BoM, LIC in bankassurace venture

Bank of Maharashtra (BOM) has signed a memorandum of understanding (MoU) with Life Insurance Corporation of India (LIC) for the distribution of LIC products under bankassurance tie up.

"Initially we are going to make the scheme available in select 200 branches of BOM and we would be expanding the service to about 500 odd branches within two years. We are expecting an income of around ten crore during first year of operation," said Ashok Dugade, executive director, BOM.

We will shortly be enter in to a tie up with United India Insurance Company for non life Insurance products such as accident insurance policy, fire insurance policy, mediclaim etc. We are expecting to finalise the matter within a month," said Ashok Dugade, executive director, BOM.

"The logic underlying bankassurance is the utilisation of business synergies and economies of scale between products and services of banks and insurance companies and their reliance on high volume requiring sales and marketing strategies," said Dugade.

"We are creating an indigenous marketing structure to support the banking sector in India. This is our 35 th tie up for bankassurance. Earlier we had tied up with eight public sector banks, four private sector banks and 22 cooperative banks for bankassurance. Last year we have generated around Rs 200 crore in the form of premium income through alternate channels and we are expecting at least 20 per cent increase in the contribution of bankassurance to this three years," said S Viswanathan, executive director, Life Insurance Corporation of India.

"We are planning to enter into a big venture to cover the fairly under tapped Micro Insurance sector. We are planning to approach this segment with the help of rural banks, rural branches of banks and NGOs," said Viswanathan.