Level of Awareness Regarding Bancassurance and Choice of Insurance Product among Bank Customers in India

Transcription

1 Eurasan Journal of Busness and Economcs 3, 6 (), Level of Awareness Regardng Bancassurance and Choce of Insurance Product among Ban Customers n Inda Ndh GROVER*, G.S. BHALLA** Abstract The study endeavors to analyze the effect of awareness level regardng bancassurance among the ban customers on choce of Insurance product n Inda. A prmary survey of 55 ban customers, who have purchased bancassurance, reveals the followng facts usng ordered response Probt analyss: ) regardless of the present efforts of the bans, the expected level of awareness among the customers of bans regardng bancassurance s ether partal or sgnfcant; ) the expected probablty of complete awareness s very low; ) the banng sector needs to mprove upon the level of awareness regardng bancassurance among ther customers and the factors le frequency of dealng wth ban customers, ban brochures and other publcatons may prove to be helpful; and v) the reasons because of whch, three sources of nformaton namely, Newspapers, Ban Staff and Drect Mal are falng to spread complete nformaton regardng bancassurance among customers of the bans are needed to be analyzed. However, an executon of structural equatons model rejects the hypothess of nsgnfcant effect of level of awareness on choce of nsurance product n wea form. Keywords: Bans, Insurance, Ordered Response Probt Model, Structural Equatons Modelng JEL Code Classfcaton: G, G, C5, C35 * Assstant Professor (Guest), Panjab Unversty & Research Fellow, Guru Nana Dev Unversty, Inda. E- mal: ndh.grover85@yahoo.com, ndhgrover@gmal.com. ** Professor, Guru Nana Dev Unversty, Inda. E-mal: hellogsbhalla@gmal.com Acnowledgement: Authors are thanful to anonymous referees for the nvaluable comments that helped n sgnfcant mprovement n the qualty of paper. The correspondng author s thanful to Unversty Grant Commsson (UGC), New Delh, Inda, for provdng grant to complete the study under JRF(NET) program.

2 Ndh GROVER & G.S. BHALLA. Introducton Gone are the days, when bans used to earn nterest ncome from the dfference between lendng and borrowng rates charged to customers. Current maret condtons however, have put a stran on the nterest ncome as cost of borrowng funds have ncreased substantally and lendng has become too compettve to provde worthwhle nterest ncome (Kumar, 7). Due to whch, over the last three decades, there has been a phenomenal ncrease n the sze, spread and actvtes undertaen by bans n Inda (Rawan and Gupta, ). Most of the Indan bans have set up ther subsdares through whch they are provdng a wde range of specalzed fnancal servces le underwrtng of equtes and bonds, venture captal fnancng, leasng, nsurance etc. It has resulted n to transformaton from domestc banng to nternatonal banng. These changes were requred because a growng economy not only demands stronger and vbrant fnancal sector but also necesstates to provde wth more sophstcated and varety of fnancal and banng products and servces (Karunagaran, 7). Bans, n partcular, strde nto several new areas and offer nnovatve products, vz., merchant banng, lease and term fnance, captal maret/equty maret related actvtes, hre purchase, real estate fnance and so on. Thus, present-day bans have become far more dversfed than ever before. Therefore, ther entrance nto nsurance busness s only a natural corollary and s fully justfed too, as nsurance s another fnancal servce requred and desred by the ban s customers (Karunagaran, 7). Moreover, bancassurance ncome can be used to partly offset the nterest reducton n a compettve lendng envronment. Thus, sellng the bancassurance wdens the scope of commercal banng and helps to dversfy the maret rs. However, the bancassurance can sgnfcantly mprove the fnancal performance of bans f the customers are sgnfcantly aware about the bancassurance characterstcs. In an absence of sgnfcant awareness regardng bancassurance among customers of the bans, the objectve of ntroducng bancassurance wll be completely defeated. Thus, the analyss of the level of awareness and factors affectng that level assume mportance. The analyss wll not only help to now the extent of awareness but wll also help to draft sgnfcant polcy mplcatons to mprove the extent of awareness regardng bancassurance among the customers of ban. To the best of our nowledge, handful of studes s avalable on analyzng the level of awareness regardng bancassurance among ban customers. Amongst, the promnent studes by Lymberopoulos et al. (4), Rajumar (7), Popl and Rao (9) are mportant attempts to n the same drecton. It won t be erroneous to conclude that the study by Popl and Rao (9) s the Indan verson of Lymberopoulos et al. (4). Whle the later used data of 7 customers of Gree bans, the earler study utlzed the data of 5 respondents from Indan Captal New Delh. Both of these studes utlzed the same methodology based upon factor analyss and Ch-square test and derve the polcy mplcatons n same lne. In the Page 64 EJBE 3, 6 ()

3 Level of Awareness Regardng Bancassurance and Choce of Insurance Product lnes of Lymberopoulos et al. (4), Popl and Rao (9) also used factor analyss on a sample of 5 respondents and tred to fnd out () the awareness and wllngness on ther part to purchase nsurance products from bans () nvestgate the factors nfluencng customer s atttude towards bans and nsurance companes and () reasons to buy nsurance products from the bans. All these studes observed the low level of awareness and emphaszed the mportance of customer relatonshp management and fnally concluded by suggestng that bans should try to explot the exstng opportuntes to cross sell nsurance products through ther branch networ, by desgnng a clear and effectve maretng strategy amed at ncreasng awareness and customer s wllngness to choose bans as nsurance provders. However, Rajumar (7) n her study on customer preference towards nsurance servces and bancassurance too a sample of respondents from Centuran Ban of Chenna and used descrptve statstcs along wth Ch-square test to chec awareness and preference level of the respondents. The results revealed that ) 64 percent of respondents were aware about Centuran ban s te up wth nsurance companes. Tele callers on the part of bans was the man source of awareness; ) health nsurance by ICICI was the most preferred n non lfe nsurance polces; ) Ch-square test suggested low correlaton of Bancassurance clents wth Centuran s ban accounts. In sum, the study concluded that level of awareness about Bancassurance should be wored upon to mprove nsurance penetraton level. The revew of aforementoned studes depct that all of the above studes used factor analyss to analyze the factors affectng extent of awareness. The present study s though n same drecton but dffers n the context of methodology used and sample coverage. The study uses a sample of 55 ban customers of Indan commercal bans. The sample has been collected from three ctes of Indan Punjab namely, Amrtsar, Jalandhar and Ludhana. Instead of usng the ndgenous factor analyss, ordered Probt regresson analyss has been utlzed to spot the factors nfluencng extent of awareness among the ban customers regardng bancassurance. The analyss has been dvded nto four sectons. Includng the present ntroductory one, Secton- provdes database and methodology used for testng the set hypotheses. The bascs of ordered probt model have been dscussed n the same secton. The thrd secton offers emprcal exposton on extent of awareness, factors affectng extent of awareness regardng bancassurance and effect of awareness level on choce of nsurance products. The last secton concludes the study and offers some relevant polcy mplcatons.. Database and Methodology The present analyss s based on the prmary survey of the 55 ban customers, who have bought bancassurance. The analyss covers commercal bans.e., bans from each publc and prvate category. These bans ether operate n jont venture wth some Insurance provder or offer agency servces to them. For analyss purpose, 8 ndependent varables have been used for regresson analyss wth extent of EJBE 3, 6 () Page 65

4 Ndh GROVER & G.S. BHALLA awareness as polychotomous dependent varable. The dependent varable s categorzed nto four categores, defned as follows: y ; ; = ; 3 ; I f I f I f I f n o t a w a r e a b o u t B a n c a s s u r a n c e p a r t a l l y a w a r e a b o u t B a n c a s s u r a n c e s g n f c a n t l y a w a r e a b o u t B a n c a s s u r a n c e c o m p l e t e l y a w a r e a b o u t B a n c a s s u r a n c e Gven that the dependent varable represents the level of awareness usng four pont preferences scalng (see Annexure- for questoner), the smple categorcal dependent varable model s not applcable. Thus, the use of the ordered response/choce dependent varable s suggested by the researchers. Let X be the vector consstng of all explanatory varables affectng the extent of awareness regardng bancassurance among ban customers and β be the vector of all slope parameters to be estmated. Then, the lelhood functon may be wrtten as: ( ) L β,,, = P ( y = ) P ( y = ) P ( y = ) P ( y = 3) () W here, 3 * ( ) ( β ε ) P ( y = ) = P y = P x + ( ε β x ) ( β x ) = P = Φ * ( ) ( β ε ) P ( y = ) = P y = P x + ( β ε β ) ( β x ) ( β x ) = P x x = Φ Φ * ( ) ( β ε ) P ( y = ) = P y = P x + and ( β ε β ) ( β x ) ( β x ) = P x x = Φ Φ * ( ) ( β ε ) P ( y = 3) = P y = P x + ( ε β x ) ( β x ) = P = Φ Thus, the lelhood functon may be wrtten as: L ( β,,, ) = Φ ( β x ) Φ ( β x ) Φ ( β x ) Φ ( β x ) Φ ( β x ) Φ ( β x ) Φ Where, (.) represents cumulatve dstrbuton functon (CDF) defned as follows: () Page 66 EJBE 3, 6 ()

5 ( ) Level of Awareness Regardng Bancassurance and Choce of Insurance Product β x [ β x ] x e d ( x ); P r obt E stm aton π Φ β = β ( ) β x ( β x ) e and, Φ β x = d β x ; Logt E stm aton ( β x ) ( + e ) ( ) Maxmzng () wth respect to β,, a n d, the estmates of these parameters can be obtaned. The pont estmates of β are slope estmates whereas,, a n d are unnown threshold parameters representng threshold lmts of * y.when faced wth a ranng problem, we develop a sentment about how we feel concernng the alternatve choces and the hgher the sentment, the more lely a hgher-raned alternatve wll be chosen (Hll et al., ). For example, n our case, hgher the extent of awareness, the more lely a hgher value alternatve wll be chosen. These sentments (or extent of awareness) are unobservable and when they enter decsons are called latent varables denoted by * y. In categorcal response models, smple pont estmates of β cannot be used for nterpretaton purpose. The use of margnal effects s generally preferred whch may be obtaned as: P ( y = ) = φ ( β X ) β X P ( y = ) = [ φ ( β X ) φ ( β X )] β X P ( y = ) = [ φ ( β X ) φ ( β X )] β X P ( y = 3) = φ ( 3 β X ) β X In these expressons φ(.) denotes the probablty densty functon of a standard normal varate, and ts values are always postve. These margnal effects represent change n the probablty of beng completely aware about bancassurance because of a unt change n ndependent varable. The drecton of effect depends upon the sgn β of ; a postve value represent postve whereas, a negatve value sgnfes adverse mpact. To chec the mpact of extent of awareness on the choce of the product category (.e., standalone and ted up products), a structural equatons model (SEM) gven n Fgure- has been estmated usng the method of Full Informaton Lelhood (FIML). The standalone product nvolves maretng of the nsurance products through referral or corporate agency wthout mxng the nsurance products wth the (3 ) EJBE 3, 6 () Page 67

6 Ndh GROVER & G.S. BHALLA products/servces of the bans. Insurance s sold as one more tem n the menu of the products offered to the ban s customers, however retanng ther respectve brands of ther own. However, ted-up (complementary) products are those whch are tedup wth the normal banng operatons e.g., many bans n Inda, n recent years, has been aggressvely maretng credt and debt card where the cardholders get the nsurance cover for a nomnal fee or (mplctly ncluded n the annual fee) free from explct charges/ premum. Smlarly, the home loans/vehcle loans etc have also been pacaged wth the nsurance cover as an addtonal ncentve. For analyss purpose, the extent of awareness s beng hypotheszed to affect the customer s choce of product category. It has been hypotheszed that a person wth less awareness wll go generally for ted-up products. However, a customer havng hgh level of awareness wll purchase standalone product from the bans. Thus, the extent of awareness must affect the choce of standalone product postvely and vceversa. Fgure : Structural Equatons Model (SEM) for Evaluaton of Factors Affectng Extent of Awareness Regardng Bancassurance among Ban Customers Source: Author s Elaboratons Page 68 EJBE 3, 6 ()

7 Level of Awareness Regardng Bancassurance and Choce of Insurance Product In Fgure-, the varables n squares are determned varables amongst whch Bancaawareness and Standalone-Product are dependent varables and rests are the ndependent varables. Amongst sources of nformaton n the fgure, a unt value s assgned f the respondent has tced a source otherwse the varable s assgned a zero value. The lower porton of the dagram ncludes demographc varable namely, Gender, Educaton, Age and Income. However, the upper porton ncludes ban level varables namely, ) frequency of dealng representng the number of tmes the ban employee deals wth customers partcularly for sellng nsurance; ) te-up type representng te-up arrangements of the ban wth the nsurer. The varable s dchotomous n nature and assumes a value one for Jont Venture and two for Agency form of relatonshp; ) Frequency representng the frequency of a customer vstng the ban premses; and v) Duraton representng the length of relatonshp of customer wth ban. All of these varables except Standalone Product have also been used for the estmaton of aforementoned ordered response Probt model. 3. Emprcal Analyss The present secton deals wth the nterpretaton of the results obtaned through the executon of ordered Probt model. The elucdaton ncludes ) analyss of extent of awareness regardng bancassurance among the ban customers of Punjab; and ) explanaton of factors affectng extent of awareness regardng bancassurance among ban customers. A detaled analyss of margnal affects obtaned for each category of awareness has been performed that helps to dentfy the relevance of each polcy nstrument n spreadng awareness at ts dfferent levels. 3. Extent of Awareness Regardng Bancassurance Table comprses the probabltes of fallng the respondent n each category of dependent varable. The results have been obtaned usng the post estmaton.mfx, predct (p outcome()) command n STATA-. The command s used after executng the ordered Probt model and margnal effects have been computed for each category of outcome (.e,,, and 3). The results obtaned substantates that each ban customer, purchasng the bancassurance, has the hghest probablty of beng partally aware. The observed probablty of partal awareness s hghest to the tune of.454 followed by the probablty of sgnfcant awareness to the amount of.33. The magntudes of beng ether completely aware or unaware are.6 and.5, respectvely. Thus, the person whosoever purchases bancassurance n Punjab s lely to be ether partally or sgnfcantly aware about the bancassurance. Table : Probablty Dstrbuton of the Categores of Extent of Awareness Category Partculars STATA- Command Probablty P(Y=) No Awareness.mfx, predct(p outcome()).5 P(Y=) Partal Awareness.mfx, predct(p outcome()).454 P(Y=) Sgnfcant Awareness.mfx, predct(p outcome()).33 P(Y=3) Complete Awareness.mfx, predct(p outcome(3)).6 Source: Authors Calculatons EJBE 3, 6 () Page 69

8 Ndh GROVER & G.S. BHALLA Table represents the cut-off ponts obtaned for defnng the numercal value of dependent varable. In model (),, a n d are unnown threshold * parameters representng threshold lmts of y. When faced wth a ranng problem, we develop a sentment about how we feel concernng the alternatve choces and the hgher the sentment, the more lely a hgher-raned alternatve wll be chosen. Table : Threshold values of Latent Varable of Extent of Awareness Cut-off Ponts 95% Confdence Interval` Coeffcent Std. Error (See Model ) Lower Upper (-) (-) Source: Authors Calculatons For example, n our case, hgher the extent of awareness, the more lely a hgher value alternatve wll be chosen. The vsualzaton of Table- confrms that s very low n the comparson of actual value of dependent varable and thus, t s lesser lely that the customer wll have no awareness regardng bancassurance. Fgure : Mappng the Results of Ordered Probt Analyss of Extent of Awareness Source: Author s Elaboratons The scenaro can be explaned usng the Fgure. The horzontal axs represents the latent varable and the comparson of actual and threshold values have been performed. Gven that the threshold value for no awareness s low enough n comparson to actual value zero, the probablty of beng unaware s less enough. However, the dfference between actual and threshold value s least (.e., -.7=(-).7) for the category of beng partally aware and hence t s most lely that the customers purchasng bancassurance wll be partally aware wth the hghest probablty.454. The dfference between actual and threshold value s though less (.e., =.54) for the Category-III of sgnfcant awareness but observed to Page 7 EJBE 3, 6 ()

9 Level of Awareness Regardng Bancassurance and Choce of Insurance Product be hgher than the Category-II. Thus, the classfcaton has second hghest probablty to the tune of.33.in sum, the combned probablty of havng some nformaton (.e., partal and sgnfcant) about bancassurance s.687 among the ban customers of Punjab. 3. Factors Affectng Extent of Awareness Regardng Bancassurance Table 3 put forward the pont estmates of the parameters of Probt model. As mentoned earler, the ordnary estmates of slope parameters help only to decde the drecton of relatonshp among ndependent and dependent varables. Table 3: Pont Estmates of the Parameters of Ordered Probt Model Independent Coeffcent Standard 95% Confdence Z-Statstcs P> z Varables Error Interval Ban Level Factors Te-up Type (-) Duraton of Relatonshp wth Ban.98** Frequency of Customer s Vst to Ban Frequency of Ban Dealng wth Customer.79* Sources of Informaton to Customers Newspaper (-).85** Electronc Meda/Internet Drect Mal (-).** Telemaretng Frends/Relatves/Colleagues Sgn Boards and Hoardngs (-) Ban Staff (-).88** Ban Brochures /Other Publcatons.** Ban s Webste Exhbtons and Awareness Camps Organzed by Bans Demographc Factors Gender Customer s Age Educaton (-) Income.7* Notes: ***,** and * represent that the coeffcent s statstcally sgnfcant at, 5 and percent levels of sgnfcance, respectvely. Source: Author s Calculatons. The analyss of Table 3 support the nferences that ) the duraton of customer s relatonshp wth the ban postvely and sgnfcantly affect the extent of awareness regardng bancassurance; ) the frequent dealng of the ban employees wth customers regardng the bancassurance sgnfcantly enhances the level of awareness regardng bancassurance; ) among sources of nformaton, Ban Brochures and Other Publcatons contrbute sgnfcantly n spreadng nformaton regardng EJBE 3, 6 () Page 7

10 Ndh GROVER & G.S. BHALLA bancassurance; v) three sources of nformaton namely, Staff of the Ban, Newspaper, and Drect Mal to Customers are negatvely affectng the extent of awareness regardng bancassurance among ban customers; and v) among demographc factors, ncome of the consumer sgnfcantly contrbute n enhancng the extent of awareness regardng bancassurance among the ban customers. However, to stare the mpact elastcty of aforementoned factors and to defend the negatve mpact of three sources of nformaton namely, (.e. Ban Staff, Newspaper and Drect mal) aganst a-pror nformaton, the analyss of margnal effects s necessary (see model (3) for detals on margnal effects). Table 4 provdes the margnal effects computed for each category of the dependent varable. Table 4: Margnal Effects of Factors Affectng the Extent of Awareness Regardng Bancassurance among Ban Customers Dependent Varable Independent Varables Probablty of No Awareness P(Y=) Probablty of Partal Awareness P(Y=) Probablty of Sgnfcant Awareness P(Y=) Probablty of Complete Awareness P(Y=3) Ban Level Factors Te-up Type.3(.99).(.99) -.(.99) -.3(.99) Duraton of Relatonshp wth -.3**(.44) -.5**(.5).4**(.48.4**(.43) Ban ) Frequency of Customer s Vst to Ban -.5(.557) -.3(.558).3(.558).5(.557) Frequency of Ban Dealng wth Customer -.8*(.63) -.*(.7).*(.68).9*(.6) Sources of Informaton to Customers Newspaper.44*(.66).7**(.48) -.6*(.68) -.45*(.58) Electronc Meda/Internet -.6(.348) -.(.35).9(.35).6(.348) Drect Mal.54*(.63).9**(.6) -.3*(.6) -.5*(.57) Telemaretng -.(.978) -.(.978).(.978).(.978) Frends/Relatves/Colleagues -.4(.8) -.6(.36).5(.83).6(.95) Sgn Boards and Hoardngs.(.6).7(.66) -.7(.6) -.(.67) Ban Staff.4*(.7).3**(.44) -.5*(.7) -.48*(.9) Ban Brochures /Other Publcatons -.47**(.5) -.3*(.57).8*(.53).49**(.5) Ban s Webste -.8(.7) -.6(.74).5(.7).9(.7) Exhbtons and Awareness Camps Organzed by Bans -.37(.47) -.9(.336).(.4).44(.39) Demographc Factors Gender -.5(.83) -.3(.83).3(.83).5(.83) Customer s Age -.7(.) -.(.7).(.5).8(.) Educaton.(.947).(.947) -.(.947) -.(.947) Income -.5*(.64) -.6*(.7).5*(.69).6*(.64) Notes: ) ***, ** and * represent that the coeffcent s statstcally sgnfcant at, 5 and percent levels of sgnfcance, respectvely; and ) Values n parenthess of type () are p-values. Source: Author s Calculatons. Page 7 EJBE 3, 6 ()

11 Level of Awareness Regardng Bancassurance and Choce of Insurance Product The coeffcents are the elastcty that explans the percentage change n the probablty of the category of extent of awareness under evaluaton due to one percent change n the ndependent varable. Wth an objectve to dentfy the factors enhancng extent of awareness regardng bancassurance, the margnal effects on fourth category of complete awareness (.e., P(Y=3)) may be dscussed before other categores. The analyss of Table 4 confrms that the duraton of relatonshp wth ban and Ban Brochures/Other Publcatons are the sgnfcant sources of spreadng complete nformaton regardng bancassurance among the customers of bans. Frequency of dealng and ncome of customers are though postvely affectng the probablty of complete awareness but they are comparatvely less sgnfcant factors n the dspersal of awareness regardng bancassurance. The sources of nformaton bearng negatve coeffcent n Table 3, observed to be havng a postve margnal effects for categores of no awareness (.e., P(Y=)) and partal awareness (.e., P(Y=)). In between these three categores, the margnal effects of the sad three sources of nformaton are comparatvely more sgnfcant for later category than that observed for earler category. Hence, t may be concluded that Newspaper, Drect Mal and Ban Staff are helpful n dffusng partal awareness among ban customers. Thus, a ban nvolved n nsurance sellng must stress upon publshng and dstrbutng nformaton brochures regardng nsurance polces to enhance the extent of nformaton regardng bancassurance among the ban customers. 3. Awareness and Choce of Product The ncome from nsurance s mportant component of non-nterest ncome and wth an objectve to mprove the fnancal vablty of commercal bans, an mprovement n the nsurance premum s must. For enhancng the ncome from bancassurance, bans wll have to attract the customers for choosng approprate nsurance product. Through bancassurance, the commercal bans sale two categores of nsurance products; ted-up and standalone. The purchase of ted-up product generally represents forced sellng whereas, the purchase of standalone products represents customer s fath n bancassurance and thus, sgnfy customers wllngness to purchase the nsurance product from the ban. It s hypotheszed on a pror nformaton that level of awareness regardng bancassurance wll motvate the customers to choose standalone products. Thus, a structural equatons model (SEM) gven n Fgure-. wth the dependent varable standalone has been estmated usng the method of FIML. Table 5 provdes the pont estmates of structural model defned n Fgure.. The frst dependent varable standalone s dchotomous and second bancaawareness s polychotomous n nature. Through FIML, the model estmaton wll automatcally converge nto Probt estmaton wth standard normal varate. Thus, the pont estmates of equaton wth bancaawareness as dependent varable n SEM are approxmately equal to those EJBE 3, 6 () Page 73

12 Ndh GROVER & G.S. BHALLA obtaned from ordered probt model up to at most one decmal pont (Compare Table 3 and 5). Table 5: Awareness Regardng Bancassurance and Choce of Product Category Independent Varables Coeffcent Standard Error Z- Statstcs P> z 95% Confdence Interval Equaton : Dependent varable Bancawareness Ban Level Factors Te-up Type Duraton of Relatonshp wth Ban Frequency of Customer s Vst to Ban Frequency of Ban Dealng wth Customer Sources of Informaton to Customers Newspaper Electronc Meda/Internet Drect Mal Telemaretng Frends/Relatves/Colleagues Sgn Boards and Hoardngs Ban Staff Ban Brochures /Other Publcatons Ban s Webste Exhbtons and Awareness Camps Organzed by Bans Demographc Factors Gender Customer s Age Educaton Income Constant Equaton : Dependent varable Standalone Bancaawareness.4* Constant Notes: ***, ** and * represent that the coeffcent s statstcally sgnfcant at, 5 and percent levels of sgnfcance, respectvely. Source: Author s Calculatons. The vsualzaton of Table 5 reveals that the bancaawareness s though sgnfcantly affectng choce of nsurance product but the observed effect s not strong enough. It s worth mentonng here that the observed coeffcent to the tune of.4 s statstcally sgnfcant at percent level of sgnfcance wth a p-value of.64. Moreover, the observed coeffcent s dentcally equal to the margnal effect of sngle equaton Probt estmaton wth standalone as dependent varable and Page 74 EJBE 3, 6 ()

13 Level of Awareness Regardng Bancassurance and Choce of Insurance Product bancaawareness as ndependent varable wth same Z-statstcs and p-value. Thus, the hypothess of nsgnfcant effect of bancaawareness on choce of product has been rejected n wea form. 4. Summary, Conclusons and Polcy Implcatons The study carres objectve to analyze the extent of awareness regardng the bancassurance among the customers of the ban. The data of 55 customers of publc and prvate sector bans have been utlzed to dentfy the factors affectng extent of awareness among the target sample. Gven that the dependent varable level of awareness s polychotomous ordered response varable, the use of ordered Probt model has been preferred over the Classcal lnear regresson model. The executon of the model confrms that the ) the probablty of beng partally aware s hghest followed by sgnfcant awareness; ) probablty of beng completely aware about bancassurance s about 6 percent; ) the duraton of customer s relatonshp wth the ban postvely and sgnfcantly affect the extent of awareness regardng bancassurance; v) the frequent dealng of the ban employees wth customers regardng the bancassurance sgnfcantly enhances the level of awareness regardng bancassurance; v) among sources of nformaton, Ban Brochures and Other Publcatons contrbute sgnfcantly n spreadng nformaton regardng bancassurance; v) three sources of nformaton namely, Staff of the Ban, Newspaper, and Drect Mal to Customers are negatvely affectng the probablty of complete awareness whereas, found to be postvely affectng partal awareness; v) among demographc factors, ncome of the consumer sgnfcantly contrbute n enhancng the extent of awareness regardng bancassurance among the ban customers; and v) Thus, the hypothess of nsgnfcant effect of bancaawareness on choce of product has been rejected n wea form. Thus, the analyss revels that banng sector needs to mprove upon the level of awareness regardng bancassurance among ther customers. Regardless of the present efforts of the bans, the level of awareness among the customers of bans regardng bancassurance s ether partal or sgnfcant. Hence, a bg dstance has to be covered for enhancng the awareness up to complete levels. In ths drve, the frequency of dealng wth ban customers, ban brochures and other publcatons may prove to be helpful. The reasons because of whch, three sources of nformaton namely, Newspapers, Ban Staff and Drect Mal are falng to spread complete nformaton regardng bancassurance among customers of the bans are needed to be analyzed. Gven these polcy mplcatons n polcy outloo, the bans may spread the desred level of nformaton among the customers regardng bancassurance and help them to choose an approprate nsurance product. EJBE 3, 6 () Page 75

14 Ndh GROVER & G.S. BHALLA References Hll, R.C., Grffths, W.E., and Lm, G.C. (). Prncples of Econometrcs (4th edton). Hoboen, Unted States of Amerca: John Whley & Sons, Inc. Karunagaran, A. (7). Bancassurance: A Feasble Strategy for Bans n Inda?. RBI Occasonal Papers, 7(3), 5-6 Kumar, M. (7). Economcs of Bancassurance. Baners Mddle East, 85(), Retreved on July 3, 3 from << >>. Lymberpoulos, K., Chanotas, I.O. and Sourel, M. (4). Opportuntes for Bans to Cross- Sell Insurance Products n Greece. Journal of Fnancal Servces Maretng, 9(), Popl, G S. and Rao, D. N. (9). An Emprcal Study of Bancassurance: Prospects and Challenges for sellng Insurance Products through Bans n Inda. Worng Paper Seres. Retreved on December 9, from << >>. Rajumar, M. (7). A Study on Customer Preference towards Insurance Servces and Bancassurance. ICFAI Journal of Rs and Insurance, 4(4), Rawan, M.A. and Gupta P.M. (). Role of Informaton systems In Ban: An Emprcal Study n Indan Context. Valpa, 7(4), Annexure Dear respondents, Ths Survey s beng conducted to now your level of awareness regardng the nsurance servces provded by bans. The nformaton provded by you wll be ept confdental and wll be used for academc purpose only. Sec A Customer s Ban Informaton Q. Where do you hold your Ban Account? Name of the Ban/Bans.. 3. Q. Out of these Bans, name one you would le to dscuss here Q3. For how long have you been dealng wth the above ban? a) -3 Years [ ] b) 3-6 Years [ ] c) 6-9 Years [ ] d) or More than Years [ ] Q4. What type of Account do you hold n ths ban? a) Current A/C [ ] b) Savng A/C [ ] c) Recurrng A/C [ ] d) Term Depost A/C [ ] e) Salary A/C [ ] f) Any Other A/C [ ] Q5. How frequently do you vst the ban? Page 76 EJBE 3, 6 ()

15 Level of Awareness Regardng Bancassurance and Choce of Insurance Product a) Daly [ ] b) Twce a Wee [ ] c) Once a Wee [ ] d) Fortnghtly [ ] e) Monthly [ ] Sec B Bancassurance Awareness Q6. To what extent are you aware of the concept of Bancassurance? a) Not at all [ ] b) Partally [ ] c) Sgnfcantly [ ] d) Completely [ ] Q7. What s the source of nformaton and awareness of such servces? (Please Tc any or all). Sr. No. Sources of Informaton 7a News Paper or other Prnt Meda [ ] 7b Electronc Meda (TV) and Internet [ ] 7c Drect Mal [ ] 7d Informaton through Phone/Moble (Telemaretng) [ ] 7e Frends/Relatves/Colleagues [ ] 7f Sgn Boards and Hoardngs [ ] 7g Ban Staff [ ] 7h Ban Brochures/other publcatons [ ] 7 Ban s Web ste [ ] 7j Exhbtons/Conferences/Awareness Camps organzed by Bans [ ] Q8. How frequently does your Ban employee/insurer s representatve deals wth customers partcularly for Bancassurance servces? a) Daly [ ] b) Weely [ ] c) Monthly [ ] d) As and when Requred [ ] Q9. Whch product you have purchased? a) Ted-up [ ] b) Standalone [ ] Sec C Demographc Profle Q. Demographc Profle Name Gender a) Male b) Female Age a) 8-5 b) 6-4 c) 4-5 d) 5 and above Educaton a) Under graduate b) Graduate c) Post Graduate d) Any Other (specfy) Indvdual Income a) Less than Rs. b) Rs., 3, c) Rs. 3,- 5, d) More than Rs. 5, EJBE 3, 6 () Page 77