA.09 lacs 112. it can be seen that there has been an impressive growth in the revenue over the years for the sale of Bajaj Allianz life insurance policies by AXIS bank.14 lacs 2007. Since AXIS bank has started earning revenue for the sale of insurance policies from 2005 that the analysis includes from the year 2005-2008.0 DATAANALYSIS AND INTERPRETATION 4.1 Revenue earned for the sale of insurance policies 120 100 80 60 40 20 0 2004-05 2005-06 2006-07 Revenue (in lacs) 2005 –06 16. revenue etc.DATA ANALYSIS AND INTERPRETATION 4.08 112.99 lacs of 2006 -07 88.2 RETAIL SEGMENT PROFIT FROM THE YEAR 2007 TO 2008: 56 .1.09 88..

One of the reasons being the bank’s dealing with the sale of insurance policies to its retail customers. Year Profit earned by the retail segment of AXIS bank 2005-06 520.64 lacs 2006-07 701. TABLE 4.71 lacs CHART 4.67 lacs 2007-08 875.2: INFERENCE: From the above. it can be observed that there has been a phenomenal increase in the profit of retail segment from 2005-2008. Thus a glimpse at its profit would be imperative.3 RETAIL SEGMENT ASSETS FROM THE YEAR 2005 TO 2008: Retail segment asset can also be increased by way of bancassurance operation. 57 .1.1. It has been mentioned even in the director report of AXIS bank.DATA ANALYSIS AND INTERPRETATION Retail banking segment is undertaking bancassurance. And it is the fastest growing banking business segment. Let us take a look at its asset position from the year 2005-06 to 2007-08. which symbolizes the bancassurance contribution.

DATA ANALYSIS AND INTERPRETATION

Year Retail assets

2005 –06 24,469,93

2006 -07 38,571,09

2007- 08 50,100,34

CHART 4.1.3

INFERENCE: From the above, we can infer that there has been a phenomenal increase in the growth of retail assets over the years that it indicates the contribution of bancassurance to it. TABLE 4.1.4: OPERATING EXPENSES FROM THE YEAR 2005 TO 2008: Bancassurance will lead to a reduction in the operating expenses of the bank as it can have the opportunity of economies of scale. Thus let us took a look at the operating expenses of AXIS bank from the year 2005-06 to 2007-08. Year Operating expenses 2005 –06 1,085,40 2006 -07 1,691,09 2007- 08 2,420,80

CHART 4.1.4:

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DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the chart, we can observe that there has been an increase in the operating expenses of the bank. Since, AXIS bank is only in its infant stage in bancassurance, it can perform more to reduce the same in the long run.

TABLE 4.1.5: NON-INTEREST INCOME AS A PERCENTAGE OF TOTAL REVENUE: As bancassurance revenue leads to an increase in the non-interest income, the non-interest income as a % of total revenue from the year 2005-2007 is as follows: Year Non 2005-06 interest651,34 2006-07 1,123,98 5,599,32 20.07 2007-08 1,516,23 8,405,25 18.03

income Total revenue 3,744,83 Ratio 17.39

Chart 4.1.5:

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DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the above, it can be observed that non-interest income as a% of total revenue though increased in the year 2005,it has been decreased in the year 2006. TABLE 4.1.6: NON-INTEREST INCOME AS A % OF OPERATING PROFIT: Non-interest income as a contribution to the % of operating profit from the year 2005-2008 is shown as below: Year Non-interest income Operating profit Ratio 2005-06 651,34 1,156,02 56.34% 2006-07 1,123,98 1,733,84 64.82% 2007-08 1,516,23 2,562,86 59.16%

Chart 4.1.6:

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7: NON – INTEREST INCOME AS A % OF WORKING FUNDS: Non-interest income as a % of working funds is shown as below: Year 2005-06 Non interest income1.44% as a % of working funds Chart 4. Note: Operating profit = (interest income + other income – interest expense – operating expense –amortization of premia on investments .But it has been decreased in the year 2007-08.79% 1. it can be observed that non-interest income as a% percentage of operating profit has been increasing from 2005 to 2006.profit/(loss) on sale of fixed assets).76% 61 .7: 2006-07 2007-08 1. Business ratios (As per the director’s report of AXIS bank) TABLE 4.DATA ANALYSIS AND INTERPRETATION INFERENCE: From the above.1.1.

8: RETURN ON ASSETS (AVERAGE): The best opportunity for the banks.1.DATA ANALYSIS AND INTERPRETATION INFERENCE: From the chart it can be observed that non-interest income as a% percentage of working funds though increased in the year 2006. which undertakes bancassurance operation is that.8: 62 .47% 2006-07 1. it can increase its return on assets. the return on assets of the bank from 20052008 is as follows: Year Return on (Average) 2005-06 Assets1. TABLE 4. Hence.1.38% 2007-08 1.33% Chart 4.it has been decreased in the year 2008.

it can be observed that the return on assets of the bank has been decreased from the year 2005 – 2008. TABLE 4. BUSINESS PER EMPLOYEE: The business per employee from 2005-2008 is as follows: Year Business Per Employee 2005-06 806 2006-07 758 2007-08 607 Chart 4. it is clear that the business per employee of the bank over the years has been on the decreasing trend.9.DATA ANALYSIS AND INTERPRETATION INFERENCE: From the above. 63 .1.9: INFERENCE: From the above.1.

Hence.80 Chart 4. and the level of Non Performing Assets (NPAs) should be reasonable. The CRAR of the bank should not be less than 10 per cent. RBI guidelines: As per the RBI guidelines for the banks to enter into the insurance sector. Capital adequacy ratio: Capital adequacy ratio from the year 2005-2008 can be shown as follows: (As the total capital includes tier-1 and tier-2.10: 2006-07 7.13 INFERENCE: From the above.39 2007-08 6. analysis of such ratios is also important.DATA ANALYSIS AND INTERPRETATION TABLE 4.) 64 .1. it can be viewed separately.1.10 PROFIT PER EMPLOYEE: Profit per employee from 2005-2008 is as follows: Year 2005-06 Profit per employee 8. it can be observed that profit per employee of the bank over the years has been on the decreasing trend.

investment fluctuation reserve and subordinated debt.081.217.62 2.57% Risk weighted assets and contingents Ratio Where.71 2007-08 3. statutory reserve.55% 74.27.56% 60.DATA ANALYSIS AND INTERPRETATION TABLE 4.339.081.103 2.62 8. if any.92 65 .51% TABLE 4. Tier –1 capital includes paid up capital.11 Year Tier 1 capital Tier 1 capital: 2005-06 3.016.70 Risk weighted assets and contingents 41. From this.60% Tier 2 capital: 2005-06 1.92 8.12 Year Tier 2 capital 41.352. balance in profit and loss account and amalgamation reserve. 41.870.1.1. is deducted.1.081.216 2006-07 5.62 74.149.89 2006-07 6.27.054.692.217.91 2007-08 6.27.720.96.92 4.86% 74.73 2006-07 1.13 Year Total capital Total Capital: 2005-06 5.62 2007-08 9.71 Risk weighted assets and contingents Ratio TABLE 4.103 9.99 60. Tier– 2 capital includes general loan loss reserves. general reserve.103 60.217. outstanding deferred tax asset.

36% 2007-08 0.1.1.1.38% 66 .11: INFERENCE: From the above.12: 2006-07 0.it has been increased in the year 2007-08.DATA ANALYSIS AND INTERPRETATION Ratio 12.41% 13. it can be seen that the capital adequacy ratio though decreased in the year 2006.20% assets to customer assets Chart 4.16% 11.08% Chart 4.14: PERCENTAGE OF NET NON PERFORMING ASSETS TO CUSTOMER ASSETS: The percentage of net non-performing assets to customer assets is shown as below from the year 2005-2008: Year 2005-06 Percentage of net non performing0. TABLE 4.

24% 2006-07 0.15 PERCENTAGE OF NET NON-PERFORMING ASSETS TO NET ADVANCES: The percentage of net non-performing assets to net advances from the year 2005-2008 are shown as follows: Year Percentage performing advances Chart 4.1.43% assets to net 67 . it is clear that the percentage of net non-performing assets to customer assets has been increasing from the year 2005-2008 TABLE 4.1.44% 2007-08 0.DATA ANALYSIS AND INTERPRETATION INFERENCE: From the above.13: of net 2005-06 non0.

69% non assets advances Chart 4.16 PERCENTAGE OF GROSS NON-PERFORMING ASSETS TO GROSS ADVANCES: The percentage of gross non-performing assets to gross advances from the year 2004. TABLE 4. it can be observed that the percentage of gross nonperforming assets to gross advances has been decreasing from the year 2005 –2008.DATA ANALYSIS AND INTERPRETATION INFERENCE: From the above.2006 are shown as follows: Year 2005-06 2006-07 2007-08 Percentage of gross1. it can be observed that the percentage of net nonperforming assets to net advances has been increased from the year 2005 to 2006 and it has been decreased in the year 2008.32% 1.14: performing to gross 1. 68 .32% INFERENCE: From the above.1.1.

4. 24% of the respondents belongs to 30-35 Age limit.2 GENDER: GENDER Male Female TOTAL INFERENCE : From the above table it can be observed that 76% of the respondents are Male and 24% of the respondents are female. Hence the majority of the respondents fall in to the category of 35-40 Age limit. a well-structured questionnaire was framed and the following clearly represents all the related data and their interpretations in a detailed form with statistically proven inferences.2. 26% of the respondents belong to 35-40 Age limit and the remaining 18% of the respondents belongs to above age 40. TABLE 4. 20% of the respondents belongs to 25-30 Age limit. RESPONDENTS OF PERCENTAGE NO. Hence the majority of the respondents are Male. RESPONDENTS OF PERCENTAGE 12 20 24 26 18 100 12 20 24 26 18 100 76 24 100 76 24 100 69 .2 PRIMARY DATA ANALYSIS: Based on the objective. TABLE 4.2.1 AGE FACTOR: AGE LIMIT 20-25 25-30 30-35 35-40 Above 40 TOTAL INFERENCE: From the above table it can be inferred that 12% of the respondents belongs to 20-25 Age limit. NO.

Hence the majority of the respondents are married.2. it can be seen that 28% of the respondents are single and 72% of the respondents are married.2.3 OCCUPATION: OCCUPATION Salaried Businessman Retired Others TOTAL NO.2.TABLE 4. TABLE 4. OF RESPONDENTS PERCENTAGE 49 34 15 2 100 49 34 15 2 100 INFERENCE: From the above table it is observed that 49% of the respondents are salaried.5 70 . 34% of the respondents are involved in business. majority of the respondents are Salaried. NO. Thus. RESPONDENTS OF PERCENTAGE 28 72 100 28 72 100 TABLE 4.4 MARITAL STATUS: MARITAL STATUS Single Married TOTAL INFERENCE: From the above table. and 14% of the respondents retired and a less percentage of 2 have fallen into the category of others includes professionals.

2. which is the major percentage.2.a. TABLE 4. NO.a.6 ANNUAL INCOME: ANNUAL INCOME <2 LAKHS 2-4 LAKHS 4-6 LAKHS Above 6 LAKHS TOTAL INFERENCE: From the above table it can be seen that 22% of the respondents are earning less than 2 lakhs p... OF CHILDREN: NO.7 ACCOUNT HOLDER OF AXIS BANK: ACCOUNT HOLDER OF AXIS BANK Yes No TOTAL NO.. OF RESPONDENTS PERCENTAGE 86 14 100 71 86 14 100 . 43% of the respondents are earning 2-4 lakhs p.a. OF RESPONDENTS PERCENTAGE 22 43 27 8 100 22 43 27 8 100 TABLE 4. OF CHILDREN NO. OF RESPONDENTS PERCENTAGE Yes No N/A TOTAL INFERENCE: 68 4 28 100 68 4 28 100 From the above table it can be seen that 68% of the respondents who have got married are having children and 4% of the respondents are not having so far .NO. 27% of the respondents are earning 4-6 lakhs and the remaining respondents are earning above 6 lakhs p.

OF RESPONDENTS PERCENTAGE 57 11 18 14 100 57 11 18 14 100 INFERENCE: From the above table it can be seen that 57% of the respondents are Saving A/C holders and 11 % of the respondents are Current A/C holders.INFERENCE : From the above table it is found that 86% of the respondents.2. credit card holders and the persons dealing with investments.8 TYPE OF ACCOUNT: TYPE OF ACCOUNT Savings A/C Current A/C Both N/A TOTAL NO.2. are holding Account in AXIS Bank and 14% of the respondents are NonAccount Holders of AXIS bank.9: 72 . And 18% people own both the type of accounts. TABLE 4. TABLE 4. which is a majority. And for 14% of the people this question is not applicable as they are not the account holders of AXIS bank. Non-a/c holders include borrowers.

OF YEARS <1 Yr. OF YEARS ASSOCIATIED WITH AXIS BANK: NO.2.10 PERSONAL VIEWS ABOUT INSURANCE: 73 . 1-3 Yrs 3-5 Yrs 5-7 Yrs > 7 Yrs TOTAL NO.NO. OF RESPONDENTS PERCENTAGE 24 39 33 4 0 100 24 39 33 4 0 100 INFERENCE: From the above. 33% of the respondents are having 3-5 years relationship 4% of the respondents are having greater than 5 but less than 7 years of relationship. it is found that 24% of the respondents are having less than 1 year associability with AXIS Bank where as a major 39% of the customers have 13 years of relationship. TABLE 4. No customer among the respondents is having greater than 7 years relationship with AXIS Bank.

agree to the same.PERSONAL VIEWS ABOUT INSURANCE A) Insurance provides protection to you and your family B) Insurance is an absolute necessity for an individual/family C) Insurance is one of the best Investment options CHART 4. No one Strongly disagreed the view.1 Strongly Agree Agree Neutral Disagree Strongly Disagree Total 32 37 19 12 0 100 10 30 38 19 3 100 9 20 42 21 8 100 PERSONAL VIEWS No.2. But 19% of the respondents remained Neutral and 12% disagree the same.of respondents(in %) 100 80 60 40 20 0 A B C PERSONAL VIEWS ABOUT INSURANCE Strongly Agree Agree Neutral Disagree Strongly Disagree INFERENCE: From the above. it can be observed that (A) 32% of the respondents Strongly agree that Insurance provides protection to their family and 37%. which is a majority. 74 .

remained neutral whereas 21% disagreed the point. OF RESPONDENTS PERCENTAGE 47 53 100 47 53 100 CHART 4.(B) 10% of the respondents Strongly agree that Insurance is an absolute necessity for an Individual/family and 30% agree to this. TABLE 4. (C) 9% of the respondents Strongly agree that Insurance is one of the best investment options and 20% agree to this. 38% stayed Neutral and 19% of the respondents disagreed the view. 42%. Also 8% of the respondents Strongly disagreed.11 LIFE INSURANCE POLICY HOLDER LIFE INSURANCE POLICY HOLDER Yes No TOTAL NO. that is a majority. A less percentage of 3 strongly disagreed the view.2.2: 75 .2.

2.LIFE INSURANCE POLICY HOLDER 53% 47% YES NO INFERENCE: From the above. OF RESPONDENTS PERCENTAGE 72 28 100 72 28 100 CHART 4. TABLE 4. it can be noticed that 47% of the respondents are holding a Life Insurance policy currently and the big rest 53% are not holding any Life Insurance policy.12 AWARENESS ABOUT BAJAJ ALLIANZ LIFE INSURANCE AWARE OF ALLIANZ INSURANCE Yes No TOTAL BAJAJ LIFE NO.3 76 .2.

it can be observed that a vital part of the respondents. TABLE 4.2.2. of respondents 28 44 0 0 28 100 Percentage 39 61 Nil Nil 28 100 77 .13 SOURCE TO KNOW ABOUT AXIS LIFE INSURANCE SOURCE AXIS Bank Advertisement Friends & Relatives Others N/A Total CHART 4. which is 72% are aware about AXIS Life insurance and 28% do not have the same.INFERENCE: From the above table.4: No.

TABLE 4. RESPONDENTS OF PERCENTAGE 48 52 100 48 52 100 78 . which is conveyed by 61% of the respondents. Whereas AXIS Bank owns 39%.INFERENCE: From the above we can understand that the major Source to Know about AXIS Life Insurance is Advertisement.2.14 AWARE OF BANKS CROSS-SELL INSURANCE PRODUCTS (in %) AWARE OF BANKS CROSS-SELL INSURANCE PRODUCTS Yes No TOTAL NO.

15 ADVANTAGES IN BUYING THE INSURANCE POLICIES THROUGH BANKS ADVANTAGES Strongly Agree Agre e Neutral Disagree Strongly Disagree Total 79 .2.5 AWARE OF BANKS CROSS SELLING INSURANCE PRODUCTS YES 52% 48% NO INFERENCE: From the above. it can be noticed that 48% of the respondents are aware of Banks cross-selling Insurance products but 52% of the respondents which is a majority are not aware of the same.2. TABLE 4.CHART 4.

35% remains neutral. Only 8% disagree and 4% strongly disagree to this view.2. C) 12% of the respondents strongly agree and 41% agree with the advantage of easy accessibility. 7% of the respondents strongly disagree and disagree respectively.16 80 . Thus. of Respondents (in %) 100 80 60 40 20 0 A B C Strongly Agree Agree Neutral Disagree Strongly Disagree INFERENCE: From the above. majority of the respondents agree with the advantages in buying the insurance policies through banks. B) 20% of the respondents felt convenience in buying insurance policies through banks and they strongly agree to that.2.A) Expert advice B) Convenience C) Easy accessibility CHART 4. Also 44% agree the same.6: 17 20 12 28 44 41 26 24 35 22 12 8 7 0 4 100 100 100 ADVANTAGE IN BUYING INSURANCE POLICIES THROUGH BANKS No. TABLE 4. 26% of the respondents remained neutral and 22%. A) 17% of the respondents strongly agree with the advantage of expert advice in buying through banks and the same is agreed by 28 %. it can be observed that. But 24% stayed neutral whereas 12% disagreed this point. No one strongly disagreed the same.

2. which is a majority. of respondents Percentage Strongly Agree Agree Neutral 11 26 14 81 11 26 14 .AWARE OF OBTAINING BAJAJ ALLIANZ LIFE POLICY FROM AXIS BANK AWARE OF OBTAINING POLICY FROM AXIS BANK Yes No TOTAL NO. RESPONDENTS 46 54 OF PERCENTAGE 46 54 100 100 CHART 4. But 54% of the respondents.17 FAMILIARITY WITH THE POLICIES OFFERED BY BAJAJ ALLIANZ LIFE INSURANCE FAMILIAR WIH THE TYPES OF POLICIES OFFERED BY BAJAJ ALLIANZ LIFE INSURANCE No.7 INFERENCE: From the above. don’t know the same.2. it can be noticed that 46% of the respondents know well that Bajaj Allianz life insurance policy can be bought from AXIS bank branches. TABLE 4.

2.8 INFERENCE: From the above. majority of the respondents are not familiar with the different types of policies offered by Bajaj Allianz Life Insurance. TABLE 4. Whereas 14% remained neutral. Thus.Disagree Strongly Disagree Total 37 12 100 37 12 100 CHART 4. 37% disagreed and 12% of the respondents strongly disagreed the view.18 INITIATIVES TAKEN BY AXIS BANK TO PROMOTE BAJAJ ALLAINZ LIFE INSURANCE PRODUCTS INITIATIVES TAKEN BY BANK AXIS Strongly Agree Agree Neutra l Disagree Strongly Disagree Total 82 .2. it can be seen that 11% of the respondents are familiar with the different types of policies offered by Bajaj Allianz Life insurance which they have strongly agree and 26% agree to it.

regarding Bajaj Allianz Life Insurance in AXIS Bank Web Site AXIS Bank Employees have explained you about the policies of Bajaj Allianz life insurance (through phone calls/direct contact) 12 22 18 33 15 100 10 22 13 34 21 100 14 27 12 35 12 100 CHART 4. Also 22% support them by agreeing to it.9: INFERENCE: From the above..2. 83 . 18% remain unbiased and 33% disagree the statement. it can be observed that (a) 12% of the respondents strongly agree that they have noticed the displays of Bajaj Allianz life Insurance in AXIS Bank. And 15% of the respondents have strongly disagreed the same.You have often noticed the displays regarding Bajaj Allianz Life Insurance in AXIS Bank You have come across advertisements/links etc.

10: 84 . 22% agree to this point and 13% replied neutral. TABLE 4. But 34% disagree to this and 21% strongly disagree the same.2. 12% of the respondents didn’t take either side.2.(b) 10% of the respondents strongly agree that they have come across the links/ads concerning Bajaj Allianz life insurance in the web site of AXIS Bank. (c) 14% of the respondents strongly agree that the Employees of AXIS bank has explained them about Bajaj Allianz life insurance products.19 SATISFACTION OF CUSTOMER SERVICES CUSTOMER SERIVICE Highly Satisfied Satisfied Moderately satisfied Dissatisfied Highly dissatisfied Total No. And the same has been agreed by 27% of the respondents. of respondents 13 43 28 13 3 100 Percentage 13 43 28 13 3 100 CHART 4. Whereas 35% disagree the statement and 12% of the respondent’s have strongly disagreed.

Overall.S ATIS FACTION OF CUS TOMER S ERVICES 13% 3% 13% Highly S atisfied S atisfied Moderately satisfied 28% 43% Dissatisfied Highly dissatisfied INFERENCE: From the above. most of the respondents are satisfied with the customer services. it can be observed that 13% of the respondents replied that they are highly satisfied with the customer service provided by AXIS bank. And good percentage of 43 answered that they are satisfied with the customer service.2. 28% of the respondents say that they are moderately satisfied but 18% declared that they are dissatisfied with the customer service.20 FACTORS THAT BUILD A STRONG RELATIONSHIP WITH CUSTOMERS RELATIONSHIP BUILDING FACTORS Strongly Agree Agree Neutral Disagree Strongly Disagree 2 4 3 3 Total Reliability 37 Easy and advantageous 15 banking over other banks Wide range of 13 Products and Schemes Better understanding 15 of customer needs and provide expert advice CHART 4. Also. A less number of 3% also claim that they are highly dissatisfied with the same. TABLE 4.2.11: 42 21 24 23 12 24 32 33 7 36 28 26 100 100 100 100 85 .

12% stayed neutral. 24% stayed neutral.2.7% of the respondents have disagreed and 2% strongly disagreed to it. (b) 15% of the respondents strongly agree to the fact that there exists an easy and advantageous banking over other banks. TABLE 4.28% of the respondents disagreed this view and a less percentage of 3 also strongly disagree to this. (c) 13% of the respondents strongly agree to the factor of wide range of products and schemes. A typical 36% of the respondents disagree the view and 4% strongly disagree the same. (d) 15% of the respondents strongly agree to the factor of better understanding of customer needs and Expert advice and 22% agree to the view.33% stayed neutral.RELATIONSHIP BUILDING FACTORS 100 80 Strongly Agree Agree Neutral Disagree A B C D No of 60 respondents 40 (in %) 20 0 Factors Strongly Disagree INFERENCE: From the above. it can be observed that (a) 37% of the respondents strongly agree with the Reliability factor. The same is also agreed by 24%. Also 42% of the respondents agree to it. Also 21% of the respondents agreed the same.21 AXIS BANK AS A ONE-SHOP STOP FOR ALL FINANCIAL NEEDS 86 . 32% of the respondents remained neutral. Whereas 26% of the respondents have disagreed and 34% have strongly disagreed.

TABLE: 4.2.AXIS Bank as a one stop Shop Strongly Agree Agree Neutral Disagree Strongly Disagree Total CHART 4. 22% of the respondents replied that they agreed and 36% of the respondents.12 No.22 PLAN TO TAKE ANY LIFE INSURANCE POLICY IN THE NEAR FUTURE PLANNING TO TAKE ANY NO. remain neutral about this. which is a majority. And 8% have strongly disagreed to it. OF PERCENTAGE LIFE INSURANCE POLICY RESPONDENTS Yes 42 42 No 58 58 TOTAL CHART 4.2.2. But 22%have denied the same.13 100 100 87 . it can be seen that 12% of the respondents strongly agree that they will prefer AXIS Bank as a one-stop shop for all their financial needs. of respondents 12 22 36 22 8 100 Percentage 12 22 36 22 8 100 INFERENCE: From the above.

have no such idea. which is a majority.14 88 .2. TABLE: 4.2.23 REASONS FOR TAKING A LIFE INSURANCE POLICY IN THE NEAR FUTURE REASONS TAKING A INSURANCE POLICY FOR LIFE Highly Essential Essential 4 5 3 4 8 3 Least Essential 10 12 11 Not Essential 13 8 12 Post retirement income Invest in child’s dreams Give Protection and safety to the family in case of unfortunate occurrences Tax Benefits Better returns in terms of investment Not Essential At All 11 9 13 N/A Total 58 58 58 100 100 100 19 11 11 16 3 6 6 3 3 6 58 58 100 100 CHART 4.FUTURE PLAN TO TAKE ANY LIFE INSURANC E PO LIC Y 42% 58% YES NO INFERENCE: From the above table it can be observed that 42% of the respondents have a plan to take a life insurance policy in the near future but 58% of the respondents.

e. The reason for taking the policy to protect the family in case of unexpected occurrences has been ranked as Not Essential at all by 13 respondents.2.24 CHOOSING BAJAJ ALLIANZ LIFE INSURANCE TO TAKE A POLICY IN FUTURE CHOOSING ALLIANZ INSURANCE Yes No Total CHART 4.e. And 16 respondents i..e. 28% ranked Invest in Child dreams as Least Essential. 31%.e. it can be observed that. of respondents LIFE 47 53 100 NOT ESSENTIAL AT ALL Percentage 47 53 100 INFERENCE: From the above table it can be seen that 47% of the respondents replied that their choice will be Bajaj Allianz Life Insurance and 53% denied the same. 12 respondents i.e. 45% ranked Tax Benefits as a Highly Essential one for taking a policy in the near future. 31% ranked Post retirement income as Not Essential.No. 19 respondents i. Note that 58 89 .15 BAJAJ No.. 38% ranked Better returns as an essential one.i..of respondents(in %) 100 80 60 40 20 0 REAS ONS FOR TAKING A LIFE INS URANCE POLICY HIGHLY ESSENTIAL ESSENTIAL LEAST ESSENTIAL NOT ESSENTIAL A B C D E REASO NS IN FERENCE: From the above. out of 42 respondents.2.. TABLE: 4.13 respondents i..

it can be inferred that a majority of the respondents i. STATISTICAL ANALYSIS 90 .. RESPONDENTS 40 7 0 53 100 OF PERCENTAGE 40 7 0 53 100 INFERENCE: From the above.respondents who are not having the idea of taking any life insurance policy in the near future have been told to assume if they take a life insurance policy in distant future to respond to this question.25 CHANNEL TO OBTAIN BAJAJ ALLIANZ LIFE INSURANCE POLICY CHANNEL TO OBTAIN BAJAJ ALLIANZ LIFE INSURANCE AXIS Bank Financial Consultants /Agents Others N/A Total CHART 4.2.e. TABLE: 4. 40 are willing to obtain Bajaj Allianz Life Insurance policy from AXIS bank itself.16 NO. And 7 respondents want to buy from financial consultants/Agents.2. And for the remaining 53% of the respondents this question is not applicable.

4979 91 . Agree = 26.18 a) Strongly Agree =12.Neutral =14.7969 √11.Disagree =37.17) √11. Co-efficient of correlation: Correlation is used to find out if there is any correlation or co-variance between the two variables under the study.In this section the researcher has used statistical tools in order to analytically prove the study that has been undertaken.0489 = 11.Neutral =18. Agree = 22.33-9.2653 = 1.42 – 9. The tests had been used on selected question as they prove in-depth significance of the research brought out.(∑x/n) (∑y/n) ___________ ____________ √∑x²/n.2381*1.Disagree =33.17 Familiarity of the different types of Bajaj Allianz life policies (X) Q.Strongly Disagree=15.9221 1. Q. It has been used here to analyze the relationship between familiarity among the customers about different types of Bajaj Allianz life insurance policies and the various initiatives taken by AXIS bank to promote Bajaj Allianz life products.65– 10.17 Strongly Agree =11.13) (3. Q.42 – (3. ∑X = 313 ∑ x2 = 1133 ∑y = 317 ∑y2 = 1165 ∑xy = 1142 n(Sample Size) =100 Where Correlation Co-efficient (r) = ∑xy/n .Strongly Disagree=12.(∑x/n)√∑y²/n-(∑y/n)² r = 11.18 a) Frequent Notice of displays regarding Bajaj Allianz life products inside AXIS bank(Y) Q.

18 b) Strongly Agree =10.3% INFERENCE: Hence it can be inferred from the above that there is a very strong relationship (96. Q.18 b) Come across Bajaj Allianz life insurance most of the times in AXIS bank website.10.33-9.1. Agree = 22.5554 = r 0.17 Familiarity of the different types of Bajaj Allianz life policies (X) Q.2381*1.2978 1.Neutral =13.6068 = 92 . Disagree =37.34) √11.17 Strongly Agree =11.Strongly Disagree=21 ∑X = 313 ∑ x2= 1133 ∑y = 334 ∑y2= 1284 ∑xy = 1178 n =100 Where Correlation Co-efficient (r) = ∑xy/n . Neutral =14.(Y) Q. Q.78 .4542 1.34 = 11. Disagree =34. Agree = 26.78 – (3.3%) between the familiarity of different types of Bajaj Allianz Life policies and the frequent notice of displays regarding the Bajaj Allianz Life policies inside AXIS bank.(∑x/n)² √∑y²/n-(∑y/n)² r – 11.(∑x/n) (∑y/n) ___________ ____________ √∑x²/n.3258 1.1556 = 11. Strongly Disagree=12.13) (3.963 : 96.7969 √12.

Disagree =35.2416 10.(∑x/n) (∑y/n) ___________ .Disagree =37. Q.868 93 ∑xy/n .825 : 82.5942 = 0.5%) of correlation between the familiarity of different types of Bajaj Allianz life policies among customers and come across Bajaj Allianz life products in AXIS bank website.Neutral =14.9.9 – 9.9 – (3.(∑x/n)² √∑y²/n-(∑y/n)² r = = 10.04) √11.= r 0.9.3848 1.33-9.17 Strongly Agree =11.238 * 1. Agree = 27.Neutral =12.17 Familiarity of the different types of Bajaj Allianz life policies (X) Q.Strongly Disagree=12 ∑X = 313 ∑ x2= 1133 ∑y = 304 ∑y2= 1090 ∑xy = 1090 n =100 Where Correlation Co-efficient (r) = ____________ √∑x²/n.7969 √10.2877 = 1. Agree = 26.5% INFERENCE: Thus it can be observed that there is a strong (82.5152 1.Strongly Disagree=12.13) (3. Q.18 c)Strongly Agree =14.18 c)Explanation of Bajaj Allianz life policies by AXIS bank employees through phone calls/direct contact (Y) Q.

11067 * 0.Strongly Disagree=2 ∑X = 308 ∑ x2= 1072 ∑y = 405 ∑y2= 1735 ∑xy = 1323 n =100 Where Correlation Co-efficient (r) ____________ √∑x²/n.r : 86.23 – 12.756 1.08) (4. Agree = 42.05) √10. 2.23 – (3.082 0.9% = ∑xy/n .40 13.699% 69.474 1. Agree = 22.35 -16. Strongly Disagree=8 Q. Neutral =36. Disagree =22.20 a) Strongly Agree =37.4864 √17.Disagree =7.20 a) Reliability factor in AXIS bank (Y) Q.Co-efficient of correlation: It has been used here to analyze the relationship between considering AXIS Bank as a one-stop shop for all the financial needs of a customer and the factors that builds a strong relationship with customers. Q.(∑x/n) (∑y/n) ___________ 94 .72-9.9745 = = r : 0.21 Prefer AXIS bank as a one shop for all the financial needs (X) Q.8% INFERENCE: Thus there is a strong (87 %) correlation between the familiarity among the customers about different types of Bajaj Allianz life policies and the explanation of AXIS bank employees about Bajaj Allianz life insurance through phone calls or direct contact.(∑x/n)² √∑y²/n-(∑y/n)² r = = 13.21 Strongly Agree =12.Neutral =12.

60 – (3. Q.(∑x/n)² √∑y²/n-(∑y/n)² r = = 10.21.9.08) (3.Neutral =36.Prefer AXIS bank as a one shop for all the financial needs (X) Q.486 √10.Prefer AXIS bank as a one shop for all the financial needs (X) Q.21 Strongly Agree =12. Q. Agree = 21.278532 = r 0.INFERENCE: Thus there is a 70% of correlation between the existence of the factor reliability in AXIS bank and acceptance of AXIS bank as a one-stop for all the financial needs.Strongly Disagree=8 Q.15113 = 1.20 c) Wide range of products and schemes (Y) 95 .72-9.4556 1.1444 1. Agree = 22.Neutral =24.20 b) Easy and advantageous banking over other banks in AXIS bank (Y) Q.Disagree =36.07) √10.(∑x/n) (∑y/n) ___________ correlation between existence of the factor easy and advantageous banking over other banks and acceptance of AXIS bank as a one-stop for all the financial needs.Disagree =22.11067 * 1.60 – 9.5% INFERENCE: Thus there is a strong (90%) = ∑xy/n .895% : 89.21.424 10.75.Strongly Disagree=4 ∑X = 308 ∑ x2= 1072 ∑y = 307 ∑y2= 1075 ∑xy = 1060 n =100 Where Correlation Co-efficient (r) ____________ √∑x²/n.20 b) Strongly Agree =15.

Prefer AXIS bank as a one shop for all the financial needs (X) Q.Neutral =32.20 d) Better understanding of customer needs and provide expert advice.08) (3.(∑x/n) (∑y/n) 96 .12. Agree = 24.Strongly Disagree=3 ∑X = 308 ∑ x2= 1072 ∑y = 316 ∑y2= 1112 ∑xy = 1055 n =100 Where Correlation Co-efficient (r) ____________ √∑x²/n.16) √10.691% : 69.Disagree =22.8172 1.72-9. n =100 Where Correlation Co-efficient (r) = ∑xy/n .985 10.Neutral =36.Strongly Disagree=8 Q.21 Strongly Agree =12.Neutral =33.Q.21.Disagree =26.20 d) Strongly Agree =15.20 c) Strongly Agree =13.11067 * 1. Agree = 23.(∑x/n)² √∑y²/n-(∑y/n)² r = = 10.Strongly Disagree=8 Q. Q. Agree = 22.(Y) Q. ∑ x2= 1072 .1% INFERENCE: Thus there is a 69% of = ∑xy/n .60 – 9.7328 1. ∑y2= 1147 .486 √11.55 – (3.(∑x/n) (∑y/n) ___________ correlation between existence of the factor wide range of products & schemes and acceptance of AXIS bank as a one-stop for all the financial needs.9.21 Strongly Agree =12. Agree = 22.0650 = 0.Disagree =22. ∑xy = 1093 . ∑y = 321 .Strongly Disagree=3 ∑X = 308 .Disagree =28.182961 = r 0.Neutral =36.

30 3.___________ _________ √∑x²/n.0432 1.93 – (3. which is very strong.486 √11.(∑x/n)² √∑y²/n-(∑y/n)² r = = 10. in order to know the association between the persons who are planning to take insurance policy in the future and the persons who prefer Bajaj Allianz life for obtaining a policy in the future.8868 1.0797 = 1. Null hypothesis: 97 . Chi-square test has been applied as a goodness of fit.72-9.199272 = r 0.9% INFERENCE: Thus there is an 87% of correlation.869% : 86.E) 2 E Where Oi = observed frequency Ei = Expected frequency For more accuracy.21) 10.93 – 9.11067 * 1.08) (3.47. between acceptance of AXIS bank as a one-stop for all the financial needs and existence of the factor better understanding of customer needs and provide expert advice in AXIS bank √10.Chi-square test: When certain observed values of a variable are to be compared with the expected value. the test static Ψ² = (O .10.E) 2 E Here. Yates correction is used and the formula used is given below: Ψ² = (O .

74 27.86 4.There is no association between the persons who are planning to take an insurance policy in future and the persons who prefer Bajaj Allianz life insurance to buy an insurance policy in the future.26 42 Calculation of Ψ²: Observed (O) 30 17 12 41 Frequency Expected Frequency (E) 19. Calculation: Planning to take any life insurance policy in future.26 105.33 3.26 105.26 58 * 53/100 = 30.26 30. Alternative hypothesis: There is an association between the persons who are planning to take an insurance policy in future and the persons who prefer Bajaj Allianz life insurance to buy an insurance policy in the future.42 58* 47/100 = 27. Yes Will Bajaj Allianz Life insurance be your choice future.26 105.74 58 47 53 100 98 .26 22.26 (O – E) ² E 5.74 42 * 53/100= 22. Column Total 42 42% No 17 41 58 58% 47 53 Row Total Yes 30 12 for obtaining the policy in No 100 100% Expected frequencies are given in the table: 42 *47 /100 = 19.74 (O – E) ² 105.72 3.

841 Since calculated Ψ² > tabulated Ψ² null hypothesis (Ho) is rejected. 40 respondents are preferring to buy from AXIS bank itself. 47 respondents choice would be Bajaj Allianz Life Insurance. Tabulated Ψ² value for 1 degrees of freedom at 5% level of significance is = 3. INFERENCE: Thus. The percentage can be thus calculated as follows: Percentage Analysis: 40 * 100 = 85% 47 99 . And alternative hypothesis has been accepted.33 Tabulated value: Degrees of freedom: d. Percentage Analysis: No.of columns. of rows and c= No. of respondents Out of 100 respondents.f.1) (c – 1) = (2 – 1) (2 – 1) = 1 Where r= No. = (r .17. Out of which.33 E Calculated chi-square value is 17.33 Ψ² calculated value = ∑ (O – E) ² = 17. there is an association between the persons who are planning to take an insurance policy in future and the persons who prefer Bajaj Allianz Life Insurance to buy an insurance policy in the future. of respondents Total no.PERCENTAGE ANALYSIS: This has been used here to calculate the number of persons who wants AXIS bank to be their distribution channel in case of their willingness to buy Bajaj Allianz Life Insurance. 4.

for obtaining a policy in the future.INFERENCE: Thus it can be observed that 85% of the respondents are willing to buy from AXIS bank in case of their choice will be Bajaj Allianz life insurance. 100 .

after the year they started earning revenue from bancassurance. as its % to customer assets has been increasing over the years.e. it is quite clear that AXIS Bank is expected to take still more initiatives to  improve its existing performance in bancassurance.the same can be overcome. Thus.i.With the increase in performance in bancassurance. Though non-interest income as a % to operating profit. Business per employee and profit per employee of the bank are decreasing over the  years that it can affect the sale of insurance policies that the bank’s immediate attention is required. To analyse the ways and means for it. as it has been above the  prescribed norms of RBI that it reveals the potentiality of AXIS Bank to perform bancassurance operations. which is NPA.total revenue and working  funds were increased from 2004 to 2005. It is desirable also that the bank can improve its existing performance to increase its  return on assets and to reduce the operating expenses of the bank.. Capital adequacy ratio has been found satisfactory. RECOMMENDATIONS AND CONCLUSION 5.FINDINGS. responses are collected from the customers. Following are the justifications from the primary data: .it has been decreased in the year 2006-07. The other prescribed norm. It also indicates the necessity of further initiatives and the areas where they need to focus and can cash in on the situation for better prospects. But. steps can be taken to reduce the same. also looks reasonable.1  FINDINGS The increase in the revenue for the sale of insurance policies by AXIS bank and the increase in the retail segment’s profit and assets indicates that the financial performance of the AXIS bank in bancassurance has been good and the bancassurance has also contributed well to the retail segment.

awareness needs to  be created about the fact that AXIS bank is cross-selling Bajaj Allianz Life Policies. 30 respondents are planning to take an insurance policy in the immediate future . Though most of the respondents are aware of Bajaj Allianz life. 47% of the respondents choice would be Bajaj Allianz life insurance for obtaining a  policy. protecting the family in case of unfortunate occurrences are the increasing order of preference in terms of essentiality among most of the respondents in the near future for taking a policy 102 . Out of which. invest in child dreams. RECOMMENDATIONS AND CONCLUSION  Though general opinion about insurance is pretty good among the people. post retirement income. Majority of the respondents are satisfied with the customer services provided by  AXIS bank that it is a positive sign for bancassurance.The association between this two is also proved through Chi-square test. Though the other relationship building factors are found satisfactory among most of  the customers.FINDINGS. most of the respondents are uncertain about insurance as an investment option. especially the easy and advantageous banking determines the mindset of the customer in considering the bank as an integrated financial solutions. The same is also proved statistically through correlation analysis. This is also proved statistically through correlation analysis. this requires immense attention by AXIS bank. As these factors. 53% of the respondents are not holding any life insurance policy so far that it is clear  that there are still lot of untapped source which the bank can explore and reap the harvest. better returns. Most of the respondents are not cognizant enough with the Bajaj Allianz Life  Insurance policies as the initiatives taken by AXIS Bank have been inadequate. Tax benefits. emphasis is needed in the area of Easy and advantageous banking over other banks since it is denied by majority of the respondents.

The display case can be located on the place where the customers can have a 100%  chance of looking into it like cash counters.. 85% of the respondents prefer AXIS bank to be their distribution channel.FINDINGS. 5. entrance etc. the following can be done. RECOMMENDATIONS AND CONCLUSION  And out of 47 respondents who are in favour of Bajaj Allianz Life 40 respondents i.. This clearly indicates the advantage the bank can make use of and if taken more initiatives it can even make more customers to buy Bajaj Allianz life insurance policies from AXIS bank . The number of display cases can also be increased and catchy slogans can be given.2 RECOMMENDATIONS  To strengthen the initiatives that are much needed to reach out more public and to improve its existing performance.e. 103 .

can also attract more customers who are visiting AXIS bank website. it is important for the bank to find out more ways to promote the same. Most of the customers prefer to buy insurance policy for tax benefits and better  returns that the target customers can be identified. RECOMMENDATIONS AND CONCLUSION  To reach out more customers via website. Motivation. But. as this will help them to explain and guide the customers better. More pop-ups window. 104 .FINDINGS. This will also help them to reach more customers. This will definitely help the bank to convince more customers to prefer AXIS bank as their one stop shop for all their financial solutions. As most of the customers denied the easy and advantageous banking in AXIS over other banks. frequent playing of graphical displays. AXIS bank can educate the customer by sending frequent e-mails with attractive synopsis to the e-mail ids of the customer about Bajaj Allianz life insurance policies with the link carrying them to the AXIS bank website. Consequently the business per employee and profit per employee can also be increased which is currently decreasing over the years. This type of enabling sales oriented culture among the employees is the best possible way to increase the productivity among the employees that it assumes greater significance. Employees of the AXIS bank can also be given more training about Bajaj Allianz  Life policies. Most of the respondents are satisfied with the customer services that it is a positive  sign. immediate rewards and better incentive packages can also help them to do better. since customer satisfaction is no customer loyalty. Emphasis can also be given to promote insurance as an investment option as most of  the respondents are uncertain about it. they will prefer to accept more products with the same bank only if they find it advantageous.

Return on assets as  well as the non-interest income. 5. the bank can make use of it and retain its customers. which leads to much progress of the bank. it can also take the advantage of more customer base and can become more competitive. in 105 . Thus with its increase in the existing performance. . RECOMMENDATIONS AND CONCLUSION  As many of the respondents who wish to buy Bajaj Allianz Life Insurance Policy also have opted AXIS bank as their channel. Thus by doing all this. the bank can increase its fee-based income.FINDINGS. With more initiatives and focus in the specified areas the bank can even have the potentially of making more customers to buy Bajaj Allianz Life policy from AXIS bank. The prospect for bancassurance is also bright as AXIS bank is found to be a preferable distribution channel among the customers who wish to buy Bajaj Allianz life policy. With the merger of centurion bank.3 CONCLUSION The study thus points out that the financial performance of AXIS bank in bancassurance has been good and it also provides a helping hand to the overall progress of the bank.

FINDINGS. RECOMMENDATIONS AND CONCLUSION the upcoming years. AXIS bank will definitely play a predominant role in the bancassurance industry and there by can contribute more to the upliftment of the bank. 106 .

This study concentrates only on the life insurance segment that it can be broaden by  including non life insurance. it can be extended to other areas for an in-depth analysis.SCOPE FOR FURTHER RESEARCH  As this study focuses only on the limited areas of chennai. which  undertakes bancassurance as this study focuses on the performance of AXIS bank alone . Comparative analysis can also be done among the performance of banks. . .

January 1993.BIBLIOGRAPHY & WEBLIOGRAPHY BIBLIOGRAPHY: BOOKS: • • Reddy.watsonwyatt.K. JOURNALS: • Amel Dean Barnes colleen.in www.com www. Panetta Fabio & Sallen Carmelo “Consolidation and Efficiency in the financial sector: A review of the international evidence”.insuremagic.Y. March 2000.com www.S. Chennai.com .P “ Research Methodology” Margham Publications.insureegypt. A “Challenging Barriers between banking and Insurance”. Second Edition.Axisinsurance.com www.“Management Accounting” Margham Lochanan Ravi .“An international analysis of Life insurance Demand”.Axisbank.com www.google.co. 2003. Chennai.Page numbers: 1553-1571 WEBLIOGRAPHY: www. 2005. Journal of Risk and Insurance Volume No:60.April 2001.J & Kim.Page numbers: 616-634 Carow Kenneth. Journal of Banking and Finance Volume No: 25. Journal of banking and Finance Volume No: 28. & Hariprasad Reddy.Page numbers: 2493-2519 • • Browne M. T. Publications.