A case study on impact of bancassurance on profitability of selected commercial banks in India

D. R. RAJASHEKHARA SWAMY, GSSS Institute of Engineering and Technology for Women
N. S. PAVITHRA GOWTHAM, Assistant Professor,GSSS Institute of Engineering and Technology for Women
B. U. SHAMANTHA KUMAR, Assistant Professor, GSSS Institute of Engineering and Technology for Women
Abstract
Financial institutions play vibrant role in the economic development of a country. A well-established financial inclusion is the key factor for economic growth in many developed countries. India opens the market for different investment to provide variety of financial products. Due to merging of global financial markets & technology the insurance agencies brought new channels of distribution for the existence. Banks and insurance agencies are two different financial institutions that help for economic growth, in this context “BANCASSURANCE” is the new product. Bancassurance is an arrangement between a bank and an insurance company allowing the insurance company to sell its products to the bank's client base. This partnership arrangement can be profitable for both companies. Banks earn additional revenue by selling insurance products, and insurance companies expand their customer bases without increasing their sales force or paying agent and broker commissions. After getting the approval from IRDA, many public and private banks are tie-up with different insurance agencies to diversify their products. The study results show that effect on fee collected from bancassurance on profitability of selected nationalized banks in India. Collaboration between a Bank & Insurance company facilitates the banks to sell insurance product to its customers in exchange of fees. Banks with greater involvement in Bancassurance business generally tend to experience involvements in their efficiency, and thus also accrue greater profits. The purpose of the research is to identify the drivers that influence the profitability of the banks which facilitates the Bancassurance.  

Keywords: Bancassurance, Financial institutions, Insurance, Profitability, Collaboration

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Notes on contributors
Mrs. PAVITHRA GOWTHAM NS is an expert in the area of finance.  She has been teaching courses such as International Finance, Financial Derivative, Banking and Financial Services, Mergers and Acquisitions and Corporate Valuation.  She is working as Assistant Professor, Financial Management in the Department of Master of Business Administration, GSSSIETW, Mysuru, Affiliated to VTU, Belagavi. She is pursuing Ph.D from JSS Science and Technology University, Mysuru.  She is having 15 years of teaching experience as faculty in finance Management. She has many publications in journals of national and international repute, presented papers in several conferences and attended numerous workshops as well.

Mr. SHAMANTH KUMAR B U is presently associated with the Department of MBA, at GSSS Institute of Engineering &Technology for Women, Mysuru as Assistant Professor in Financial Management. He has over 7 years of experience in Teaching. He has done his MBA in Finance from Visvesvaraya Technological University, Belagavi, Karnataka. He Specialized in Accounting, Banking, Investment Management, Taxation and Corporate Finance. He has published more than 10 research papers in various National & International journals & conferences. He is also a lifetime member of “The Society of Innovative Educationalist& Scientific Research Professional”, Chennai.

Dr. D. R. RAJASHEKHARA SWAMY working as Professor and Head at GSSSIETW, Mysore - having a rich experience of 26 years both in academic and industry. He has worked both in Indian and foreign universities in various capacities. He has worked as visiting professor in few autonomous B-Schools in India, teaching Marketing, Logistics, and Supply Chain Management and also teaches Quality Management, Operations Management, and Entrepreneurship Development and has authored more than 40 Research Papers. He is also on the board with few Universities and autonomous B schools as research supervisor, editor, member, examiner, and evaluator and in Doctoral Committee panel.
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