Insurance cos not keen on banks as brokers
Under the present bancassurance structure, banks are allowed to tie up with only one life and one non-life insurance player, each. Moreover, many leading banks also promote insurance companies of their own, so it would not make sense for them to tie up with another player.
“It is an opportunity, but at this point in time, we are not considering the brokerage model because we already have our own insurance firm,” said KVS Manian, group head (consumer banking), Kotak Mahindra Bank.
Bankers believe that the current partnership model will always score above a broker model because it has more involvement from the bank and the insurance company.
“We want the insurance company to be answerable to the kind of products being sold to our customers. In a broker model it would not be very effective,” said a senior official from a leading private sector bank.
Bankers like M Narendra, chairman and managing director, Indian Overseas Bank, are still waiting for Insurance Regulatory and Development Authority (Irda) to come out with final guidelines on bancassurance, before considering a broker model.
Insurance players on the other hand sound pessimistic about banks entering the market as brokers.
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