Bancassurance is a combination of banking and insurance business. Bancassurance communication is expected to tangibly increase in India. The tie-ups and post-liberalization of insurance companieshave increased its significance. The global evolution of bancassurance in the last three decades has proved that it could assume many structures depending on the country of operation. Bancassurance, as overseas experience has shown, could assume myriad models of operation in India too.

For the new insurance companies which started in India post-reforms, bancassurance, the result of insurance companies tying up with multiple banks, has emerged as a very important channel for distributing their products with nearly a third or more of their premiums coming from this segment as can be seen from Exhibit I. Private life insurance companies have gained the most from the bancassurance tie-ups and bancassurance is all set to play a significant role in the manner in which insurance is sold in India. Therefore, it has become imperative to understand the emerging structures of bancassurance and the reasons thereof.