INTRODUCTION

The business of banking around the globe is changing due to integration of

global financial markets, development of new technologies, universalization of banking

operations and diversification in non-banking activities. Due to all these movements, the

boundaries that have kept various financial services separate from each other have

vanished. The coming together of different financial services has provided synergies in

operations and development of new concepts. One of these is bancassurance.

Bancassurance simply means selling of insurance products by banks. In this

arrangement, insurance companies and banks undergo a tie-up, thereby allowing banks to
sell the insurance products to its customers. This is a system in which a bank has a
corporate agency with one insurance company to sell its products. By selling insurance
policies bank earns a revenue stream apart from interest. It is called as fee-based income.
This income is purely risk free for the bank since the bank simply plays the role of an
intermediary for sourcing business to the insurance company.

It has its genesis decades ago in France, where this channel today is the
predominant source of insurance business. It has grown at different places and taken
shapes and forms in different countries depending upon demography, economic and
legislative prescription in that country. In some countries, bancassurance is still largely
prohibited, but it was recently legalized in countries such as the United States, when the
Glass-Steagall Act was repealed after the passage of the Gramm-Leach-Bliley Act.

Bancassurance is a new buzzword. It originated in India in the year 2000.

Following the recommendations of First Narasimham Committee, the contemporary
financial landscape has been reshaped. Thus, present-day banks have become far more
diversified than ever before. Therefore, their entering into insurance business is only a
natural corollary and is fully justified too as ‘insurance’ is another financial product
required by the bank customers.

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 From the view point of insurance industry also the importance of bancassurance
was felt necessary. With the increased pressures in combating competition, companies are
forced to come up with innovative techniques to market their products and services. At
this juncture, banking sector with it's far and wide reach, was thought of as a potential
distribution channel, useful for the insurance companies. That’s where the bancassurance
came into existence. Thus, bancassurance is poised to become a key determinator /
differentiating factor in the Insurance industry as well.

Given India’s size as a continent it has, however, a very low insurance penetration
and low insurance density. The penetration level of life insurance in the Indian market is
abysmally low at 2.3% of GDP with only 8% of the total population currently insured. As
opposed to this, India has a well-entrenched wide branch network of banking system,
which only few countries in the world could match with. It is predicted by experts also
that in future 90% of share of premium will come from Bancassurance business only. And
almost half of the population likely to be in the 'wage earner' bracket by 2010 that there is
every reason to be optimistic that bancassurance in India will play a long inning.

Currently there are more and more exchange of wedding rings between banks and
Insurance Company for better business prospect in future. With the enoromous benefits
for banks like increase in revenue, return on asset, customer retention, better reputation
etc., the bancassurance is going to be a big revolution in the banking industry. It is against
this backdrop an attempt is made to analyse the financial performance of the AXIS bank
in bancassurance so far and to find out the areas where they can make use of and still need
to focus in order to make AXIS bank to play a vital role in the bancassurance industry.

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MEANING, DEFINITION AND CONCEPT
MEANING:

Bancassurance is a combination of two words ‘Banc’ and ‘assurance’

signifying that both banking and insurance products and service are provided by one
common corporate entity or by banking company with collaboration with any particular
Insurance company. In concrete terms bancassurance, which is also known as Allfinanz -
describes a package of financial services that can fulfill both banking and insurance needs
at the same time.

It is the provision of insurance (assurance) products by a bank. The usage of the

word picked up as banks and insurance companies merged and banks sought to provide
insurance, especially in markets that have been liberalized recently. In its simplest form,
Bancassurance is the distribution of insurance products through the Bank’s distribution
network.. It is a phenomenon wherein insurance products are offered through the
distribution channels of the banking services along with a complete range of banking and
investment products and services. Bancassurance tries to exploit synergies between both
the insurance companies and banks.

DEFINITION:

The term first appeared in France in 1980, to define the sale of insurance products
through banks’distribution channels (SCOR 2003).

The Life Insurance Marketing and Research Association’s (LIMRA’s) insurance

dictionary defines bancassurance as “the provision of Life insurance services by banks
and building societies”.

According to IRDA, ‘bancassurance’ refers to banks acting as corporate agents

for insurers to distribute insurance products.” Literature on bancassurance does not
differentiate if the bancassurance refers to selling of life insurance products or non-life
insurance products.Accordingly, ‘bancassurance’ is defined to mean banks dealing in

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insurance products of both life and non-life type in any forms.But in this research the
focus is entirely concentrated towards life insurance. It is also important to clarify that the
term bancassurance does not just refer specifically to distribution alone. Other
features, such as legal, fiscal, cultural and/or behavioural aspects also form an
integral part of the concept of bancassurance (SCOR 2003).

There are many definitions of bancassurance and, in essence it does depend upon
the model used, and the stage of development. However, the definition of a fully
developed model that is most commonly used is: “'Manufacturing and distributing cost
effectively banking and insurance products to a common customer base”.

CONCEPT:
This concept gained importance in the growing global insurance industry
and its search for new channels of distribution.However, the evolution of
bancassurance as a concept and its practical implementation in various parts of the
world, have thrown up a number of opportunities and challenges.
Bancassurance is a relatively new concept in the global stage. Unlike banks and
insurers which have been around in one form or another for centuries, bancassurance has
only been around for a few decades. The concept of bancassurance was emerged in the
western world when banks began to get involved in marketing of insurance business. From
a purely historical perspective, many regard Barclay’s Life, set up in 1965 in the UK as an
insurance subsidiary of the eponymous bank, as the pioneer of bancassurance. But the
term bancassurance came into existence in France after 1980 to define the sale of
insurance through an intermediary bank.

It has reared its head in France in the late 1970’s,motivated by among other things
changing customer needs due to an inadequate pension scheme that existed at that time.
As the governments can no longer maintain the funding that people have begun to take a
more active role in their future entitlements by looking at alternatives to pensions.
Bancassurance provides not only provides an alternative to pensions but also caters to the
current taste of customers, which is no longer satisfied by the traditional products offered

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by the insurers. As bancassurance allowed the banks to move away from income generated
by the interest spreads it is viewed as a solution to alleviate the problem of poor consumer
savings, squeezed margins. Thus lackluster pension schemes, poor consumer savings,
squeezed margins, the need for one stop shop delivery for all financial services among the
consumers, increasing importance of strategic alliance has all led to the growth of
bancassurance in Europe. With the success of bancassurance model in Europe, the
bancassurance, which was only a European phenomenon, is becoming popular in other
continents also

Bancassurance seems to have made the greatest impact in France. Almost 100% of
the banks in France are selling insurance products. It is claimed that the 55% to 60% of
the life insurance business in France had come through banks. In Portugal and Spain it
was over 70%. In U.K it is about 30%. In Argentina, Brazil, Chile, Colombia and Mexico
also the bancassurance is becoming popular. Hardly 20 % of the United states banks are
selling insurance products as only recently the Glass steagell act was repealed which has
prohibited the banks from entering into the financial services. In Asia: Singapore, Taiwan
and Hong Kong have surged ahead in Bancassurance then that with India and China
taking tentative step forward towards it. In Middle East, only Saudi Arabia has made some
feeble attempts that even failed to really take off or make any change in the system.

RELEVANCE OF BANCASSURANCE IN THE INDIAN FINANCIAL SECTOR

i)) Integration of the financial service industry in terms of banking, securities business and
insurance is a growing worldwide phenomenon. The Universal Banking concept is
evolving on these lines in India.

ii) Banks are the key pillars of India’s financial system. Public have immense faith in
banks.

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iii) Share of bank deposits in the total financial assets of households has been steadily
rising.

iv) Indian Banks have immense reach to households. Total of 65700 branches of
commercial banks, each branch serving an average of 15,000 people.

v) Banks enjoy considerable goodwill and access in the rural regions.There are 32600
branches in rural India (about 50% of total), and 14400 semi-urban branches, where
insurance growth has been most buoyant.196 exclusive Regional Rural Banks in deep
hinterland.

vi) Banks have enormous retail customer base.Share of ‘individuals’ as a category in bank
accounts is steadily increasing.Rural and semi urban bank accounts constitiute close to
60% in terms of number of accounts,indicating the number of potential lives that could be
covered by insurance with the upfront involvement of banks.

vii) Banks world over have realized that offering value-added services such as insurance,
helps to meet client expectations. Competition in the Personal Financial Services area is
getting `hot’ in India that Banks can retain customer loyalty by offering them a vastly
expanded and more sophisticated range of products. Insurance distribution can also help
the bank to increase the fee-based earnings to a large extent.

viii) Fee-based selling helps to enhance the levels of staff productivity in banks.
This is vitally important to bring higher motivation levels in banks in India.

ix) Banks can put their energies into the small-commission customers’ that insurance
agents would tend to avoid. Banks’ entry in distribution can help to enlarge the insurance
customer base rapidly. This helps to popularize insurance as an important financial
protection product.

x) Bancassurance helps to lower the distribution costs of insurers. Acquisition cost of

insurance customer through bank is low. Selling insurance to existing mass market
banking customers is far less expensive than selling to a group of unknown customers.

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 Experience in Europe has shown that bancassurance firms have a lower expense ratio.
This benefit could go to the insured public by way of lower premiums.

xi) Banks have an important role to play in the pension sector when deregulated.Low cost
of collecting pension contributions is the key element in the success of developing the
pension sector. Money transfer costs in Indian banking is low by international
standards.Portability of pension accounts is a vital requirement which banks can fulfill, in
a credible framework.

REASONS FOR BANKS TO ENTER INTO BANCASSURANCE

The main reasons why banks have decided to enter the insurance industry area are
the following:

 Intense competition between banks, against a background of shrinking interest margins,

has led to an increase in the administrative and marketing costs and limited the profit
margins of the traditional banking products. New products could substantially enhance the
profitability andincrease productivity.
 Financial benefits to a bank performance can flow in a number of ways, as briefly
outlined below:
- Increased income generated, in the form of commissions
and/or profits from the business (depending upon the relationship)
- Reduction of the effect of the bank fixed costs, as they are
now also spread over the life insurance relationship.
- Opportunity to increase the productivity of staff, as they now
have the chance to offer a wider range of services to clients

 Customer preferences regarding investments are changing. For

medium-term and long-term investments there is a trend away from deposits and toward
insurance products and mutual funds where the return is usually higher than the return on
traditional deposit accounts.This shift in investment preferences has led to a reduction
in the share of personal savings held as deposits, traditionally the core element of
profitability for a bank which manages clients money. Banks have sought to offset some

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of the losses by entering life insurance business.Life insurance is also frequently supported
by favourable tax treatment to encourage private provision for protection or retirement
planning. This preferential treatment makes insurance products more attractive to
customers and banks see an opportunity for profitable sales of such products.
 Analysis of available information on the customer financial and
social situation can be of great help in discovering customer needs and promoting or
manufacturing new products or services.Banks believe that the quality of their client
information gives them an advantage in distributing products profitably, compared with
other distributors (e.g. insurance companies).
 The realization that joint bank and insurance products can be better
for the customer as they provide more complete solutions than traditional standalone
banking or insurance products.
 Banks are experiencing the increased mobility of their customers,
who to a great extent tend to have accounts with more than one bank. Therefore there is a
strong need for customer loyalty to an organization to be enhanced.
 Client relationship management has become a key strategy. To
build and maintain client relationships,banks and insurers are forming partnerships to
provide their clients with a wide range of bank and insurance products from one source.
 It is believed that as the number of products that a customer
purchases from an organization increases the chance of losing that specific customer to
a competitor decreases.

WHY IS BANCASSURANCE MORE SUITED TO LIFE INSURANCE

PRODUCTS?

Traditionally, much fewer non-life insurance products are distributed through

bancassurance than life insurance products. There are several reasons for this:

✔ The main reason may be the complementary nature of life insurance and banking
products: bank employees are already familiar with financial products and quickly adapt
to selling insurance-based savings or pension products;

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✔ On the other hand, the non-life market requires special management and selling skills,
which are not necessarily prevalent in bancassurance. In addition, such competencies
require significant investment in training and motivation, and therefore additional costs;

✔ Life insurance products are generally long-term products, which require customers to
have complete confidence in the institution that invests their money. And we now know
that, in many countries, banks have a better image and are more trusted than insurance
companies;

✔ Bank advisers can use their knowledge of their customers’ finances to target their
advice towards specific needs. This is a major advantage in life insurance and less
important in personal injury insurance;

✔ Some professionals also refer to the claims management aspect of personal injury
insurance, which could have a negative impact on brand image. This would seem to
explain why for a long time bancassurance operators hesitated to offer these types of
product.

ADVANTAGES OF BANCASSURANCE:

Everybody is a winner in bancassurance. For banks it mainly acts as a means of

product diversification and additional fee income; for insurance company it acts as a tool
for increasing their market penetration and premium turnover and for customer it acts as a
bonanza in terms of reduced price, high quality products and delivery to doorsteps. Hence
it is a win-win solution for everyone who involved.

To the bankers:

 In a situation of constant asset base the bank can increases Return on Assets
(ROA)by increasing their income, by selling insurance products through their own
channel. It can cover operating expenses and make operating expenses profitable by
leveraging their distribution and processing capabilities

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 Can leverage on face-to-face contacts and awareness about the financial
conditions of customers to sell insurance products.
 By acting as a one stop shop for all financial services, they can
improve overall customer satisfaction resulting in higher customer retention levels
 Banks enjoy significant brand awareness within their geographical region
providing for a lower per lead cost when advertising through print, radio and television.
The advantage of a bank over traditional distributors is the lower cost per sales lead made
possible by their sizeable loyal customer base.
 Can establish sales oriented culture among the employees

To the customers:

 Comprehensive financial advisory services under one roof. i.e., insurance

services along with other financial services such as banking, mutual funds, personal
loans etc.
 Enhanced convenience on the part of the insured
 Easy access for claims, as banks is a regular go.
 Innovative and better product ranges

To the insurers:

 Insurers can exploit the banks' wide network of branches for distribution of
products. The penetration of banks' branches into the rural areas can be utilized to sell
products in those areas.
 Customer database like customers' financial standing, spending habits,
investment and purchase capability can be used to customize products and sell
accordingly.
 Since banks have already established relationship with customers, conversion
ratio of leads to sales is likely to be high. Further service aspect can also be tackled easily.

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 Factors that appear to be critical for the success of bancassurance are

 Strategies consistent with the bank's vision, knowledge of target

customers' needs, defined sales process for introducing insurance services, simple
yet complete product offerings, strong service delivery mechanism, quality
administration, synchronized planning across all business lines and subsidiaries,
complete integration of insurance with other bank products and services
 Another point is the handling of customers. With customer awareness levels
increasing, they are demanding greater convenience in financial services.
 The emergence of remote distribution channels, such as PC-banking and
Internet-banking, would hamper the distribution of insurance products through banks.
 The emergence of newer distribution channels seeking a market share in the
network.

Bancassurance training for bank employees:

The bank employees will need to be trained in the following aspects of the insurance
business:
 Features of the insurance products sold
 How to identify and approach a potential customer
 Basic insurance needs
 Handling basic objections
 Other distribution channels and products
 Expected roles
 Procedures
 Remuneration and incentive schemes
 Cultures
 Customer service
Continuous training and supervision:

Apart from initial training, there should be further training to support the
development of the agent or employee. Some ways in which this can be done are:

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  Agency meetings
 Bank branch meetings
 Area banking meetings
 In-house magazine
 Training circulars
 Area sales seminars
 Company library
 Video tapes
 Certified courses
 Lectures
 Training material booklets

Remuneration of bank employees:

Any commission payable by the insurance company is, as a principle, to be

credited to the bank profit center for the bancassurance operation. The bank management
sets the commission level for each manager and employee engaged in the bancassurance
operation.
 Selling in the bank branches (by employees or by financial advisers): For
simple packaged products: employees could be rewarded with gifts and/or salary
increments based on their selling performance in promoting both banking and insurance
products. Such performance could be quantified via the use of a points system where by
the various products are allocated as a number of points.
 Warm leads: In return for providing warm leads, the bank will get a share,
say 50%, of the normal first year commissions.

A basis is needed for allocating this amount between branch staff (who provide
the warm leads) and the bank owners. A possible basis would be:
25% 25% 50%.

The structure shown above generates benefits as follows:

 Financial rewards for employees who generate warm leads

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 Financial rewards for managers and other staff of the bank branch who
have supported bank activities while the assurance business was being generated.
Group awards or bonuses are more desirable when the contribution of the
individual employee is either difficult to distinguish or depends on group cooperation.

A) NEED FOR THE STUDY

Today’s banking business is not the one we have seen in the past. It has become
much more diversified. With the shift in the customer preferences from deposits to
investments, intense competition etc., the banks saw their profit margin declining. Thus it
has become imperative for the banks to retain the customer by providing more value
added services under one roof as well as to find alternative ways to generate more income.
As bancassurance provides the best possible solution to all these, most of the banks
nowadays have started selling insurance products to its customers. AXIS bank is also
having a tie up with Bajaj Allianz Life Insurance for selling Life insurance products to its
retail customers. Hence there is a need for the study to know whether AXIS bank has been
benefited out of bancassurance by way of financial analysis and to suggest the areas where
they can make use of and converge the attention of the bank if any, is required.

1.2 B) STATEMENT OF THE PROBLEM

To understand the financial impact of bancassurance in AXIS bank and to

suggest the ways and means to improve the existing performance by way of collecting
responses from the customers.

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 C) BENEFITS TO THE ORGANIZATION

• Through the study the bank can know its financial performance in
bancassurance and whether it is contributing to the overall progress of the bank or not.
• The study would enable AXIS bank to know the general opinion of
customers about insurance and bancassurance so as to know whether any awareness need
to be created about the same.
• The study would enable AXIS bank to know how far their initiatives in promoting
Bajaj Allianz life Insurance products have reached its customers.
• It would also enable the bank to know whether they have established a strong
relationship with the customers, as it is important for bancassurance.
• It would also enable the bank to know the number of persons who are planning to
take a life insurance policy in their near future so that it can take the advantage of the
same.
• The bank can also know the willingness of the customers in accepting AXIS bank
as their distribution channel in case of obtaining Bajaj Allianz Life Insurance policy in
future.
• Finally, it provides the opportunity for the bank to know the areas where they need
to give much emphasis and uplift themselves in order to occupy a key role in the area of
bancassurance.

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 1.2 D) SCOPE OF THE STUDY

 The study focuses on the financial performance of AXIS bank in bancassurance and
its contribution to the overall progress of the bank with respect to life insurance alone.

 The study analyses the awareness of the customer and the viewpoints of the customer
about insurance as well as bancassurance.

 The study also measures the initiatives taken by AXIS bank in endorsing Bajaj
Allianz Life insurance products.

 The study also throws light on the relationship building by AXIS bank with its
customers, as it is the deciding factor for considering the bank as a one-stop shop for all
their financial solutions.

 It also indicates the persons who are willing to take life insurance policy in the
immediate future and the reasons for taking the same.

 It also pinpoints the willingness of the customer in accepting AXIS Bank, as their
distribution channel, in case of their choice is Bajaj Allianz Life Insurance for obtaining a
policy

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 1.2 OBJECTIVES OF THE STUDY

Primary objective:
It is to make an analysis on the financial performance of AXIS bank
in bancassurance with specific reference to life insurance and to suggest the ways and
means to improve the existing performance by way of collecting responses from the
customers.

Secondary Objectives:
.
 To analyze the financial performance of AXIS bank in bancassurance and its
contribution to the overall progress of the bank using ratio analysis.
 To analyze the initiatives taken by the AXIS bank in endorsing the Bajaj Allianz
Life Insurance products.
 To assess the relationship building factors of AXIS bank, which is significant for
bancassurance.
 To know the customer preferences in selecting AXIS bank as a distribution
channel in case of their willingness to obtain Bajaj Allianz Life Insurance policy in future.

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 1 .4 LIMITATIONS OF THE STUDY

 Time has played a biggest constraint that the research could not be carried
out comprehensively as the duration of the study was only 3 months.

 As the research contains the Secondary data for making a financial analysis the
accuracy and reliability of the analysis depends on reliability of figures derived from
financial statements.

 The sample size for collecting the primary data was meager as it includes only
100 respondents, hence the conclusion would not be a universal one.

 Personal biases and prejudices of the customers may also affect the study.

Inspite of the limitations, the study was effective in analyzing the performance of
AXIS bank in bancassurance with specific reference to life insurance.

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 1.5 A) INDUSTRY PROFILE

Banks are among the main participants of the financial system in India. Banks in
India can be categorized into non-scheduled banks and scheduled banks. Scheduled banks
constitute of commercial banks and co-operative banks. In terms of ownership,
commercial banks can be further grouped into nationalized banks, the State Bank of India
and its group banks, regional rural banks and private sector banks (the old/ new domestic
and foreign).

During the first phase of financial reforms, there was a nationalization of 14 major
banks in 1969. This crucial step led to a shift from Class banking to Mass banking. Since
then the growth of the banking industry in India has been a continuous process. It has
become an important tool to facilitate the development of the Indian economy.

During the second phase of reforms, in the early 1990s, the then Narasimha Rao
government embarked on a policy of liberalisation and gave licences to a small number
of private banks, which came to be known as New Generation tech-savvy banks, which
included banks such as UTI Bank(now re-named as Axis Bank) (the first of such new
generation banks to be set up), AXIS Bank andICICI Bank. This move, along with the
rapid growth in the economy of India, kickstarted the banking sector in India, which has
seen rapid growth with strong contribution from private banks and foreign banks.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector

banks (that is with the Government of India holding a stake), 29 private banks (these do
not have government stake; they may be publicly listed and traded on stock exchanges)
and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000
ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks
hold over 75 percent of total assets of the banking industry, with the private and foreign
banks holding 18.2% and 6.5% respectively. There are 70324 bank offices in India and

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each bank office serves around 16000 people. It’s a huge banking infrastructure and
among best banking network in world.

Current scenario:

As far as the present scenario is concerned the banking industry is in a transition

phase. The Public Sector Banks, which are the mainstay of the Indian Banking system
account, are unfortunately burdened with excessive Non Performing assets massive
manpower and lack of modern technology. while on the other hand the private sector
banks are consolidating themselves through mergers and acquisitions.

On the other hand the Private Sector Banks in India are witnessing immense
progress They have pioneered Internet banking, mobile banking, phone banking, ATMs.
etc., They are forging ahead and rewriting the traditional banking business model by way
of their sheer innovation and service.

The banks today are more market driven and market responsive. The top
concern in the mind of every bank's CEO is increasing or at least maintaining the
market share in every line of business against the backdrop of heightened competition.
With the entry of new players and multiple channels, customers have become more
discerning and less "loyal" to banks. This makes it imperative that banks provide best
possible products and services to ensure customer satisfaction. To address the challenge
of retention of customers, there have been active efforts in the banking circles to
switch over to customer-centric business model. The success of such a model depends
upon the approach adopted by banks with respect to customer data management and
customer relationship management.

There has been an increase in the bank focus on retail segment with the economic
slow down. Retail banking has become the new mantra for banking industry. Banks
are now realizing that one of their best assets for building profitable customer
relationships especially in a developing country like India is the branch. Branches are in
fact a key channel for customer retention and profit growth in rural and semi-urban set up..

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Branches could also be used to inform and educate customers about other, more efficient
channels, to advise on and sell new financial instruments like consumer loans, insurance
products, mutual fund products, etc.

Thus, all the above led to the practice of bancassurance. The Reserve Bank of
India being the regulatory authority of the banking system, with the reorganization of
the need for banks to diversify their activities at the right time, permitted them to enter
into insurance sector as well. It has issued a set of detailed guidelines setting out various
ways for a bank in India to enter into insurance sector.

IRDA has also felt the necessity of introducing an additional channel of

distribution, which is the Bancassurance to reach out more people. It started picking up
after Insurance Regulatory and Development Authority (IRDA) passed a notification in
October 2002 on 'Corporate Agency' regulations.

Legal Requirements: In India, the banking and insurance sectors are regulated by two
different entities (banking by RBI and insurance by IRDA) and bancassurance being the
combinations of two sectors comes under the purview of both the regulators. Each of the
regulators has given out detailed guidelines for banks getting into insurance sector.
Highlights of the guidelines are reproduced below:

RBI guideline for banks entering into insurance sector provides three options for banks.
They are:

 Joint ventures will be allowed for financially strong banks wishing to undertake
insurance business with risk participation;
 For banks which are not eligible for this joint-venture option, an investment
option of up to 10% of the net worth of the bank or Rs.50 crores, whichever is lower, is
available;
 Finally, any commercial bank will be allowed to undertake insurance business as
agent of insurance companies. This will be on a fee basis with no-risk participation.

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 The Insurance Regulatory and Development Authority (IRDA) guidelines for the
bancassurance are:

 Each bank that sells insurance must have a chief insurance executive to handle all
the insurance activities.
 All the people involved in selling should under-go mandatory training at an
institute accredited by IRDA and pass the examination conducted by the authority.
 Commercial banks, including cooperative banks and regional rural banks, may
become corporate agents for one insurance company.
 Banks cannot become insurance brokers.

Currently there has been an increase in the number of tie-ups with banks and insurance
companies. Some of the models practiced by the banks in India are I) Referral model ii)
Corporate agency model iii) Insurance as a fully integrated model etc.,

Some of the Bancassurance tie-ups in India are as follows:

TABLE 1.1: SOME OF THE BANCASSURANCE TIE-UPS IN INDIA

Insurance Company Bank
Bank of Rajasthan, Andhra Bank, Bank of Muscat,
Birla Sun Life Insurance Co. Ltd. Development Credit Bank, Deutsche Bank and Catholic
Syrian Bank
Dabur CGU Life Insurance CompanyCanara Bank, Lakshmi Vilas Bank, American Express
Pvt. Ltd Bank and ABN AMRO Bank
HDFC Standard Life Insurance Co.
HDFC bank, Union Bank of India, saraswat bank.
Ltd.

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 Lord Krishna Bank, ICICI Bank, Bank of India, Citibank,
ICICI Prudential Life Insurance Co
Allahabad Bank, Federal Bank, South Indian Bank, and
Ltd.
Punjab and Maharashtra Co-operative Bank.
Corporation Bank, Indian Overseas Bank, Centurion
Bank, Satara District Central Co-operative Bank, Janata
Life Insurance Corporation of India
Urban Co-operative Bank, Yeotmal Mahila Sahkari Bank,
Vijaya Bank, Oriental Bank of commerce.
Met Life India Insurance Co. Ltd. Karnataka Bank, Dhanalakshmi Bank and J&K Bank
SBI Life Insurance Company Ltd. State Bank of India
Bajaj Allianz General Insurance Co.
Karur Vysya Bank and Lord Krishna Bank
Ltd.
Royal Sundaram General InsuranceStandard Chartered Bank, ABN AMRO Bank, Citibank,
Company Amex and Repco Bank.
United India Insurance Co. Ltd. South Indian Bank

Thus, the present day banks are more diversified than ever before. They cannot
restrict themselves to traditional banking. As bancassurance prospects in India are
brighter that banks in India can make use of the situation to gain profitable business
venture.

1.5 (B) COMPANY PROFILE

About AXIS BANK:

Axis Bank was established in 1993 and was the first private sector bank to
start operations after the Government of India allowed entry of private banks. Previously
called UTI Bank, Axis Bank was promoted by Unit Trust of India (UTI-I), Life Insurance
corporation of India (LIC), General Insurance Corporation (GIC) and its four subsidiaries,
New India Assurance Company, Oriental Insurance Corporation, National Insurance
Company and United Insurance Company. The name of the Bank was changed in 2007 as
there was brand confusion because many unrelated shareholder entities such as UTI
Securities, UTI Technological Service and UTI Investor Services were also sharing the

22
UTI brand. Moreover, the name was changed to connote stability and solidarity as well as
was in line with the bank’s expanding operations across geographical boundaries. Staring
with one branch in Ahmedabad in 1994, the bank now has 835 branches including
extension networks (31st March 2009) across 30 States and 4 Union Territories. The bank
also has overseas offices in Singapore, China, Hongkong and Dubai.

The bank's broad products and services include consumer banking, NRI business, retail
loans, corporate banking, treasury, capital markets and financial advisory services. It
divides its business into five segments viz. large corporates, SMEs, agri-business, channel
financing and structured products. The bank's retail assets constituted 23 per cent of total
advances at the end of March 2008. Housing loans accounted for 57 per cent of total retail
assets. Auto loans constituted 7 per cent of its retail loans

The bank divides its advances into three focus areas i.e. agricultural, mid--corporate and
SMEs. During 2007--08, the bank's agricultural advances grew by 35 per cent to Rs.5,507
crore. Its advances to SMEs reported a whopping 74 per cent growth to Rs.11,536 crore.

The bank maintains a healthy asset quality with 81 per cent of its corporate advances
having a rating of at least `A' as at the end of March 2008. The bank pruned its net
stressed assets consistently from 1.92 per cent in 2002--03 to 0.36 per cent by end of
2007--08.

Axis Bank Ltd.

Subsidiaries Axis Private Equity Ltd.
Axis Sales Ltd.
Axis Trustee Services Ltd.

Consistent growth: The bank’s net profit has grown by over 30% YoY in 36 out of the
last 38 quarters. Also the two quarters in which the profit did not grow was on account of
write-off of extraordinary items (G-Sec valued on mark to market basis). The net profit
has grown by over 60% YoY in each of the last eight quarters. The important performance
indicators such as ROA, CAR, NPA and NIM have remained strong over the last five

23
years. Axis Bank comes very near to HDFC Bank in terms of important efficiency
parameters. As can be from the table above, the share of current account saving account
deposits in the total deposits (CASA) is higher in case of HDFC Bank. Also HDFC Bank
scores higher in terms of margins (NIM). However, looking at the returns generated on
networth (ROE) and the growth in advances and deposits, Axis Bank appears to be
gearing up well to reduce the gap existing in the margins as well as the total balance sheet
size.

Expanding footprint, expanding balance sheet: The bank has continued to expand its
geographical coverage across the country. Over the last five years, the total number of
branches including extension centers of the bank has increased from 339 in FY05 to 835
in FY09 whereas ATMs have increased from 1,599 to 3,595. Also during Q1FY10, the
bank added 26 new branches including extension centers and 128 ATMs. This has helped
the bank particularly in the acquisition of low cost retail deposits, retail assets, lending to
agriculture, SME and mid-corporates as also the sale of third-party products. The bank’s
balance sheet has increased at a CAGR of 43.65% over the last five years

Key Positives

• Market leadership position in the travel card segment

• Market leader in the prepaid cards segment
• Second largest merchant acquirer in the country
• Leadership position in private placement of bonds and debentures till 31st
December 2008
• High quality of its assets
• The Bank’s Non-Performing Assets (NPAs) are among the lowest in the industry.

Post its rebranding exercise in 2007 the bank has continued to do well and the change in
name has not affected the bank’s business. In fact in FY2008 it saw its customer
acquisition grow at a robust rate of 67% over the last year to over 9.9 million customer
accounts

The above business groups are supported by the following groups:

24
 Audit & Compliance
 Credit & Market Risk
 Finance, Administration & Legal
 Human Resources
 Information Technology
 Operations

25
 2.0 REVIEW OF LITERATURE

2.1 Bancassurance - A Global Breakdown:

It is important to outline the impact that bancassurance has had on differing
regions around the world, as well as looking at the major regulations that impact the
further growth of bancassurance. Below, is provided with a brief synopsis of
bancassurance markets in certain key areas.

EUROPE:
Bancassurance is a construct of Europe (France in particular) and this perhaps
helps explain why it is such a phenomenal success within certain European markets.
Largely the 1989 Second Banking Coordination Directive motivated the large influx of
banks into insurance within Europe in recent years. Currently, the penetration levels are
fairly stable in Europe, since bancassurance in the majority of Western European countries
(France, Netherlands, Portugal and Spain) has reached what studies such as Swiss Re.
(2002) argue to be maturity. These penetration levels will only pick up once
bancassurance manages to fully infiltrate Central and Eastern European countries such as
Hungary and Poland, and the Baltic nations. Currently, the final major hurdle for
bancassurance in Western Europe seems to lie in the U.K. where a predominantly strong
insurance board still attempts to resist the bancassurance trend even in the face of
widespread deregulations.

FRANCE:
In France, the success of bancassurance is mitigated by a favorable tax treatment
on life insurance products, lack of competition within the insurance industry, and an
inadequate pension scheme (Bonnet and Arnal (2000). The pioneer of bancassurance in
France is argued to be Credit Mutual, which created its own life and non-life subsidiaries
in the early 1970’s (Sakr (2001)).

26
Bancassurance has seen the most success in the life insurance market, something that is
true for every nation, increasing from 52% in 1995 to account for 69% of life insurance
business n 2000 (Durand (2003), and Turner (1998)). However, as of late, the banking
networks market share of the life insurance market has remained fairly stagnant, actually
dropping over the years to 66% market share in 2001 and 61% in 2003 (Falautona and
Marsiglia (2003), Datamonitor (2003)). This resulted from a combination of falling stock
market prices and the banking network bearing the brunt of lower transfer prices
according to Benoist (2002).

This means that banking and insurance companies are overseen separately within
the country. For a conglomerate, the regulator will depend on who is the parent of the two.

UNITED KINGDOM:
Bancassurers have faced a tougher time in trying to penetrate the U.K. market,
thanks in large to a combination of restrictive regulations and a powerful insurance
governing body. The first move for bancassurers came in 1985 when Standard Life
purchased a stake in the Bank of Scotland. Changes in legislation soon followed in 1986
and 1988, which made it legal for banks to market insurance products and set up their own
insurance subsidiaries (Sakr (2001)). Even then, the main type of union between the two
was a joint venture, since the banks placed an emphasis on maintaining the knowledge of
the insurer. Twenty years later, researchers argue that bancassurance is still in its infancy
within the U.K., currently accounting for 15% of new insurance premiums issued (Benoist
(2002),

It is argued that restrictive regulations were detrimental to the growth of

bancassurance within the country and that due to the lack of experience the correct model
for the U.K. is still to be found (Hubbard (spring 2001)). Two benefits of the regulatory
system in the U.K. are firstly, that it is based on one almighty regulator that overseas the
different factors of the financial services industry (the financial Services Authority). This
leads to more streamlined regulations than in other countries that employ functional form
regulatory systems.

40
SPAIN:
Spain has one of the most developed markets in bancassurance (Datamonitor
(2003)). Current penetration of bancassurers is over 75% of life insurance business and an
ever-increasing proportion of the non-life business. In Spain, the evolution of the
bancassurance market is fostered by the phenomenal growth within the insurance services
industry (life insurance alone has seen 30% growth per annum over the past 15 years
(Durand (2003)). The development of bancassurance in the Spanish market was
facilitated by the well-established network of regional building societies, and also the
cultural mentality that it is correct to take on risks (Goddard (1999)).

BRAZIL:
In Brazil the laws are in the bancassurers favor, and the banks within the country
control more than 65% of the insurance market (Nigh and Saunders (2003)), a size that
rivals the leading bancassurers in Europe. Furthermore, in Brazil, bancassurers are assisted
by regulations that ban the development of agent networks (Benoist (2002)).

NORTH AMERICA:
The North American financial services market is the largest in the world and
bancassurance has developed in a differing manner in this region depending on the
country in question. In Canada, there has been consolidated regulation for more than 15
years and banks are legally allowed to own insurance companies, but limitations are
placed on the products that can be provided (Dorval (2002)). While in Mexico,
bancassurance has been a flourishing industry due largely to the role played by banks in
the creation of pension funds since the 1997 pension reforms.
Bancassurance in the U.S. has, in contrast, faced a very tight regulatory and
legislative environment for many decades. The formation of financial conglomerates was
greatly hindered by the Banking Act of 1933 (Glass-Stegall Act) and the Bank Holding
Company Act of 1956. Only in 1999 did laws become more favorable to banks offering
insurance products, with the passing of the Gramm-Leach Bliely Act. However, due to the
divergence between the state and federal laws regarding banks offering insurance

41
products, bancassurers still face a hard time ahead in relation to regulations and attempting
to overcome powerful lobbies that aim to maintain existing hierarchies (Boot (2003)).
Currently, only around 7% of Americans purchase their insurance products through bank
branches (Thomson (summer 2002b)). However, with the ever-continuing regulatory
changes such as the demutualization of insurance companies coupled with an ageing
population, it is widely believed that there will be strong growth potentials for
bancassurers in a mature market such as the U.S.

ASIA AND THE PACIFIC:

Bancassurance in the Asian region has been relatively slow to take off, with the
exception of countries such as Australia, Hong Kong and Singapore where regulations
have been considerable lenient (Swiss Re. (2002)). The trend in the majority of mainland
Asian countries has been for a bank to form ties with a foreign insurer in order to begin
bancassurance operations with around 80% of these being life insurers, and the financial
structure of the operation tends to be in the form of a distributional agreement. Since
bancassurance is still in its infancy in most Asian countries, it is very susceptible to global
changes
Most countries within Asia have only recently begun allowing the formation of
bancassurance operations with the main players listed below. Certain countries within the
region are still holding out against the onslaught of the bancassurance trend. Vietnam still
restricts banks from offering life insurance products, while South Korea has made certain
rules that make it difficult to begin a bancassurance operation within the country

2.2 Quantitative works of major Researchers related to bancassurance

Compared to the vast amount of descriptive work that has been published in the
field of bancassurance, there is only a limited amount of empirical studies conducted on
the effects that bancassurance actually has on the company once implemented. This
was largely due to the lack of information that resulted from poor company disclosure
statements and inadequate collections of national statistics. As these problems are being
rectified, researchers into the bancassurance practice are making more and more empirical
research; nevertheless, it is still in its early stages. The following aims at highlighting the

42
major quantitative findings of certain researchers that have performed research into
the union of banks and insurers.

The majority of past studies have focused mainly on the risk and profitability
effects resulting from the union of a banking and non-banking firm. One of the earliest
studies in this area was performed by Boyd and Graham (1986). They conducted a risk-
of-failure analysis and looked at two periods around a new Federal Reserve policy
(1974s go-slow policy). they found that bank holding companies (BHCs) involvement
in non-banking activities is significantly positively correlated with the risk of failure
over the period 1971-1977, while the period 1978-1983 showed no significance, thus
indicating that the new policy had a considerable impact on bank holding company
(BHC) expansion into non-banking activities. Boyd and Graham (1988) followed their
1986 study with a paper that used a simulation approach, whereby they simulated possible
mergers between banking and non-banking companies which were then compared to
existing BHCs in order to determine whether the risk of bankruptcy will increase of
decrease should expansion be allowed in to the non-banking industry, and also to
determine the concurrent effect on company profitability. Their main finding was that the
risk of bankruptcy only declined should the BHC expand into the life insurance practice.
Brewers (1989) study finds similar risk reduction benefits existing however cannot
specify whether they originate as a result of diversification, regulation or efficiency gains.
Boyd, Graham and Hewitt (1993) build on Boyd et al. (1988) by conducting a
simulation study. They once again conclude that mergers of BHCs with insurance
companies may reduce risk, whereas those with securities or real-estate firms will not.
Saunders and Walter (1994) and Lown, Osler, Strahan and Sufi (2000) use a similar
method to Boyd and Graham (1988) and obtain similar results with more current data.
Estrella (2001) examines diversification benefits for banks by using proforma
mergers. In contrast to previous studies that incorporate accounting data, Estrella uses
market data and a measure of the likelihood of failure that is derived through the
application of option pricing theory to the valuation of the firm. the findings indicate that
banking and insurance companies are likely to experience gains on both sides in the
majority of the cases.

43
 The other major series of studies on banks expansion into non-banking activities
focus on the wealth effects of such a move. Cybo-Ottone and Murgia (2000) analyzed
the stock market valuations of mergers and acquisitions in the European banking industry
over the period 1988-1997, and found the existence of significant positive abnormal
returns associated with the announcement of product diversification of banks into
insurance. Furthermore, they found that country effects do not significantly affect their
overall results, suggesting a homogeneous stock market valuation and institutional
framework across Europe. Carow (2001) looked at the abnormal returns of bank and
insurance companies following the changing legislation brought about as a result of the
Citicorp-Travelers Group merger, and discovered that investors expect large banks and
insurance companies to gain significantly from the legislation removing barriers to
bancassurance. In an event study released later in the same year, Carow (Mar 2001)
found in support the contestable market theory that insurance companies became worse
off and banks had no long-term gains following legislations further supporting
bancassurance within the U.S.Cowan, Howell and Power (2002) conducted a similar
event study surrounding four separate court rulings and discovered that on average only
larger, riskier BHCs with fee-based income gain the most, while smaller, riskier insurers
sustain the highest wealth losses. Fields, Fraser and Kolari (2005) find that
bancassurance mergers are positive wealth creating events by examining abnormal
return data. They further deduced that scale and scope economies were a contributing
factor in these results.

As always, the opponents are there. Amel, Barnes, Panetta and Salleo (2004) and
Strioh (2004) found that consolidation in the financial sector is beneficial up to a relatively
small size in order to reap economies of sale, and that there is no clear evidence
supporting cost reductions stemming from improvements in managerial efficiencies.
Strioh (2004) finds non-banking income volatile and that there is little evidence of
diversification benefits existing. But, the majority of the past studies have found risk
reduction and wealth creating benefits associated with the expansion of banks into the
insurance industry.

44
Article 2.3

Title: INSURERS UPBEAT ON BANCASSURANCE CHANNEL

Bancassurance is likely to generate approximately 35% of private insurers’

premium income by 2008, according to an analysis of India’s bancassurance sector by
Watson Wyatt Worldwide, a leading global insurance consulting firm.
‘India Bancassurance Benchmarking Study- 2006/7’ is the first of its kind survey in
the Indian market, and part of an Asia-wide analysis focused on bancassurance
distribution. It sets out to define bancassurance performance standards and benchmarks
against a cross section of industry practices, processes and productivity indicators. Watson
Wyatt has analyzed the bancassurance channel from the perspective of banks, life insurers
and non-life insurers separately in the report.
Mr. Graham Morris, Director, Watson Wyatt Worldwide said: “the purpose
of the survey was to focus and understand how banks and insurers develop strategies for
selling life and non-life insurance products through the vast network of bank branches in
India and the practical issues they face in implementing the sales process”. Watson Wyatt
had chosen India as the first country in Asia to do the Benchmarking Survey considering
the vibrant growth of this alternative channel in the country compared to the other Asian
markets.
A total of 25 banks covering PSU, Private, and Foreign banks had
participated in the Survey, along with almost all private life and general insurers licensed
in the country.
Nearly 90% of interviewed life insurers are expecting an increase of over 75%
in new business premium income for the current financial year from the bancassurance
channel, despite the fact that they consider lack of sales culture on the part of bank’s
branch staff as a key issue in the success of bancassurance. The lack of a clear
bancassurance vision on the part of the bank partner is the most visible reason for the slow
progress in cross selling of insurance, despite the bank partners having impressive branch
networks or large customer bases.

45
 The quality of bank customer data is frequently poor and the absence of simple
CRM tools in most banks makes it difficult to launch specific initiatives to cross sell
insurance products. Public sector banks in the country, which control more than 90% of
the total customers, are seem to be inefficient in recording basic data about customers and
managing available information.
“Growth in bancassurance in India will fall short of its potential unless the
perceived lack of sales culture and vision begin to get addressed by the banks. An
understanding of theses differences will facilitate the mutual goal of increasing
bancassurance as the leading channel in insurance distribution in India,” said Mr.
R.Krishnamurthy, Managing Director, Distribution Practice, Watson Wyatt Insurance
Consulting of the India office.
Banks’ have overwhelmingly expressed a leaning towards insurers with
bancassurance expertise and showing evidence of their commitment. On product design
and development, they seem to demand more attention from insurers to involve the bank
management team.

The brand image of the bank partner, its willingness to bring about a cultural
change and involving the entire branch network are the vital factors that life insurers
consider when entering into a bancassurance tie-up. While developing their bancassurance
strategy, general insurers consider increasing new business and tapping new markets as
the key factors. 100% of respondents ranked gaining support and commitment from the
bank’s management as the critical factor in building successful bancassurance operations.
Both bankers and insurers are bullish about the future outlook of bancassurance
with nearly a quarter of respondents predicting that the overall share of bancassurance
would be about 50% or more in the life segment in the year 2010.
About 30% of the life insurers have indicated that by the year 2010, rural
insurance business would constitute between 16-20% of their total bancassurance new
business premium.
Life insurers have also expressed overwhelming support to innovative changes in the
bancassurance channel, such as banks having multiple insurer relationships, exclusive

46
bancassurance products for deepening insurance penetration and simpler training
requirements for the bank staff to qualify as insurance salespersons.
There is no doubt that bancassurance in India will play a major role as the
insurance sector develops. India has the unique experience of drawing strong regulatory
support for this channel. Coupled with the growing awareness of banks to leverage on
their branch network and customer strengths, the insurance selling opportunities would get
widely tapped at bank branches in the years ahead.

47
 3.0 RESEARCH METHODOLOGY

INTRODUCTION:
Research is an academic activity and as such the term should be used in
technical sense. According to Clifford Woody research comprises defining and redefining
problems, formulating hypothesis or suggested solutions, collecting, organizing and
evaluating data; making deduction and reaching conclusion; and at last care fully testing
the conclusions to determine whether they fit the formulating hypothesis.

The main aim of the research is to find out the truth which is hidden and which
has not been discovered as yet.

OBJECTIVES OF RESEARCH:
1. To gain familiarity with a phenomenon or to achieve new insights into it.
2. To portray accurately the characteristics of a particular individual, situation or
group
3. To determine the frequency with which something occurs or with which it is
associated with something else
4. To test a hypothesis of a casual relationship between variables

RESEARCH DESIGN:
Research design is the arrangement of conditions for collection and analysis of
data in manner that aims to combine relevance to the research purpose with economy in
procedure of data. It is a blue print specifying every stage of action in the course of
research.
The research design adopted in this study for secondary data, is exploratory
and analytical in nature. Exploratory research aims to gain familiarity and new insights
into any phenomenon while analytical research aims at analyzing the current scenario and
thereby using that to project the future

48
 RESEARCH METHODLOGY

performance. This research aims at studying the historical performance of the company in
bancassurance and it also evaluates the future prospects of the company
Descriptive research design is used for collecting primary data. It
is concerned with the research studies with a focus on the portrayal of the characteristics
of a group or individual or a situation. The main objective of such studies is to acquire
knowledge. The major purpose of Descriptive research is description of the state of affairs,
as it exists at present.

SAMPLING:

Sampling may be defined as a selection of some part of an aggregate or totality

on the basis of which a judgment or inference about the aggregate or totality is made.

SAMPLING DESIGN:

A sampling design is a definite plan for obtaining a sample given population.

There are different methods of sampling. Here Convenience sampling technique has
been used.

CONVENIENCE SAMPLING:

This method of sampling involves selecting the sample elements using some
convenient method without going through the rigor of sampling method. The researcher
may make use of any convenient base to select the required number of
samples.Accordingly, the area selected for the study was kilpauk, chennai.

SAMPLE SIZE:
Sample size refers to the number of items to be selected for the universe to
constitute a sample. The total sample size was taken to be 100.

49
 RESEARCH METHODLOGY

METHODS OF DATA COLLECTION:

NATURE OF DATA: There are two types of data namely primary and secondary data.
PRIMARY DATA: Primary data is the data collected for the first time through field
survey. This has been used to collect the data for the purpose of this study.

METHOD OF PRIMARY DATA COLLECTION

The method followed in obtaining the primary data was through the structured
questionnaire.

The researcher had used a Questionnaire for obtaining the primary data for
analysis. A questionnaire is a form prepared and distributed to secure responses to certain
questions. Here a well-structured questionnaire has been prepared with all the important
details regarding bancassurance. It has both open ended and close-ended questions.

PILOT STUDY:
Before a questionnaire is finalized it should be field-tested. As such, pilot study
has been done. That is after the questionnaire was drafted, to decide whether it is
comprehensive or not, it is used with a few (10) respondents Their responses are studied
and it has been helpful in changing the questionnaire like giving more instructions to the
respondents for filling up, re-sequencing the questions, addition and deletion of questions
etc.,

SECONDARY DATA: It refers to the information or facts already collected. Such data
are collected with the objective of understanding the past status of any variable. Here,
secondary data has been used for making a financial analysis.

50
 RESEARCH METHODLOGY

METHOD OF SECONDARY DATA COLLECTION:

 Annual reports
 Journals and Magazines
 Internet

Annual reports of AXIS bank have been used for making an analysis on the
financial performance of AXIS bank in bancassurance. And the data pertinent to
bancassurance like articles, previous researches, etc., has been collected from journals &
magazines as well as Internet.

RATING SCALES:

Summated rating scale: In this method, the attitude of people is classified into specific
points with approximately equal attitude value. The respondents to questions indicate the
degree of agreement or disagreement through their response. Based on the response of all
the questions, the attitude of the respondents is determined. This scale has been used for
the following question no: 10,15,17,18,21.

TOOLS USED: As the research contains both primary and secondary data it includes
both financial statement analysis and statistical analysis.

1. FINANCIAL STATEMENT ANALYSIS: Financial statements refer to the

formal and original statements prepared by a business concern to disclose its financial
information. They are useful only when they are analyzed and interpreted. The basis for
financial planning, analysis and decision-making is the financial information. Financial
information is needed to predict, compare and evaluate the firm’s earnings ability. In this
research, financial statements like annual reports of AXIS bank from the year 2003-2006
has been used for making an analysis on the financial performance of AXIS bank in
bancassurance and its contribution to the overall progress of the bank.

51
RESEARCH METHODLOGY

Ratio analysis, one of the most important techniques of financial statement

analysis has been used in this research.

 RATIO ANALYSIS: An analysis of financial statements based on

ratios is known as ratio analysis. Ratio analysis is the process of computing, determining
and presenting the relationship of items. Some of the ratios used in this research are:

Business ratios: They are used for comparing changes in the business from period to
period. With the help of this, one can pinpoint improvements in performance or
developing business areas. Some of the ratios used in this study are:

 Non-interest income as a percentage of total revenue: Non interest

income is the revenue earned by the bank apart from the interest income. Hence,
calculation of this ratio would reveal the contribution of non-interest income to the total
revenue of the bank. It can be find out by using the formula:
Non-interest income
Total revenue
 Non-interest income as a percentage of operating profit: This would
reveal the percentage of non-interest income contribution to the operating profit.It can be
find out by using the formula:
Non-interest income
Operating profit
 Non-interest income as a percentage of working funds: This would
indicate the percentage of non-interest income contribution to the working funds. It can be
calculated by using the formula:
Non-interest income
Working funds
 Return On Assets (Average): This ratio is calculated to measure the
productivity of assets. A comparison of net income and average total assets, the ROA ratio
reveals how much income management has been able to squeeze from each rupee’s worth
of a company's assets

52
RESEARCH METHODLOGY

Return On Assets (Average) = Net Income

Average total assets
 Business per employee: This is used to find out the productivity of the
employees. This is calculated based on the average employee numbers. And business is
the total of net advances and deposits. (Net of inter bank deposits)
Business per employee = Total of net advances and deposits
Average employee numbers

 Profit per employee: This is also used to find out the productivity of
the employees in terms of profit. This is also calculated based on the average employee
numbers.

 Percentage of net non-performing assets to customer assets: This is

used to find out the percentage of net non-performing assets to customer assets. This can
be obtained by using the formula:
Net Non Performing Assets
Customer Assets
 Percentage of net non-performing assets to gross advances: This is
used to find out the percentage of net NPA’s to gross advances. This can be obtained by
using the formula:
Net Non Performing Assets
Gross advances
Capital Adequacy Ratio: Capital adequacy ratios are a measure of the amount of a bank's
capital expressed as a percentage of its risk weighted credit exposures. It is also called as
Capital to Risk Weighted Assets Ratio (CRAR) .It determines the capacity of the bank in
terms of meeting the time liabilities and other risk such as credit risk, operational risk, etc.
In the most simple formulation, a bank's capital is the "cushion" for potential losses, which
protect the bank's depositors or other lenders..

Capital Adequacy Ratio = Total capital funds

53
 RESEARCH METHODLOGY

Risk weighted assets and contingents

STATISTICAL TOOLS USED:

This constitutes an integral part of research analysis. Hence any analysis of data
compiled should be subjected to relevant analysis so that meaningful conclusions could be
arrived at.
The statistical tools applied in this research are:
 Correlation co-efficient
 Chi-square test
 Percentage analysis.

CORRELATION COEFFICIENT In a bivariate study distribution we may be interested

to find out if there is any correlation or co-variance between the two variables under study.
If the change in one variable affects a change in the other variable, the variables are said to
be correlated. If the two variables deviate in the same direction i.e. if the increase (or
decrease) in one results in a corresponding increase (or decrease) in the other, correlation
is said to be direct or positive. But if they constantly deviate in opposite directions i.e., if
increase (or decrease in one results in corresponding decrease (or increase) in the other,
correlation is said to be negative.
∑xy/n - (∑x/n) (∑y/n)
Correlation coefficient = ……………………………………..
√∑x²/n-(∑x/n)² √∑y²/n-(∑y/n)²

CHI-SQUARE TEST:

When certain observed values of a variable are to be compared with the expected value the
test static,
Ψ² = (O - E) 2
E
Where Oi = observed frequency
Ei = Expected frequency
For more accuracy, Yates correction is used and the formula used is given below:
Ψ² = (O - E) 2

54
RESEARCH METHODLOGY

E
Power of association test: When the calculated value in the test is greater than the
tabulated value, we accept the alternative hypothesis Hi. In this case, power of association
test is applied in order to show the strength of association, where N = sample size. Based
on the power of Association Test, the value indicates the fair relationship between the
variable.

PERCENTAGE ANALYSIS: These are the measures of central tendency. It is used to

describe relationships. It can be used to compare the relative terms, the distribution of 2 or
more series of data, since the percentage reduces everything to a common base and
thereby to allow meaningful comparison to be made.

Percentage Analysis = No. Of respondents * 100

Total No. Of respondents

55
 DATA ANALYSIS AND INTERPRETATION

4.0 DATAANALYSIS AND INTERPRETATION

4.1 Secondary data analysis:

Secondary data analysis, the imperative part of this study has been undertaken to
analyse the performance of AXIS bank in bancassurance so far and the contribution of
bancassurance to the progress of the bank in the form of increase in ROA, revenue etc.,
using ratio analysis. Since AXIS bank has started earning revenue for the sale of insurance
policies from 2005 that the analysis includes from the year 2005-2008.
TABLE 4.1.1
AXIS BANK’S EARNINGS FOR THE SALE OF BAJAJ ALLIANZ LIFE
INSURANCE POLICIES FROM 2005-2008
Year 2005 –06 2006 -07 2007- 08
Revenue earned 16,99 lacs 88,14 lacs 112,09 lacs
for the sale of
insurance policies

CHART 4.1.1

Revenue earned for the sale of insurance policies

120
112.09
100 88.14
80
60 Revenue (in lacs)
40
16.99
20
0
2004-05 2005-06 2006-07

INFERENCE: From the above, it can be seen that there has been an impressive growth in
the revenue over the years for the sale of Bajaj Allianz life insurance policies by AXIS
bank.
TABLE 4.1.2
RETAIL SEGMENT PROFIT FROM THE YEAR 2007 TO 2008:

56
DATA ANALYSIS AND INTERPRETATION

Retail banking segment is undertaking bancassurance. And it is the fastest growing

banking business segment. One of the reasons being the bank’s dealing with the sale of
insurance policies to its retail customers. It has been mentioned even in the director report
of AXIS bank. Thus a glimpse at its profit would be imperative.

Year 2005-06 2006-07 2007-08

Profit earned by 520,64 lacs 701,67 lacs 875,71 lacs
the retail segment
of AXIS bank

CHART 4.1.2:

INFERENCE: From the above, it can be observed that there has been a phenomenal
increase in the profit of retail segment from 2005-2008, which symbolizes the
bancassurance contribution.

TABLE 4.1.3

RETAIL SEGMENT ASSETS FROM THE YEAR 2005 TO 2008:

Retail segment asset can also be increased by way of bancassurance operation. Let
us take a look at its asset position from the year 2005-06 to 2007-08.

57
 DATA ANALYSIS AND INTERPRETATION

Year 2005 –06 2006 -07 2007- 08

Retail assets 24,469,93 38,571,09 50,100,34

CHART 4.1.3

INFERENCE: From the above, we can infer that there has been a phenomenal increase in
the growth of retail assets over the years that it indicates the contribution of bancassurance
to it.

TABLE 4.1.4:
OPERATING EXPENSES FROM THE YEAR 2005 TO 2008:
Bancassurance will lead to a reduction in the operating expenses of the bank as it
can have the opportunity of economies of scale. Thus let us took a look at the operating
expenses of AXIS bank from the year 2005-06 to 2007-08.
Year 2005 –06 2006 -07 2007- 08
Operating expenses 1,085,40 1,691,09 2,420,80

CHART 4.1.4:

58
DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the chart, we can observe that there has been an increase in the
operating expenses of the bank. Since, AXIS bank is only in its infant stage in
bancassurance, it can perform more to reduce the same in the long run.

TABLE 4.1.5:
NON-INTEREST INCOME AS A PERCENTAGE OF TOTAL REVENUE: As
bancassurance revenue leads to an increase in the non-interest income, the non-interest
income as a % of total revenue from the year 2005-2007 is as follows:

Year 2005-06 2006-07 2007-08

Non interest651,34 1,123,98 1,516,23

income
Total revenue 3,744,83 5,599,32 8,405,25
Ratio 17.39 20.07 18.03

Chart 4.1.5:

59
DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the above, it can be observed that non-interest income as a% of total
revenue though increased in the year 2005,it has been decreased in the year 2006.

TABLE 4.1.6:

NON-INTEREST INCOME AS A % OF OPERATING PROFIT:

Non-interest income as a contribution to the % of operating profit
from the year 2005-2008 is shown as below:

Year 2005-06 2006-07 2007-08

Non-interest 651,34 1,123,98 1,516,23
income
Operating profit 1,156,02 1,733,84 2,562,86
Ratio 56.34% 64.82% 59.16%

Chart 4.1.6:

60
DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the above, it can be observed that non-interest income as a%

percentage of operating profit has been increasing from 2005 to 2006.But it has been
decreased in the year 2007-08.

Note: Operating profit = (interest income + other income – interest expense – operating
expense –amortization of premia on investments - profit/(loss) on sale of fixed assets).

Business ratios (As per the director’s report of AXIS bank)

TABLE 4.1.7:

NON – INTEREST INCOME AS A % OF WORKING FUNDS:

Non-interest income as a % of working funds is shown as below:

Year 2005-06 2006-07 2007-08

Non interest income1.44% 1.79% 1.76%
as a % of working
funds

Chart 4.1.7:

61
DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the chart it can be observed that non-interest income as a%

percentage of working funds though increased in the year 2006,it has been decreased in the
year 2008.

TABLE 4.1.8:
RETURN ON ASSETS (AVERAGE):
The best opportunity for the banks, which undertakes bancassurance operation is
that, it can increase its return on assets. Hence, the return on assets of the bank from 2005-
2008 is as follows:

Year 2005-06 2006-07 2007-08

Return on Assets1.47% 1.38% 1.33%
(Average)

Chart 4.1.8:

62
DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the above, it can be observed that the return on assets of the bank has
been decreased from the year 2005 – 2008.

TABLE 4.1.9;
BUSINESS PER EMPLOYEE:
The business per employee from 2005-2008 is as follows:
Year 2005-06 2006-07 2007-08
Business Per Employee 806 758 607

Chart 4.1.9:

INFERENCE: From the above, it is clear that the business per employee of the bank over
the years has been on the decreasing trend.

63
DATA ANALYSIS AND INTERPRETATION

TABLE 4.1.10
PROFIT PER EMPLOYEE:
Profit per employee from 2005-2008 is as follows:
Year 2005-06 2006-07 2007-08
Profit per employee 8.80 7.39 6.13

Chart 4.1.10:

INFERENCE: From the above, it can be observed that profit per employee of the bank
over the years has been on the decreasing trend.

RBI guidelines: As per the RBI guidelines for the banks to enter into the insurance
sector, The CRAR of the bank should not be less than 10 per cent, and the level of Non
Performing Assets (NPAs) should be reasonable. Hence, analysis of such ratios is also
important.

Capital adequacy ratio:

Capital adequacy ratio from the year 2005-2008 can be shown as follows: (As the
total capital includes tier-1 and tier-2, it can be viewed separately.)

64
 DATA ANALYSIS AND INTERPRETATION

TABLE 4.1.11 Tier 1 capital:

Year 2005-06 2006-07 2007-08

Tier 1 capital 3,96,216 5,149,91 6,352,71

Risk weighted assets

and contingents 41,27,103 60,217,62 74,081,92
Ratio 9.60% 8.55% 8.57%

TABLE 4.1.12 Tier 2 capital:

Year 2005-06 2006-07 2007-08

Tier 2 capital 1,054,73 1,720,71 3,339,99

Risk weighted assets

and contingents 41,27,103 60,217,62 74,081,92
Ratio 2.56% 2.86% 4.51%

Where,

Tier –1 capital includes paid up capital, statutory reserve, general reserve, balance
in profit and loss account and amalgamation reserve. From this, outstanding deferred tax
asset, if any, is deducted.
Tier– 2 capital includes general loan loss reserves, investment fluctuation reserve
and subordinated debt.

TABLE 4.1.13 Total Capital:

Year 2005-06 2006-07 2007-08

Total capital 5,016,89 6,870,62 9,692,70

Risk weighted assets

and contingents 41,27,103 60,217,62 74,081,92

65
DATA ANALYSIS AND INTERPRETATION

Ratio 12.16% 11.41% 13.08%

Chart 4.1.11:

INFERENCE: From the above, it can be seen that the capital adequacy ratio though
decreased in the year 2006,it has been increased in the year 2007-08.

TABLE 4.1.14:
PERCENTAGE OF NET NON PERFORMING ASSETS TO CUSTOMER
ASSETS:
The percentage of net non-performing assets to customer assets is shown as below
from the year 2005-2008:

Year 2005-06 2006-07 2007-08

Percentage of net non performing0.20% 0.36% 0.38%
assets to customer assets
Chart 4.1.12:

66
DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the above, it is clear that the percentage of net non-performing
assets to customer assets has been increasing from the year 2005-2008

TABLE 4.1.15
PERCENTAGE OF NET NON-PERFORMING ASSETS TO NET ADVANCES:
The percentage of net non-performing assets to net advances from the year 2005-2008 are
shown as follows:
Year 2005-06 2006-07 2007-08
Percentage of net non0.24% 0.44% 0.43%
performing assets to net
advances

Chart 4.1.13:

67
 DATA ANALYSIS AND INTERPRETATION

INFERENCE: From the above, it can be observed that the percentage of net non-
performing assets to net advances has been increased from the year 2005 to 2006 and it
has been decreased in the year 2008.

TABLE 4.1.16

PERCENTAGE OF GROSS NON-PERFORMING ASSETS TO GROSS

ADVANCES: The percentage of gross non-performing assets to gross advances from the
year 2004- 2006 are shown as follows:

Year 2005-06 2006-07 2007-08

Percentage of gross1.69% 1.32% 1.32%

non performing
assets to gross
advances

Chart 4.1.14:

INFERENCE: From the above, it can be observed that the percentage of gross non-
performing assets to gross advances has been decreasing from the year 2005 –2008.

68
4.2 PRIMARY DATA ANALYSIS:

Based on the objective, a well-structured questionnaire was framed and the

following clearly represents all the related data and their interpretations in a detailed form
with statistically proven inferences.
TABLE 4.2.1

AGE FACTOR:

AGE LIMIT NO. OF PERCENTAGE

RESPONDENTS
20-25 12 12
25-30 20 20
30-35 24 24
35-40 26 26
Above 40 18 18
TOTAL 100 100

INFERENCE:
From the above table it can be inferred that 12% of the respondents belongs to 20-25 Age
limit, 20% of the respondents belongs to 25-30 Age limit, 24% of the respondents belongs
to 30-35 Age limit, 26% of the respondents belong to 35-40 Age limit and the remaining
18% of the respondents belongs to above age 40. Hence the majority of the respondents
fall in to the category of 35-40 Age limit.
TABLE 4.2.2

GENDER:
GENDER NO. OF PERCENTAGE
RESPONDENTS
Male 76 76
Female 24 24
TOTAL 100 100
INFERENCE
: From the above table it can be observed that 76% of the respondents are Male and 24%
of the respondents are female. Hence the majority of the respondents are Male.

69
TABLE 4.2.3

OCCUPATION:

OCCUPATION NO. OF RESPONDENTS PERCENTAGE

Salaried 49 49
Businessman 34 34
Retired 15 15
Others 2 2
TOTAL 100 100

INFERENCE:

From the above table it is observed that 49% of the respondents are salaried,
34% of the respondents are involved in business, and 14% of the respondents retired and a
less percentage of 2 have fallen into the category of others includes professionals. Thus,
majority of the respondents are Salaried.
TABLE 4.2.4

MARITAL STATUS:

MARITAL NO. OF PERCENTAGE

RESPONDENTS
STATUS
Single 28 28
Married 72 72
TOTAL 100 100

INFERENCE:

From the above table, it can be seen that 28% of the respondents are single and
72% of the respondents are married. Hence the majority of the respondents are married.

TABLE 4.2.5

70
NO. OF CHILDREN:

NO. OF CHILDREN NO. OF RESPONDENTS PERCENTAGE

Yes 68 68
No 4 4
N/A 28 28
TOTAL 100 100

INFERENCE:
From the above table it can be seen that 68% of the respondents who have
got married are having children and 4% of the respondents are not having so far .

TABLE 4.2.6
ANNUAL INCOME:

ANNUAL INCOME NO. OF RESPONDENTS PERCENTAGE

<2 LAKHS 22 22
2-4 LAKHS 43 43
4-6 LAKHS 27 27
Above 6 LAKHS 8 8
TOTAL 100 100

INFERENCE:
From the above table it can be seen that 22% of the respondents are
earning less than 2 lakhs p.a., 43% of the respondents are earning 2-4 lakhs p.a., which is
the major percentage, 27% of the respondents are earning 4-6 lakhs and the remaining
respondents are earning above 6 lakhs p.a.,

TABLE 4.2.7

ACCOUNT HOLDER OF AXIS BANK:

ACCOUNT HOLDER NO. OF RESPONDENTS PERCENTAGE

OF AXIS BANK
Yes 86 86
No 14 71 14
TOTAL 100 100
INFERENCE : From the above table it is found that 86% of the respondents, which is a
majority, are holding Account in AXIS Bank and 14% of the respondents are Non-
Account Holders of AXIS bank. Non-a/c holders include borrowers, credit card holders
and the persons dealing with investments.

TABLE 4.2.8
TYPE OF ACCOUNT:

TYPE OF ACCOUNT NO. OF RESPONDENTS PERCENTAGE

Savings A/C 57 57
Current A/C 11 11
Both 18 18
N/A 14 14
TOTAL 100 100

INFERENCE: From the above table it can be seen that 57% of the respondents are
Saving A/C holders and 11 % of the respondents are Current A/C holders. And 18%
people own both the type of accounts. And for 14% of the people this question is not
applicable as they are not the account holders of AXIS bank.

TABLE 4.2.9:

72
NO. OF YEARS ASSOCIATIED WITH AXIS BANK:

NO. OF YEARS NO. OF RESPONDENTS PERCENTAGE

<1 Yr. 24 24
1-3 Yrs 39 39
3-5 Yrs 33 33
5-7 Yrs 4 4
> 7 Yrs 0 0
TOTAL 100 100

INFERENCE: From the above, it is found that 24% of the respondents are having less
than 1 year associability with AXIS Bank where as a major 39% of the customers have 1-
3 years of relationship. 33% of the respondents are having 3-5 years relationship 4% of the
respondents are having greater than 5 but less than 7 years of relationship. No customer
among the respondents is having greater than 7 years relationship with AXIS Bank.

TABLE 4.2.10
PERSONAL VIEWS ABOUT INSURANCE:

73
PERSONAL VIEWS Strongly Agree Neutral Disagree Strongly Total
ABOUT Agree Disagree
INSURANCE
A) Insurance provides
protection to you and 32 37 19 12 0 100
your family
B) Insurance is an
absolute necessity for an 10 30 38 19 3 100
individual/family
C) Insurance is one of
the best Investment 9 20 42 21 8 100
options
CHART 4.2.1

PERSONAL VIEWS
No.of respondents(in %)

100
80 Strongly Agree
Agree
60
Neutral
40
Disagree
20
Strongly Disagree
0
A B C
PERSONAL VIEWS ABOUT
INSURANCE

INFERENCE: From the above, it can be observed that

(A) 32% of the respondents Strongly agree that Insurance provides protection to their
family and 37%, which is a majority, agree to the same. But 19% of the respondents
remained Neutral and 12% disagree the same. No one Strongly disagreed the view.

74
(B) 10% of the respondents Strongly agree that Insurance is an absolute necessity for
an Individual/family and 30% agree to this. 38% stayed Neutral and 19% of the
respondents disagreed the view. A less percentage of 3 strongly disagreed the view.
(C) 9% of the respondents Strongly agree that Insurance is one of the best investment
options and 20% agree to this. 42%, that is a majority, remained neutral whereas 21%
disagreed the point. Also 8% of the respondents Strongly disagreed.

TABLE 4.2.11

LIFE INSURANCE POLICY HOLDER

LIFE INSURANCE NO. OF RESPONDENTS PERCENTAGE

POLICY HOLDER
Yes 47 47
No 53 53
TOTAL 100 100

CHART 4.2.2:

75
 LIFE INSURANCE POLICY HOLDER

YES
47%
53% NO

INFERENCE: From the above, it can be noticed that 47% of the respondents are
holding a Life Insurance policy currently and the big rest 53% are not holding any Life
Insurance policy.

TABLE 4.2.12
AWARENESS ABOUT BAJAJ ALLIANZ LIFE INSURANCE

AWARE OF BAJAJ NO. OF RESPONDENTS PERCENTAGE

ALLIANZ LIFE
INSURANCE
Yes 72 72
No 28 28
TOTAL 100 100

CHART 4.2.3

76
INFERENCE:

From the above table, it can be observed that a vital part of the
respondents, which is 72% are aware about AXIS Life insurance and 28% do not have
the same.

TABLE 4.2.13

SOURCE TO KNOW ABOUT AXIS LIFE INSURANCE

SOURCE No. of respondents Percentage

AXIS Bank 28 39
Advertisement 44 61
Friends & Relatives 0 Nil
Others 0 Nil
N/A 28 28
Total 100 100

CHART 4.2.4:

77
INFERENCE:

From the above we can understand that the major Source to Know about
AXIS Life Insurance is Advertisement, which is conveyed by 61% of the respondents.
Whereas AXIS Bank owns 39%.

TABLE 4.2.14

AWARE OF BANKS CROSS-SELL INSURANCE PRODUCTS (in %)

AWARE OF BANKS NO. OF PERCENTAGE

CROSS-SELL RESPONDENTS
INSURANCE
PRODUCTS
Yes 48 48
No 52 52
TOTAL 100 100

78
CHART 4.2.5

AWARE OF BANKS CROSS SELLING INSURANCE PRODUCTS

YES
48% NO
52%

INFERENCE:

From the above, it can be noticed that 48% of the respondents are aware
of Banks cross-selling Insurance products but 52% of the respondents which is a
majority are not aware of the same.

TABLE 4.2.15

ADVANTAGES IN BUYING THE INSURANCE POLICIES THROUGH

BANKS

ADVANTAGES Strongly Agre Neutral Disagree Strongly Total

Agree e Disagree

79
A) Expert 17 28 26 22 7 100
advice
B) Convenience 20 44 24 12 0 100

C) Easy 12 41 35 8 4 100
accessibility

CHART 4.2.6:

ADVANTAGE IN BUYING INSURANCE POLICIES THROUGH

BANKS
No. of Respondents (in

Strongly Agree
100
80 Agree
%)

60
40 Neutral
20
0 Disagree
A B C
Strongly
Disagree

INFERENCE: From the above, it can be observed that,

A) 17% of the respondents strongly agree with the advantage of expert
advice in buying through banks and the same is agreed by 28 %. 26% of the respondents
remained neutral and 22%, 7% of the respondents strongly disagree and disagree
respectively.
B) 20% of the respondents felt convenience in buying insurance policies
through banks and they strongly agree to that. Also 44% agree the same. But 24% stayed
neutral whereas 12% disagreed this point. No one strongly disagreed the same.
C) 12% of the respondents strongly agree and 41% agree with the
advantage of easy accessibility.35% remains neutral. Only 8% disagree and 4% strongly
disagree to this view.
Thus, majority of the respondents agree with the advantages in buying the
insurance policies through banks.

TABLE 4.2.16

80
 AWARE OF OBTAINING BAJAJ ALLIANZ LIFE POLICY FROM AXIS
BANK

AWARE OF OBTAINING NO. OF PERCENTAGE

POLICY RESPONDENTS
FROM AXIS BANK
Yes 46 46
No 54 54
TOTAL 100 100

CHART 4.2.7

INFERENCE:
From the above, it can be noticed that 46% of the respondents know
well that Bajaj Allianz life insurance policy can be bought from AXIS bank branches.
But 54% of the respondents, which is a majority, don’t know the same.
TABLE 4.2.17

FAMILIARITY WITH THE POLICIES OFFERED BY BAJAJ ALLIANZ LIFE

INSURANCE
FAMILIAR WIH THE No. of respondents Percentage
TYPES OF POLICIES
OFFERED BY BAJAJ
ALLIANZ LIFE INSURANCE
Strongly Agree 11 11
Agree 26 26
Neutral 14 14

81
 Disagree 37 37
Strongly Disagree 12 12
Total 100 100

CHART 4.2.8

INFERENCE: From the above, it can be seen that 11% of the respondents are familiar
with the different types of policies offered by Bajaj Allianz Life insurance which they
have strongly agree and 26% agree to it. Whereas 14% remained neutral. 37% disagreed
and 12% of the respondents strongly disagreed the view. Thus, majority of the
respondents are not familiar with the different types of policies offered by Bajaj Allianz
Life Insurance.

TABLE 4.2.18
INITIATIVES TAKEN BY AXIS BANK TO PROMOTE BAJAJ ALLAINZ LIFE
INSURANCE PRODUCTS

INITIATIVES Strongly Agree Neutra Disagree Strongly Total

TAKEN BY AXIS Agree l Disagree
BANK

82
You have often noticed 12 22 18 33 15 100
the displays regarding
Bajaj Allianz Life
Insurance in AXIS
Bank
You have come across 10 22 13 34 21 100
advertisements/links
etc., regarding Bajaj
Allianz Life Insurance
in AXIS Bank Web Site
AXIS Bank Employees 14 27 12 35 12 100
have explained you
about the policies of
Bajaj Allianz life
insurance (through
phone calls/direct
contact)

CHART 4.2.9:

INFERENCE: From the above, it can be observed that

(a) 12% of the respondents strongly agree that they have noticed the displays
of Bajaj Allianz life Insurance in AXIS Bank. Also 22% support them by agreeing to it.
18% remain unbiased and 33% disagree the statement. And 15% of the respondents have
strongly disagreed the same.

83
(b) 10% of the respondents strongly agree that they have come across the
links/ads concerning Bajaj Allianz life insurance in the web site of AXIS Bank. 22%
agree to this point and 13% replied neutral. But 34% disagree to this and 21% strongly
disagree the same.
(c) 14% of the respondents strongly agree that the Employees of AXIS bank
has explained them about Bajaj Allianz life insurance products. And the same has been
agreed by 27% of the respondents. 12% of the respondents didn’t take either side.
Whereas 35% disagree the statement and 12% of the respondent’s have strongly
disagreed.
TABLE 4.2.19

SATISFACTION OF CUSTOMER SERVICES

CUSTOMER SERIVICE No. of respondents Percentage

Highly Satisfied 13 13
Satisfied 43 43
Moderately satisfied 28 28
Dissatisfied 13 13
Highly dissatisfied 3 3
Total 100 100

CHART 4.2.10:

84
 S ATIS FACTION OF CUS TOMER S ERVICES

3% 13%
13%
Highly S atisfied
S atisfied
Moderately satisfied
28%
Dissatisfied
43%
Highly dissatisfied

INFERENCE: From the above, it can be observed that 13% of the respondents replied
that they are highly satisfied with the customer service provided by AXIS bank. And
good percentage of 43 answered that they are satisfied with the customer service. Also,
28% of the respondents say that they are moderately satisfied but 18% declared that they
are dissatisfied with the customer service. A less number of 3% also claim that they are
highly dissatisfied with the same. Overall, most of the respondents are satisfied with the
customer services.

TABLE 4.2.20

FACTORS THAT BUILD A STRONG RELATIONSHIP WITH CUSTOMERS

RELATIONSHIP Strongly Agree Neutral Disagree Strongly Total

BUILDING Agree Disagree
FACTORS

Reliability 37 42 12 7 2 100
Easy and advantageous 15 21 24 36 4 100
banking over other banks

Wide range of 13 24 32 28 3 100

Products and Schemes
Better understanding 15 23 33 26 3 100
of customer needs
and provide expert
advice
CHART 4.2.11:

85
 RELATIONSHIP BUILDING FACTORS

100 Strongly Agree

80
Agree
No of 60
respondents Neutral
40
(in %)
20 Disagree
0
A B C D
Strongly
Factors Disagree

INFERENCE: From the above, it can be observed that

(a) 37% of the respondents strongly agree with the Reliability factor. Also 42% of
the respondents agree to it. 12% stayed neutral.7% of the respondents have disagreed and
2% strongly disagreed to it.
(b) 15% of the respondents strongly agree to the fact that there exists an easy and
advantageous banking over other banks. Also 21% of the respondents agreed the same.
24% stayed neutral. A typical 36% of the respondents disagree the view and 4% strongly
disagree the same.
(c) 13% of the respondents strongly agree to the factor of wide range of products
and schemes. The same is also agreed by 24%. 32% of the respondents remained
neutral.28% of the respondents disagreed this view and a less percentage of 3 also strongly
disagree to this.
(d) 15% of the respondents strongly agree to the factor of better understanding of
customer needs and Expert advice and 22% agree to the view.33% stayed neutral.
Whereas 26% of the respondents have disagreed and 34% have strongly disagreed.

TABLE 4.2.21
AXIS BANK AS A ONE-SHOP STOP FOR ALL FINANCIAL NEEDS

86
AXIS Bank as a one stop No. of respondents Percentage
Shop
Strongly Agree 12 12
Agree 22 22
Neutral 36 36
Disagree 22 22
Strongly Disagree 8 8
Total 100 100

CHART 4.2.12

INFERENCE: From the above, it can be seen that 12% of the respondents strongly agree
that they will prefer AXIS Bank as a one-stop shop for all their financial needs. 22% of
the respondents replied that they agreed and 36% of the respondents, which is a majority,
remain neutral about this. But 22%have denied the same. And 8% have strongly disagreed
to it.
TABLE: 4.2.22
PLAN TO TAKE ANY LIFE INSURANCE POLICY IN THE NEAR FUTURE

PLANNING TO TAKE ANY NO. OF PERCENTAGE

LIFE INSURANCE POLICY RESPONDENTS
Yes 42 42
No 58 58
TOTAL 100 100
CHART 4.2.13

87
 FUTURE PLAN TO TAKE ANY LIFE INSURANC E PO LIC Y

42% YES NO

58%

INFERENCE:

From the above table it can be observed that 42% of the respondents have a
plan to take a life insurance policy in the near future but 58% of the respondents, which is
a majority, have no such idea.

TABLE: 4.2.23

REASONS FOR TAKING A LIFE INSURANCE POLICY IN THE NEAR

FUTURE

REASONS FOR Highly Essential Least Not N/A Total

TAKING A LIFE Not
INSURANCE Essential Essential Essential Essential
POLICY At All
Post retirement 4 4 10 13 11 58 100
income
Invest in child’s 5 8 12 8 9 58 100
dreams
Give Protection 3 3 11 12 13 58 100
and safety to the
family in case of
unfortunate
occurrences
Tax Benefits 19 11 3 6 3 58 100
Better returns in 11 16 6 3 6 58 100
terms of
investment

CHART 4.2.14

88
 REAS ONS FOR TAKING A LIFE INS URANCE POLICY
100 HIGHLY ESSENTIAL

No.of respondents(in %)
80

60
ESSENTIAL

40 LEAST ESSENTIAL
20
NOT ESSENTIAL
0
A B C D E
NOT ESSENTIAL AT
REASO NS
ALL
IN
FERENCE: From the above, it can be observed that, out of 42 respondents, 19
respondents i.e., 45% ranked Tax Benefits as a Highly Essential one for taking a policy in
the near future. And 16 respondents i.e., 38% ranked Better returns as an essential one. 12
respondents i.e., 28% ranked Invest in Child dreams as Least Essential.13 respondents i.e.,
31% ranked Post retirement income as Not Essential. The reason for taking the policy to
protect the family in case of unexpected occurrences has been ranked as Not Essential at
all by 13 respondents,i.e., 31%.

TABLE: 4.2.24
CHOOSING BAJAJ ALLIANZ LIFE INSURANCE TO TAKE A
POLICY IN FUTURE

CHOOSING BAJAJ No. of respondents Percentage

ALLIANZ LIFE
INSURANCE
Yes 47 47
No 53 53
Total 100 100
CHART 4.2.15

INFERENCE:
From the above table it can be seen that 47% of the respondents replied that
their choice will be Bajaj Allianz Life Insurance and 53% denied the same. Note that 58

89
respondents who are not having the idea of taking any life insurance policy in the near
future have been told to assume if they take a life insurance policy in distant future to
respond to this question.
TABLE: 4.2.25
CHANNEL TO OBTAIN BAJAJ ALLIANZ LIFE INSURANCE POLICY

CHANNEL TO OBTAIN NO. OF PERCENTAGE

BAJAJ ALLIANZ LIFE RESPONDENTS
INSURANCE
AXIS Bank 40 40
Financial Consultants /Agents 7 7
Others 0 0
N/A 53 53
Total 100 100

CHART 4.2.16

INFERENCE:
From the above, it can be inferred that a majority of the respondents i.e., 40 are
willing to obtain Bajaj Allianz Life Insurance policy from AXIS bank itself. And 7
respondents want to buy from financial consultants/Agents. And for the remaining 53% of
the respondents this question is not applicable.

STATISTICAL ANALYSIS

90
 In this section the researcher has used statistical tools in order to
analytically prove the study that has been undertaken. The tests had been used on selected
question as they prove in-depth significance of the research brought out.

Co-efficient of correlation:
Correlation is used to find out if there is any correlation or co-variance between
the two variables under the study.
It has been used here to analyze the relationship between familiarity among the
customers about different types of Bajaj Allianz life insurance policies and the various
initiatives taken by AXIS bank to promote Bajaj Allianz life products.
Q.17 Familiarity of the different types of Bajaj Allianz life policies (X)
Q.18 a) Frequent Notice of displays regarding Bajaj Allianz life products inside AXIS
bank(Y)

Q.17 Strongly Agree =11, Agree = 26,Neutral =14,Disagree =37,Strongly

Disagree=12.
Q.18 a) Strongly Agree =12, Agree = 22,Neutral =18,Disagree =33,Strongly
Disagree=15.
∑X = 313 ∑ x2 = 1133 ∑y = 317 ∑y2 = 1165 ∑xy = 1142 n(Sample Size) =100

Where Correlation
Co-efficient (r) = ∑xy/n - (∑x/n) (∑y/n)

___________ ____________
√∑x²/n- (∑x/n)√∑y²/n-(∑y/n)²

r = 11.42 – (3.13) (3.17)

√11.33-9.7969 √11.65– 10.0489

= 11.42 – 9.9221

1.2381*1.2653

= 1.4979

91
 1.5554

= 0.963

r : 96.3%

INFERENCE: Hence it can be inferred from the above that there is a very strong
relationship (96.3%) between the familiarity of different types of Bajaj Allianz Life
policies and the frequent notice of displays regarding the Bajaj Allianz Life policies inside
AXIS bank.

Q.17 Familiarity of the different types of Bajaj Allianz life policies (X)
Q.18 b) Come across Bajaj Allianz life insurance most of the times in AXIS bank
website.(Y)
Q.17 Strongly Agree =11, Agree = 26, Neutral =14, Disagree =37, Strongly
Disagree=12.
Q.18 b) Strongly Agree =10, Agree = 22,Neutral =13, Disagree =34,Strongly
Disagree=21

∑X = 313 ∑ x2= 1133 ∑y = 334 ∑y2= 1284 ∑xy = 1178 n =100

Where Correlation
Co-efficient (r) = ∑xy/n - (∑x/n) (∑y/n)

___________ ____________
√∑x²/n- (∑x/n)² √∑y²/n-(∑y/n)²

r = 11.78 – (3.13) (3.34)

√11.33-9.7969 √12.34
– 11.1556

= 11.78 - 10.4542
1.2381*1.2978

= 1.3258

1.6068

92
 = 0.825

r : 82.5%

INFERENCE: Thus it can be observed that there is a strong (82.5%) of correlation

between the familiarity of different types of Bajaj Allianz life policies among customers
and come across Bajaj Allianz life products in AXIS bank website.

Q.17 Familiarity of the different types of Bajaj Allianz life policies (X)
Q.18 c)Explanation of Bajaj Allianz life policies by AXIS bank employees through
phone calls/direct contact (Y)

Q.17 Strongly Agree =11, Agree = 26,Neutral =14,Disagree =37,Strongly Disagree=12.

Q.18 c)Strongly Agree =14, Agree = 27,Neutral =12,Disagree =35,Strongly Disagree=12

∑X = 313 ∑ x2= 1133 ∑y = 304 ∑y2= 1090 ∑xy = 1090 n =100

Where Correlation
Co-efficient (r) = ∑xy/n - (∑x/n) (∑y/n)
___________
____________
√∑x²/n- (∑x/n)² √∑y²/n-(∑y/n)²

r = 10.9 – (3.13) (3.04)

√11.33-9.7969 √10.9- 9.2416

= 10.9 – 9.5152

1.238 * 1.2877

= 1.3848

1.5942

= 0.868

93
 r : 86.8%
INFERENCE: Thus there is a strong (87 %)
correlation between the familiarity among the customers about different types of Bajaj
Allianz life policies and the explanation of AXIS bank employees about Bajaj Allianz life
insurance through phone calls or direct contact.

2.Co-efficient of correlation: It has been used here to analyze the relationship between
considering AXIS Bank as a one-stop shop for all the financial needs of a customer and
the factors that builds a strong relationship with customers.

Q.21 Prefer AXIS bank as a one shop for all the financial needs (X)
Q.20 a) Reliability factor in AXIS bank (Y)

Q.21 Strongly Agree =12, Agree = 22, Neutral =36, Disagree =22, Strongly Disagree=8

Q.20 a) Strongly Agree =37, Agree = 42,Neutral =12,Disagree =7,Strongly Disagree=2

∑X = 308 ∑ x2= 1072 ∑y = 405 ∑y2= 1735 ∑xy = 1323 n =100

Where Correlation
Co-efficient (r) = ∑xy/n - (∑x/n) (∑y/n)
___________
____________
√∑x²/n- (∑x/n)² √∑y²/n-(∑y/n)²

r = 13.23 – (3.08) (4.05)

√10.72-9.4864 √17.35 -16.40

= 13.23 – 12.474

1.11067 * 0.9745

= 0.756

1.082
= 0.699%

r : 69.9%

94
INFERENCE: Thus there is a 70% of correlation between the existence of the factor
reliability in AXIS bank and acceptance of AXIS bank as a one-stop for all the financial
needs.

Q.21.Prefer AXIS bank as a one shop for all the financial needs (X)
Q.20 b) Easy and advantageous banking over other banks in AXIS bank (Y)

Q.21 Strongly Agree =12, Agree = 22,Neutral =36,Disagree =22,Strongly Disagree=8

Q.20 b) Strongly Agree =15, Agree = 21,Neutral =24,Disagree =36,Strongly Disagree=4

∑X = 308 ∑ x2= 1072 ∑y = 307 ∑y2= 1075 ∑xy = 1060 n =100

Where Correlation
Co-efficient (r) = ∑xy/n - (∑x/n) (∑y/n)
___________
____________
√∑x²/n- (∑x/n)² √∑y²/n-(∑y/n)²

r = 10.60 – (3.08) (3.07)

√10.72-9.486 √10.75- 9.424

= 10.60 – 9.4556

1.11067 * 1.15113

= 1.1444

1.278532

= 0.895%

r : 89.5%
INFERENCE: Thus there is a strong (90%)
correlation between existence of the factor easy and advantageous banking over other
banks and acceptance of AXIS bank as a one-stop for all the financial needs.

Q.21.Prefer AXIS bank as a one shop for all the financial needs (X)
Q.20 c) Wide range of products and schemes (Y)

95
Q.21 Strongly Agree =12, Agree = 22,Neutral =36,Disagree =22,Strongly Disagree=8

Q.20 c) Strongly Agree =13, Agree = 24,Neutral =32,Disagree =28,Strongly Disagree=3

∑X = 308 ∑ x2= 1072 ∑y = 316 ∑y2= 1112 ∑xy = 1055 n =100
Where Correlation

Co-efficient (r) = ∑xy/n - (∑x/n) (∑y/n)

___________
____________
√∑x²/n- (∑x/n)² √∑y²/n-(∑y/n)²

r = 10.55 – (3.08) (3.16)

√10.72-9.486 √11.12- 9.985

= 10.60 – 9.7328

1.11067 * 1.0650

= 0.8172

1.182961

= 0.691%

r : 69.1%
INFERENCE: Thus there is a 69% of
correlation between existence of the factor wide range of products & schemes and
acceptance of AXIS bank as a one-stop for all the financial needs.

Q.21.Prefer AXIS bank as a one shop for all the financial needs (X)
Q.20 d) Better understanding of customer needs and provide expert advice.(Y)

Q.21 Strongly Agree =12, Agree = 22,Neutral =36,Disagree =22,Strongly Disagree=8

Q.20 d) Strongly Agree =15, Agree = 23,Neutral =33,Disagree =26,Strongly Disagree=3

∑X = 308 ; ∑ x2= 1072 ; ∑y = 321 ; ∑y2= 1147 ; ∑xy = 1093 ; n =100
Where Correlation
Co-efficient (r) = ∑xy/n - (∑x/n) (∑y/n)

96
 ___________ _________
√∑x²/n- (∑x/n)² √∑y²/n-(∑y/n)²

r = 10.93 – (3.08) (3.21)

√10.72-9.486 √11.47- 10.30
= 10.93 – 9.8868

1.11067 * 1.0797

= 1.0432

1.199272

= 0.869%

r : 86.9%
INFERENCE: Thus there is an 87% of
correlation, which is very strong, between acceptance of AXIS bank as a one-stop for all
the financial needs and existence of the factor better understanding of customer needs and
provide expert advice in AXIS bank

3.Chi-square test: When certain observed values of a variable are to be compared with
the expected value, the test static
Ψ² = (O - E) 2
E
Where Oi = observed frequency
Ei = Expected frequency
For more accuracy, Yates correction is used and the formula used is given below:
Ψ² = (O - E) 2
E
Here, Chi-square test has been applied as a goodness of fit, in order to know
the association between the persons who are planning to take insurance policy in the
future and the persons who prefer Bajaj Allianz life for obtaining a policy in the future.

Null hypothesis:

97
 There is no association between the persons who are planning to take an
insurance policy in future and the persons who prefer Bajaj Allianz life insurance to buy
an insurance policy in the future.
Alternative hypothesis:
There is an association between the persons who are planning to take an
insurance policy in future and the persons who prefer Bajaj Allianz life insurance to buy
an insurance policy in the future.
Calculation:
Planning to take any life insurance policy in future.

Yes No Row Total

Will Bajaj Allianz
Yes 30 17 47
Life insurance be your choice
for obtaining the policy in No 12 41 53
future.
Column Total 42 58 100
42% 58% 100%

Expected frequencies are given in the table:

42 *47 /100 = 19.74 58* 47/100 = 27.26 47

42 * 53/100= 22.26 58 * 53/100 = 30.74 53

42 58 100

Calculation of Ψ²:

Observed Frequency Expected Frequency (O – E) ² (O – E) ²

(O) (E) E

30 19.74 105.26 5.33

17 27.26 105.26 3.86
12 22.26 105.26 4.72
41 30.74 105.26 3.42

98
 17.33

Ψ² calculated value = ∑ (O – E) ² = 17.33

E

Calculated chi-square value is 17.33

Tabulated value:

Degrees of freedom: d.f. = (r - 1) (c – 1) = (2 – 1) (2 – 1) = 1

Where r= No. of rows and c= No.of columns.
Tabulated Ψ² value for 1 degrees of freedom at 5% level of significance is =
3.841
Since calculated Ψ² > tabulated Ψ² null hypothesis (Ho) is rejected. And
alternative hypothesis has been accepted.

INFERENCE: Thus, there is an association between the persons who are planning to
take an insurance policy in future and the persons who prefer Bajaj Allianz Life
Insurance to buy an insurance policy in the future.

4.PERCENTAGE ANALYSIS: This has been used here to calculate the number of
persons who wants AXIS bank to be their distribution channel in case of their willingness
to buy Bajaj Allianz Life Insurance.

Percentage Analysis: No. of respondents

Total no. of respondents
Out of 100 respondents, 47 respondents choice would be Bajaj Allianz Life
Insurance. Out of which, 40 respondents are preferring to buy from AXIS bank itself. The
percentage can be thus calculated as follows:

Percentage Analysis: 40 * 100 = 85%

47

99
INFERENCE: Thus it can be observed that 85% of the respondents are willing to buy
from AXIS bank in case of their choice will be Bajaj Allianz life insurance. for obtaining a
policy in the future.

100
FINDINGS, RECOMMENDATIONS AND CONCLUSION

5.1 FINDINGS

 The increase in the revenue for the sale of insurance policies by AXIS bank and the
increase in the retail segment’s profit and assets indicates that the financial performance of
the AXIS bank in bancassurance has been good and the bancassurance has also
contributed well to the retail segment.

 Though non-interest income as a % to operating profit,total revenue and working

funds were increased from 2004 to 2005,i.e., after the year they started earning revenue
from bancassurance,it has been decreased in the year 2006-07.With the increase in
performance in bancassurance,the same can be overcome.

 It is desirable also that the bank can improve its existing performance to increase its
return on assets and to reduce the operating expenses of the bank.

 Business per employee and profit per employee of the bank are decreasing over the
years that it can affect the sale of insurance policies that the bank’s immediate attention is
required.

 Capital adequacy ratio has been found satisfactory, as it has been above the
prescribed norms of RBI that it reveals the potentiality of AXIS Bank to perform
bancassurance operations. The other prescribed norm, which is NPA, also looks
reasonable. But, steps can be taken to reduce the same, as its % to customer assets has
been increasing over the years.

 Thus, it is quite clear that AXIS Bank is expected to take still more initiatives to
improve its existing performance in bancassurance. To analyse the ways and means for it,
responses are collected from the customers. It also indicates the necessity of further
initiatives and the areas where they need to focus and can cash in on the situation for
better prospects. Following are the justifications from the primary data:
FINDINGS, RECOMMENDATIONS AND CONCLUSION

 Though general opinion about insurance is pretty good among the people, most of the
respondents are uncertain about insurance as an investment option.

 Though most of the respondents are aware of Bajaj Allianz life, awareness needs to
be created about the fact that AXIS bank is cross-selling Bajaj Allianz Life Policies.

 Most of the respondents are not cognizant enough with the Bajaj Allianz Life
Insurance policies as the initiatives taken by AXIS Bank have been inadequate. This is
also proved statistically through correlation analysis.

 Though the other relationship building factors are found satisfactory among most of
the customers, emphasis is needed in the area of Easy and advantageous banking over
other banks since it is denied by majority of the respondents. As these factors, especially
the easy and advantageous banking determines the mindset of the customer in considering
the bank as an integrated financial solutions, this requires immense attention by AXIS
bank. The same is also proved statistically through correlation analysis.

 Majority of the respondents are satisfied with the customer services provided by
AXIS bank that it is a positive sign for bancassurance.

 53% of the respondents are not holding any life insurance policy so far that it is clear
that there are still lot of untapped source which the bank can explore and reap the harvest.

 47% of the respondents choice would be Bajaj Allianz life insurance for obtaining a
policy. Out of which, 30 respondents are planning to take an insurance policy in the
immediate future .The association between this two is also proved through Chi-square test.
Tax benefits, better returns, invest in child dreams, post retirement income, protecting the
family in case of unfortunate occurrences are the increasing order of preference in terms of
essentiality among most of the respondents in the near future for taking a policy

102
 FINDINGS, RECOMMENDATIONS AND CONCLUSION

 And out of 47 respondents who are in favour of Bajaj Allianz Life 40 respondents i.e.,
85% of the respondents prefer AXIS bank to be their distribution channel. This clearly
indicates the advantage the bank can make use of and if taken more initiatives it can even
make more customers to buy Bajaj Allianz life insurance policies from AXIS bank

5.2 RECOMMENDATIONS

 To strengthen the initiatives that are much needed to reach out more public and to
improve its existing performance, the following can be done;

 The display case can be located on the place where the customers can have a 100%
chance of looking into it like cash counters, entrance etc., The number of display cases can
also be increased and catchy slogans can be given.

103
 FINDINGS, RECOMMENDATIONS AND CONCLUSION

 To reach out more customers via website, AXIS bank can educate the customer by
sending frequent e-mails with attractive synopsis to the e-mail ids of the customer about
Bajaj Allianz life insurance policies with the link carrying them to the AXIS bank website.
More pop-ups window, frequent playing of graphical displays, can also attract more
customers who are visiting AXIS bank website.

 Employees of the AXIS bank can also be given more training about Bajaj Allianz
Life policies, as this will help them to explain and guide the customers better. Motivation,
immediate rewards and better incentive packages can also help them to do better. This
type of enabling sales oriented culture among the employees is the best possible way to
increase the productivity among the employees that it assumes greater significance.
Consequently the business per employee and profit per employee can also be increased
which is currently decreasing over the years.

 Emphasis can also be given to promote insurance as an investment option as most of

the respondents are uncertain about it. This will also help them to reach more customers.

 Most of the respondents are satisfied with the customer services that it is a positive
sign. But, since customer satisfaction is no customer loyalty, they will prefer to accept
more products with the same bank only if they find it advantageous. As most of the
customers denied the easy and advantageous banking in AXIS over other banks, it is
important for the bank to find out more ways to promote the same. This will definitely
help the bank to convince more customers to prefer AXIS bank as their one stop shop for
all their financial solutions.

 Most of the customers prefer to buy insurance policy for tax benefits and better
returns that the target customers can be identified.

104
 FINDINGS, RECOMMENDATIONS AND CONCLUSION

 As many of the respondents who wish to buy Bajaj Allianz Life Insurance Policy also
have opted AXIS bank as their channel, the bank can make use of it and retain its
customers.

 Thus by doing all this, the bank can increase its fee-based income, Return on assets as
well as the non-interest income, which leads to much progress of the bank.

5.3 CONCLUSION

The study thus points out that the financial performance of AXIS bank in
bancassurance has been good and it also provides a helping hand to the overall progress of
the bank. The prospect for bancassurance is also bright as AXIS bank is found to be a
preferable distribution channel among the customers who wish to buy Bajaj Allianz life
policy. With more initiatives and focus in the specified areas the bank can even have the
potentially of making more customers to buy Bajaj Allianz Life policy from AXIS bank.
With the merger of centurion bank, it can also take the advantage of more customer base
and can become more competitive. Thus with its increase in the existing performance, in

105
FINDINGS, RECOMMENDATIONS AND CONCLUSION

the upcoming years, AXIS bank will definitely play a predominant role in the
bancassurance industry and there by can contribute more to the upliftment of the bank.

106
 SCOPE FOR FURTHER RESEARCH

 As this study focuses only on the limited areas of chennai, it can be extended to other
areas for an in-depth analysis.

 This study concentrates only on the life insurance segment that it can be broaden by
including non life insurance.

 Comparative analysis can also be done among the performance of banks, which
undertakes bancassurance as this study focuses on the performance of AXIS bank alone

.
 BIBLIOGRAPHY & WEBLIOGRAPHY

BIBLIOGRAPHY:

BOOKS:

• Reddy, T.S. & Hariprasad Reddy.Y,“Management Accounting” Margham

Publications, Chennai, 2005.
• Lochanan Ravi .P “ Research Methodology” Margham Publications, Chennai,
Second Edition, 2003.
JOURNALS:

• Amel Dean Barnes colleen, Panetta Fabio & Sallen Carmelo “Consolidation and
Efficiency in the financial sector: A review of the international evidence”, Journal of
banking and Finance Volume No: 28, March 2000,Page numbers: 2493-2519
• Browne M.J & Kim.K- “An international analysis of Life insurance Demand”,
Journal of Risk and Insurance Volume No:60,January 1993,Page numbers: 616-634
• Carow Kenneth. A “Challenging Barriers between banking and Insurance”,
Journal of Banking and Finance Volume No: 25,April 2001.Page numbers: 1553-1571

WEBLIOGRAPHY:

www.google.co.in

www.Axisbank.com

www.Axisinsurance.com

www.insureegypt.com

www.insuremagic.com

www.watsonwyatt.com