LIC, Axis Bank ink pact in largest bancassurance deal
The country’s largest insurer Life Insurance Corporation of India (LIC) on Thursday has signed an agreement with private sector lender Axis Bank making it its bancassurance partner wherein the bank will distribute LIC’s products to its customers.
This is one of the biggest tie-ups announced after financial sector regulators liberalised norms governing the sale of insurance products by banks, called Bancassurance, under which lenders were allowed to sell products of multiple insurance companies.
Bancassurance is a model where the insurance company join hands with a bank in order to sell its products. This is also known as ‘channel sales’ in banking parlance.
In the preliminary phase, the bank will distribute LIC’s life insurance products across its branches in West Bengal, Bangalore and Haryana – Panchkula. Additionally, it will also provide post sales services such as premium collection and renewal of policies.
“The coming together of the two major reputed organisations would enable them to combine and utilise the synergies for enhancing customer satisfaction,” LIC executive director for bancassurance Mukesh Gupta said.
In a statement, LIC said that as on June 30, 2016, Axis Bank had a network of 3,006 domestic branches and extension counters situated in 1,882 centres. From April 1, norms have been revised under which corporate agents like banks are allowed to tie-up with three life, three non-life and three standalone health insurance companies.
Earlier, under the bancassurance model where banks sold insurance meant that they could only sell products of one life, one non-life and one standalone health insurer. Apart from LIC, Axis Bank also has a tie-up with Max Life Insurance in the life insurance space.Rajiv Anand, executive director and head retail banking, Axis Bank said that banks have increased roles in insurance distribution.
“Over the last five years the life insurance business at Axis Bank has grown at a CAGR of over 25 percent. The partnership with LIC would enable us to further expand our existing bouquet of offerings and put forth a compelling proposition for our customers,” he said. Experts says that this move of LIC will help them to gain momentum since over the last few years most of LIC agents has decided to quit selling its products.
The country’s largest insurer Life Insurance Corporation of India (LIC) on Thursday has signed an agreement with private sector lender Axis Bank making it its bancassurance partner wherein the bank will distribute LIC’s products to its customers.
This is one of the biggest tie-ups announced after financial sector regulators liberalised norms governing the sale of insurance products by banks, called Bancassurance, under which lenders were allowed to sell products of multiple insurance companies.
Bancassurance is a model where the insurance company join hands with a bank in order to sell its products. This is also known as ‘channel sales’ in banking parlance.
In the preliminary phase, the bank will distribute LIC’s life insurance products across its branches in West Bengal, Bangalore and Haryana – Panchkula. Additionally, it will also provide post sales services such as premium collection and renewal of policies.
“The coming together of the two major reputed organisations would enable them to combine and utilise the synergies for enhancing customer satisfaction,” LIC executive director for bancassurance Mukesh Gupta said.
In a statement, LIC said that as on June 30, 2016, Axis Bank had a network of 3,006 domestic branches and extension counters situated in 1,882 centres. From April 1, norms have been revised under which corporate agents like banks are allowed to tie-up with three life, three non-life and three standalone health insurance companies.
Earlier, under the bancassurance model where banks sold insurance meant that they could only sell products of one life, one non-life and one standalone health insurer. Apart from LIC, Axis Bank also has a tie-up with Max Life Insurance in the life insurance space.Rajiv Anand, executive director and head retail banking, Axis Bank said that banks have increased roles in insurance distribution.
“Over the last five years the life insurance business at Axis Bank has grown at a CAGR of over 25 percent. The partnership with LIC would enable us to further expand our existing bouquet of offerings and put forth a compelling proposition for our customers,” he said. Experts says that this move of LIC will help them to gain momentum since over the last few years most of LIC agents has decided to quit selling its products.
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