However, those in the insurance sector don't have much to say yet. A senior National Insurance official says that right now, what is being planned is an ad hoc arrangement. That is, as and when a bank wants to offer a product to its customers, it can tie up with an insurance company. But nothing will happen before the Insurance Regulatory Authority (IRA) Bill is passed.Similarly, Pawan Kumar Verma, senior divisional manager, LIC, saysthat there hasn't been any tie-ups yet. But bankers are aiming at it, he adds.Speaking on the retailing of insurance products, Sher Singh, banking and consumer analyst, Consult Opportune (India's first consumer banking advisory service), says that among the banks that have an excellent chance in the field of insurance are State Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, Bank of India, Dena Bank, ANZ Grindlays, American Express, Citibank, Standard Chartered, ICICI Bank, HDFC Bank, Global Trust Bank, TimesBank, IDBI Bank, Vysya Bank and ABN AMRO Bank.

In the midst of all this competition, customers are likely to benefit in a big way, according to Singh. With the advent of the new era, more sophisticated insurance products, which will be customised and tailored to suit the customer, will be introduced, says Singh. Among the other predictions that this analyst makes are that rates of return will be higher than what is offered currently and customer protection will be stronger.Elaboratingon cost, he says that the pricing will be market-driven and premiums will be lower. Another significant point that he makes in the context of cost is that premium and maturity value will be inflation linked.Apart from cost, Singh says that the new system will provide enhanced convenience for the customer through the use of information technology in distribution channel management. Also, the average time for claim settlements will come down, he adds. Another important concept that is likely to hit the market is combined packages for insurance and retail finance schemes for consumer products.

Does all this mean that the character of insurance will undergo a change? Singh says: ``In my perception, insurance will undergo a change in character, owing to several factors.'' The first of these factors is cross-selling of retail finance and card products through insurance retailing. Also making a difference to insurance as a whole will be the wide choice for consumers in the selection of products and serviceproviders and more varied distribution channels.

Singh continues: ``Mass marketing will emerge as the most critical function in retailing insurance products.'' Also significant will be technology induction for marketing initiatives, product development, product pricing and control of costs, he says. Plus, he offers a new connotation to selling and buying insurance. He says that the retailing of insurance products by banks will lead to such products being proactively sold, rather than being bought.

More important, insurance products will be increasingly viewed as a necessity, rather than a luxury. Along with that, penetration of insurance products will increase manifold, across various segments of the population, Singh adds.

On whether the rush will be for life insurance or general insurance products, Singh says: ``In my view, as we usher in the era of universal banking, banks would prefer to enter the life insurance segment.'' It's in keeping with banks attempting to place themselves as financialsupermarkets. He explains that long-term funds through life insurance will assist banks to finance long-term projects, infrastructure projects and housing finance, which essentially require long-term financial resources. ``In addition, retailing insurance products will enable banks to offer an entire gamut of retail products under one roof, thus focussing on customer longevity and retention,'' he says.

Among the gainers will be banks issuing credit cards. According to Singh, these banks will do well in insurance retailing as they can leverage their databases to sell such products. In the changed scenario then, what will happen to the sale of insurance products through agents? Replies Singh: ``Considering the fact that only 20 per cent of the insurable population is insured in India, buying of insurance through agents will continue.''Finally, how will the competition between banks and insurance companies impact the larger interest? Says Singh: ``Considering the low levels of insurance penetration in India,competition between banks and insurance companies is a very fortunate development.''

Not only will the new trend improve insurance penetration in the country, it will also bring about awareness and mass marketing initiatives for such products, where the customer is of central concern, states Singh.