UIIC AO 2016 – Letter – How Banks and Insurance Companies can Help Each other

Dear Reena,

        Received your letter yesterday, I came
to know that you are representing a seminar on ‘how banks and insurance
companies in india can help each other’. I am glad to write you to state my
views on this topic which can help you to prepare your seminar.

       Banks has more capital, more no. of
customers and more staffs than the insurance company, therefore, insurance
companies can utilize bank resources to promote insurance products. It can also
termed as bancassurance. This has been proved beneficial to both banks and
insurance companies, as both can earn more profit since the banks get their
commission for selling the insurance products and in the same way the insurance
companies get the wide spread networking of their branches.

     The broadening of bank’s product range
makes the bank more attractive and can reinforce customer satisfaction and
therefore strengthen the long term client relationship. Besides, such schemes
reduce the cost of marketing, so that both bank and the insurance company can
get benefit. An insurance company can establish itself more quickly in a new
market, using bank’s existing network. It also benefitted customers, as it
saves their time, while they get all the financial services through a single
window or ‘one stop one shop’.

    In this way, both banks and insurance
companies have been experiencing the positive impact from bancassurance
practices.

   Hope these points will help you to prepare
your seminar. Give my regard to all at home.