Bancassurance in India: Life, Non-Life and Creditor Insurance

  • ID: 2492025
  • Report
  • Region: India
  • 74 Pages
  • Finaccord
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Bancassurance in India: Life, Non-Life and Creditor Insurance is a study and related PartnerBASE™ dataset examining the provision of life, non-life and creditor insurance by banks and other lending institutions in India.

Drawing on the results of a survey of 72 banking entities in India, the study verifies the percentage of organisations investigated that distribute each of the following 13 types of insurance: accident insurance, creditor insurance related to consumer finance, creditor insurance related to credit cards, creditor insurance related to mortgages, critical illness insurance, health / hospital cash plans, household insurance, income protection insurance, investment-related life insurance, medical expenses insurance, personal motor insurance, retirement savings, and risk life insurance.

For those banking entities that are active in one or more of these fields, the reports ascertain the operating models that they use to source the type of insurance in question (e.g. external, joint venture or captive underwriters) and the identity of the specific providers used. This information is then displayed in terms of the weighted share of partnerships of these providers, which takes into account the number of retail customers of the partner banking entities, thus highlighting those insurance companies that hold the distribution relationships that offer the most potential.

You may be able to use this report, plus the PartnerBASE™ dataset and market data annexes that accompany it, in one or more of the following ways:

- gain access to a source of information that provides a comprehensive overview of the provision of personal insurance products by all significant banking entities in India;

- identify partnership opportunities for the same personal insurance products that may arise either because a banking institution is not currently active or because there is scope for replacing an existing initiative;

- understand which underwriters and other product providers have been successful in establishing distribution relationships with the most important banking entities in India;

- assess how the evolving regulatory environment may open up or block opportunities for your organisation to sell through the bank distribution channel;

- appreciate the magnitude of the opportunity to sell personal insurance products through banks and other lending institutions in India.

Overall, in a market characterised by the involvement of over 20 joint venture underwriters, across the 72 banks and other lending institutions researched in India, Finaccord's research identified over 500 bancassurance distribution initiatives for the various types of insurance investigated.
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0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

Distribution partnerships with banks and other lending institutions constitute the focus of this report

Rationale

Bancassurance is the most rapidly growing distribution channel in India

Methodology

Survey of banks and other lending institutions

Market data

Definitions

Investment-related life insurance

Retirement savings

Risk life insurance

Critical illness insurance

Income protection insurance

Accident insurance

Health / hospital cash plans

Medical expenses insurance

Personal motor insurance

Household insurance

Creditor insurance

Mortgages, consumer finance and credit cards

Weighted provider share of partnerships

Operating models

Abbreviations and exchange rates

PartnerBASE™ and market data annexe

Finaccord

2.0 MARKET BACKGROUND

Banks and other lending institutions covered

Economic background

India's economy has performed very strongly in recent years...

... and was relatively unaffected by the global financial crisis...

... although it still faces many significant problems

In the World Bank's Ease of Doing Business Index, India is ranked only 132nd in the world

Introduction to the banking sector

In terms of its total number of retail customers State Bank of India leads the market...

... in a sector in which government-owned banks account for a majority of branches

Substantial swathes of the Indian population remain unbanked

The RBI follows a policy that generally encourages banking sector consolidation...

... with a number of mergers and acquisitions in evidence in recent years

Introduction to bancassurance

India's insurance market has been subject to deregulation since 2000

Unusually, the distribution share of banks is higher in non-life insurance than in life insurance...

... although is growing in both fields as the traditional agency model comes under pressure

Most insurance companies use bank distribution as a part of a multi-channel strategy

State Bank of India has maintained a joint venture with BNP Paribas Cardif since 2000...

…with over 20 other joint ventures having been established since then

The bancassurance channel is characterised by relatively strict regulation in India…

…with banks not being permitted to tie up with any more than one life and one non-life insurer

Regulations governing bancassurance partnerships are likely to change in the near future

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS

Insurance market size and growth

The total market grew by 8.0% in nominal terms between 2008 and 2012

Banks commonly offer a wide range of investment-related life insurance products

Distribution share of banks

Bancassurers accounted for around 12% of the total life insurance market in 2012

Bancassurance provision rates, operating models and partnerships

Investment-related life insurance

Investment-related life insurance is promoted by three quarters of banking organisations researched

SBI Life is the leading provider by weighted share of partnerships...

... followed by the government-owned LIC through relationships with 10 different banks

Star Union Dai-ichi Life benefits from its joint venture partnerships with two banks...

... albeit many other joint ventures are also active in this field

17 of the banking organisations investigated do not distribute investment-related life insurance

Retirement savings

The provision rate for retirement savings products is similar to that for investment-related life insurance…

...and the partnerships in place are also very comparable

Performance of key bancassurance underwriters

Around one quarter of the Indian life insurance market is controlled by joint ventures

4.0 PROTECTION-RELATED LIFE INSURANCE

Insurance market size and growth

The market for protection-related life insurance declined in value between 2008 and 2012

Critical illness insurance is often offered as a rider rather than as a stand-alone product

A small proportion of protection-related life insurance is due to creditor insurance

Distribution share of banks

Bancassurance provision rates, operating models and partnerships

Risk life insurance

Over three quarters of banking organisations researched offer risk life insurance…

... with SBI Life and LIC again ranked most highly by weighted share of partnerships

MetLife India benefits from a key partnership with Punjab National Bank

Critical illness insurance

Relatively few banking institutions in India sell critical illness insurance as a stand-alone policy

Thanks to two partnerships, Reliance General is ranked first by weighted share of partnerships...

... followed by HDFC ERGO...

... and ICICI Lombard

Eight banking organisations utilise external underwriters of critical illness cover

Income protection insurance

Income protection insurance is rarely marketed by banking organisations in India

Performance of key bancassurance underwriters

5.0 ACCIDENT AND HEALTH INSURANCE

Insurance market size and growth

The market for accident and health insurance grew to a value of USD 3.1 billion in 2012

Accident and health insurance policies are underwritten by both life and non-life insurance companies

Distribution share of banks

Bancassurance provision rates, operating models and partnerships

Accident insurance

Stand-alone accident insurance is quite commonly sold by banking organisations in India

Government-owned underwriters lead the market by weighted share of partnerships

Universal Sompo is a joint venture underwriter co-owned by four different companies

35 banking institutions have no apparent arrangement for selling stand-alone accident insurance

Medical expenses insurance

Medical expenses insurance is also commonly sold by banking organisations in India

Three government-owned underwriters are ranked most highly by weighted share of partnerships...

... although Bajaj Allianz lays claims to a total of 11 partnerships in this field

26 of the banking organisations investigated do not distribute medical expenses insurance

Health / hospital cash plans

23 bancassurance initiatives are identifiable in the field of health and hospital cash plans

Tata AIG is ranked fourth by weighted share of partnerships thanks to its link with Axis Bank

Performance of key bancassurance underwriters

Joint venture underwriters enjoy a strong position in the (non-life) accident insurance market...

…but have fallen back somewhat in the (non-life) health insurance sector

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE

Insurance market size and growth

Personal motor insurance premiums increased by over 15% per year in real terms between 2008 and 2012

Distribution share of banks

Bancassurance provision rates, operating models and partnerships

Personal motor insurance

Most banking organisations surveyed have an arrangement for selling personal motor insurance

By weighted share of partnerships SBI General and Oriental Insurance lead the market

Third-ranked Bajaj Allianz has established a total of 13 distribution agreements in this field

Household insurance

Provision rates for household insurance are even higher than those for personal motor cover...

…and the two providers ranked first and second are exactly the same

Performance of key bancassurance underwriters

Bank-affiliated joint venture underwriters control close to 45% of the total motor insurance market...

... and over 30% of the total fire insurance sector

7.0 CREDITOR INSURANCE

Consumer lending market size and growth

Mortgage lending

Residential mortgages in India grew at a real compound annual rate of only 3.9% between 2008 and 2012

Non-mortgage lending

The value of non-mortgage consumer lending balances is slightly below that of mortgage balances

Credit and other pay later cards

The credit card market peaked in 2008 and has since slipped by almost 30%

Creditor insurance provision rates, operating models and partnerships

Creditor insurance linked to mortgages

All mortgage lenders in India sell related creditor insurance...

... with SBI Life emerging as the leader by weighted share of partnerships

Once again, joint ventures involving overseas insurance groups have a strong position in the market

Max Life is a non-bank joint venture involving Max and Japan's Mitsui Sumitomo

Creditor insurance linked to consumer finance

Over 80% of entities offering consumer credit have a scheme in place for loan payment protection cover

The main partnerships in this field are identical to those for mortgage-related creditor insurance

12 lending institutions have no apparent scheme for in place for this type of creditor insurance

Creditor insurance linked to credit cards

Over 20 schemes for card-related creditor insurance are up and running in India

Once again, joint venture underwriters affiliated with banks dominate the market

Creditor insurance risk coverage

Some policies offer cover for temporary incapacity but none incorporate cover for unemployment

Creditor insurance market size, growth and forecast

The overall market for all forms of creditor insurance in India is advancing rapidly...

... with demand for policies linked to mortgages and consumer credit likely to be most robust

LIST OF GRAPHICS / TABLES

TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

Overview of bancassurance provision rates for different types of insurance in India, 2012

1.0 INTRODUCTION

Banks and other lending institutions in India contacted by Finaccord, segmented by type

2.0 MARKET BACKGROUND

Key economic indicators for India, 2012

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS

Gross written premiums for investment-related life insurance and retirement savings in India, 2008 to 2012

Gross written premiums for investment-related life insurance and retirement savings in India, 2008 to 2012 (data)

Bancassurance provision of investment-related life insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of retirement savings in India, 2012: provision rate, operating models and weighted provider share of partnerships

Market share in life insurance of key bancassurance underwriters in India, 2007 to 2011

4.0 PROTECTION-RELATED LIFE INSURANCE

Gross written premiums for protection-related life insurance in India, 2008 to 2012

Gross written premiums for protection-related life insurance in India, 2008 to 2012 (data)

Bancassurance provision of risk life insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of critical illness insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of income protection insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

5.0 ACCIDENT AND HEALTH INSURANCE

Gross written premiums for accident and health insurance in India, 2008 to 2012

Gross written premiums for accident and health insurance in India, 2008 to 2012 (data)

Bancassurance provision of accident insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of medical expenses insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of health / hospital cash plans in India, 2012: provision rate, operating models and weighted provider share of partnerships

Market share in accident insurance of key non-life bancassurance underwriters in India, 2010 to 2011

Market share in health insurance of key non-life bancassurance underwriters in India, 2008 to 2011

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE

Gross written premiums for personal motor and household insurance in India, 2008 to 2012

Gross written premiums for personal motor and household insurance in India, 2008 to 2012 (data)

Bancassurance provision of personal motor insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of household insurance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Market share in total motor insurance of key bancassurance underwriters in India, 2007 to 2011

Market share in total property insurance of key bancassurance underwriters in India, 2007 to 2011

7.0 CREDITOR INSURANCE

Residential mortgage lending balances outstanding in India (absolute and per capita), 2008 to 2012

Consumer non-mortgage lending balances outstanding in India (absolute and per capita), 2008 to 2012

Credit and other pay later cards issued and per capita in India, 2008 to 2012

Key data points for the consumer lending market in India, 2008 to 2012

Provision of creditor insurance linked to mortgages in India, 2012: provision rate, operating models and weighted provider share of partnerships

Provision of creditor insurance linked to consumer finance in India, 2012: provision rate, operating models and weighted provider share of partnerships

Provision of creditor insurance linked to credit cards in India, 2012: provision rate, operating models and weighted provider share of partnerships

Risk coverage of creditor insurance policies in India, segmented by type of underlying product, 2012

Creditor insurance gross written premiums in India, segmented by policy type, 2008, 2012 and 2016

Creditor insurance gross written premiums in India, segmented by cover type, 2008, 2012 and 2016

Creditor insurance gross written premiums in India, segmented by policy and cover type, 2008, 2012 and 2016 (data)
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