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What Is Bancassurance?

Bancassurance is used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products. 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. 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. Insurers see it as a tool to increase penetration and market share and bankers use it to augment their fee income and to smoothen the volatility of interest income. Bancassurance is a package of banking and insurance service at one roof.The introduction of Bancassurance has broadened the scope of retail banking.


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Bank staff, rather than an insurance salesperson, become the point of sale/point of contact for the customer. Bank staff are advised and supported by the insurance company through product information, marketing campaigns and sales training.

Bancassurance provides various advantages to banks, insurers and the customers.

For the banks, Banks get an additional source of income from commissions and fees from their insurance business and the operational costs get lowered for banks as they use the same infrastructure that they use to sell other banking products.

For the Insurance Company, the insurance company gets improved geographical reach without additional costs.

To Customers, it provides multiple services at one place to the customers which enhance the customer satisfaction also.

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