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Recent surveys of Indian savers show that they perceive insurance as a 'savings' product rather than as a risk management product There lies the rub.

If insurance is indeed viewed as a savings instrument, the insurer's products compete directly with term deposits facilities that banks offer and there could be conflict of interest. Thus branchbankers might not have any incentive, indeed have a negative incentive, in promoting insurance products. Even if there is no direct competition between the banks and the insurance product portfolios, bankers under the current structure might not find it in his interest to hard-sell insurance. Lack of familiarity with insurance products could be another deterrent.

Another potential source of conflict arises in a configuration where the insurance company is promised by an international bank that might have non-insurance business interest in India. In such an instance the domestic partner bank of the insurance company might find it strategically necessary to hold bank sensitive customer information.

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E. Jeevitha,
Faculty,
Department of Management Studies and research,
Tamilnadu College of Engineering, Coimbatore.