<p><strong>Introduction:</strong></p> <p>The insurance sector is one of the important segments for mobilizing financial resources for the growth of any economy. It plays an important role in mitigating life's uncertainties. The purpose of insurance is to safeguard against informing by making good the losses of the unfortunate few, through the help of the fortunate mans, who were exposed to the same risk but saved from misfortune. The entry of private insurance players, people have got a host of options to choose from.</p> <p>The changing consumer behavior, deregulations and government intervention, competition, technology, distribution net works, automation, technological advancement client relationship and quality. Radical changes in customers profile due to changing life style and societal perception, product development or diversity is going to be another area requiring a deep thinking.Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns, lighting, earthquakes, etc, are perils. If such perils can cause damage to the asset, we say that the asset is exposed to that risk. Perils are the events.</p> <p>Risks are the exposed to losses or damages. The risk to an owner of a building, because of the peril of an earthquake, may be a few lakhs or a few crore of rupees, depending on the cost of the building and contests in it.</p> <p>As a consequence, the essence of insurance is to share losses and substitute certainty by uncertainty. The emerging economic scenario has thrown us the challenges which threaten the insurance business in India since today, banks are doing insurance business.</p> <p> With the globalization and liberalization, the service sector has been observing a lot of transformations. The life insurance industry in India has been moving ahead at a hasty pace since opening up of the sector in2000. The size of the country, an assorted set of people pooled with problems of connectivity in rural areas, makes insurance selling in India a very difficult proposition. Life insurance companies require massive distribution, strength and fabulous manpower to reach out to such a huge customer base. This distribution will undergo a sea change as various insurance companies are proposing to bring insurance products into the lives of the common man making them available at the most basic financial point, the local bank branch,throughBancassurance.“Bancassurance†- a term coined by combining the two words bank and insurance (in French) - connotes   distribution of insurance products through banking channels. Banc assurance encompasses terms suchas `Allfinanz’ (in German), `Integrated Financial Services’ and `Assure banking’. Banks, with their geographical spread and penetration in terms of customer reach of all segments, have emerged asviable sources for the distribution of insurance Products. The ubiquitous agent is no more the only distribution channel today for insurance products. The motives behind banc assurance also vary. For banks, it is a means of product diversification and a source of additional fee income. Insurance companies see banc assurance as a tool for increasing their market penetration and premium turnover. The customer sees banc assurance as a bonanza in terms of reduced price, high quality product and delivery at doorsteps. Actually, everybody can be a winnerhere.Will it works in India? That can only be answered in the future; the initial action does show that many banks seem to believe that banc assurance will be abig success here. Some foreign and Indian banks --Stanchart-Grindlays, ABN-Amro, Citibank, HSBC, Bank of Baroda (BoB) and State Bank of India (SBI) -- are hoping to replicate the French successof this insurance-cum-banking model.</p> <p> In India, as elsewhere, banks are seeing margins decline sharply in their core lending business. Consequently, banksare looking at other avenues, including the sale of insurance products, to augment their income. The sale of insurance products can earn banks very significant commissions (particularly for regular Premium products). </p> <p>                In addition, one of the major strategic gains from implementing bancassurancesuccessfully is the development of a sales culture within the bank. This can be used by the bank to promote traditional banking products and other financial services as well.Bancassurance is not simply selling insurance but also changing the mindset of a bank. In addition toacting as distributors, several banks have recognisedthe potential of insurance in India and have taken equity stakes in insurance companies. However, the evolution of banc assurance as a concept andits practical implementation in various parts of the world, have thrown up a number of opportunities and challenges.</p> <p>Insurance products, to augment their income. The sale of insurance products can earn banks very significant commissions (particularly for regular premium products).In addition, one of the major strategic gains fromimplementinbancassurancesuccessfully is the development of a sales culture within the bank.</p> <p>This can be used by the bank to promote traditional banking products and other financial services as well.Bancassurance is not simply selling insurance but also changing the mindset of a bank. In addition toacting as distributors, several banks have recognisedthe potential of insurance in India and have taken equity stakes in insurance companies. However, the evolution of banc assurance as a concept andits practical implementation in various parts of the world, have thrown up a number of opportunities and challenges.</p> <p> <strong>CONCLUSION:</strong></p> <p>From the above discussion, it is felt that, a well developed and evolved coordinated Bank cum  insurance sector with bundle of new policies of not only security type but also as a source of investment which yield good return to the policy holders. At the same time, it provides long-term funds for infrastructure development. Risks and uncertainty are part of life's great adventure - accident, illness, theft, natural disasters; they are all built into the working of the universe, for the future to happen.<strong></strong></p> <p><strong> </strong></p> <p> </p><strong>About the Author:</strong><br /><p>Dr.R.SRINIVASAN is a Post graduate in commerce and Management. He received his doctoral degree from Alagappa University in 1997. He is now Working as an ASSOCIATE PROFESSORin Post graduate and Research Department of Corporate Secretaryship at Bharathidasan Government College for Women (Autonomous), Pondicherry University, Puducherry.He currently teaches Accounting ,financial management and Research Methodology Subjects. Before Joining BGCW, he was teaching in SNR College, Coimbatore, Sindhi college, Chennai& T.S.Narayanasamy College, Chennai for eight years. He was with the industry for a short term at Salzar Electronics Pvt. Ltd, Coimbatore. He has about 20 years of teaching experience and having research experience of 15 years. His interests are in Accounting and finance, Capital Market, Quantitative Methods. He underwent the Faculty Development Programme at Indian Institute of Management Ahmedabad during 2000-01. He has presented 20 papers in national and international conferences and has published twenty papers in the areas of Finance and Human resource Management in National Journals. Co-authored a book titled, ‘Investors Protection, published by Raj Publications, New Delhi He has delivered lectures in contemporary finance topics at Pondicherry University. He is involved in consultancy projects for Godrej Saralee, Chennai in the areas of Statistical Applications. He has supervised a number of research projects in the area of corporate finance and Human Resource Management. He is the Board of examiner in corporate Secretaryship and Management for the past two decades.
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