A 2022 McKinsey report highlighted that 31% of the life insurance premiums in Asia Pacific came from the Bancassurance channel alone. By now it is established that the Bancassurance channel makes increasing sense for the bank, the insurer, and the customer. And the deal is further sweetened with regulators opening up the playground further. IRDA now allows banks to partner with up to nine insurers for each type of insurance – life, non-life, and health.
However, everything is not smooth sailing. There are complexities involved in such a partnership. These include (but are not limited to):
- Executive time that will be spent by bank leadership in dealing with their insurance partners.
- The time and effort needed to evaluate the extensive range of product choices available across providers.
- Curating a basket of limited products that are best in their respective categories and suit the bespoke needs of their customers across customer segments.
- The complexity of managing the sales process, whether it’s bank-owned RMs who need to be trained on a wide range of insurance solutions or insurance company-supported representatives of 9-27 companies in bank branches!
Identifying and monitoring input and output metrics to reflect the new normal – which helps optimize the performance of sales teams engaged in selling banking and insurance solutions.
But with newer players stepping into the arena – neo banks, financial services providers, insurtechs, payment channels and so on, banks must look at ways to build their brand as an integrated financial services provider and insurers must look at partnerships that are profitable.
A digitized, data-led bancassurance strategy that is focused on delivering to customers a unique one-stop-shop for all their financial wellness needs can help accelerate bancassurance growth further.
Both banks and insurers must augment existing capabilities with,
- Deeply thought-out product portfolios and personalized product plans that can cover the financial needs of customers end-to-end.
- End-to-end automation of all processes to increase sales effectiveness and customer experience
- The power of analytics on the expanded amount of customer data available to develop relevant and timely offers, which are aligned and integrated/embedded within the bespoke customer journeys.
- Advanced AI/ML customer engagement solutions can help businesses become:
More Efficient through:
- Automation of processes and real-time access to all necessary information.
- Prescriptive guidance on the next best actions to maximize outcomes.
More Effective through:
- Understanding and emulating winning behaviors.
- Accessing scientifically defined activity playbooks.
More Productive through:
- Providing proactive visibility on goals versus achievements, highlighting gaps and necessary interventions.
- Increasing customer face time through automatic detection and reporting of activities.
- Assisting with digital prospecting and lead enrichment to expand the opportunity set.
Banks and insurers are already sailing the bancassurance channel and seeing profit. Better technology at the steering wheel will ensure a smoother, faster and safer ride.
If you’d like to read more such insights about the future of Bancassurance, we asked FIVE leading experts in Indian Bancassurance (from organizations like IndiaFirst Life, PNB Metlife, HDFC Bank, Bank of Baroda, and more) for advice on how to turn the channel into a profit-generating lever.
ALL of their insights are in our latest report – Morph: Bancassurance India Insights. Click on the image below to download their nuggets of knowledge!