Business Analysis of Competing Insurance Tie-Ups for a Bank-An Action Research

The phenomenal growth of Private Life Insurers within a short period owes much to the diversified channel they have used for selling policies. The bancassurance channel was the major one the insurers exploited when they started operations in India. The period 2005-2010 was marked (or is it marred) by tie-up frenzy in the Insurance space wherein insurers were head over heels looking for bancassurance partners. The paper examines a Business analysis proposition of one such banker looking for a new suitor in insurance for a possible tie-up, by going back in time by a few years.

Further, the paper examines and explains the mine-field of parameters to be looked into even to short-list a few insurers and match it, by analytically codifying it. The difficulty to do an equivalency chart of comparison and then to decide is explained thread-bare, which is a challenge for any business analyst. Needless to say the setting of the insurance industry, the practices that prevailed then and the short-termism of the interest groups is captured vividly. How such decisions unfolded in the macro scene in the form of 'unit-linked insurance plan (ULIP) fiasco' which is the largest rip-off in the financial services sector history of the country is clearly captured in the paper. The evaluation of the Insurance tie-ups and how the short-term commercial considerations played out in the macro scene in the form of a 'catastrophe' of a mis-selling scam, has high relevance and learning for Regulators and Public Finance/Policy experts. In short, a learning on how to smell 'rat'.