Bancassurance agreements

• Insurance regulator IRDAI has allowed the four banks, emerging from the recent mega bank merger exercise, to continue for a year with existing bancassurance agreements of the lenders that amalgamated with them.

About:

• Bancassurance means selling insurance products through banks. Banks and insurance companies come up in a partnership wherein the bank sells the tied insurance company’s insurance products to its clients.

• On the one hand, the bank earns fee amount (non-interest income) from the insurance company apart from the interest income whereas, on the other hand, the insurance firm increases its market reach and customers.