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Jacob Flemming 17.09.2009 / Vienna

Eurapco – European Alliance Partners Company Avoiding Conflicts and Dissatisfaction between Multichannel and Sales. Jacob Flemming 17.09.2009 / Vienna. Index. Eurapco Multichannel concept & Business value proposition In each Market / Partner Best Practice: How to avoid conflicts?

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Jacob Flemming 17.09.2009 / Vienna

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  1. Eurapco – European Alliance Partners CompanyAvoiding Conflicts and Dissatisfaction between Multichannel and Sales Jacob Flemming 17.09.2009 / Vienna Eurapco - Creating value together

  2. Index • Eurapco • Multichannel concept & Business value proposition • In each Market / Partner • Best Practice: How to avoid conflicts? • Understanding management requirements in every channel • Increasing productivity without spoiling remuneration systems Eurapco - Creating value together

  3. Partners Eurapco - Creating value together

  4. Partners Eurapco - Creating value together

  5. TOTAL Business 2008 (million Euros) TOTAL 43’361 Eurapco - Creating value together

  6. Non life Business 2008Premium income (million Euros) TOTAL 31’412 Eurapco - Creating value together

  7. Life Business 2008 Premium income (million Euros) and market positioning TOTAL 11’949 13 n.a. 4 12 9 5 4 Note that the figures mentioned are not directly comparable between Partners as their accounting rules and requirements differ. Eurapco - Creating value together

  8. Factory Channel Clients Individual UW Policy adm. Post sales Accounting Investments IT Agents Brokers Groups Banks Corporate agreements Corporations Direct Multichannel concept Eurapco - Creating value together

  9. Business Value proposition and model Eurapco - Creating value together

  10. Business Value proposition and model Eurapco - Creating value together

  11. Preliminary considerations • Channels in different Markets can have different weight and development • Multichannel to diversify from main channel • Protect main channel or not ? • Use the strength of the brand or create a new brand ? • Price and Service Levels by channels ( personal lines ) • Not subsidize • Different loss ratios by channels • Certain channels are still marginal but we think have high growth potential Eurapco - Creating value together

  12. Multichannel = Channels conflicts ? ALLIANZ TO CLOSE ALLIANZ 24 • Allianz is to close its direct internet operation Allianz 24, moving the system to the Allianz web site, reports Insurance Day. • Allianz was said to be planning a new presence in the discount insurance market via another yet-to-be-launched online platform that will not use the Allianz brand name. The new platform will be pan-European. BRAND ISSUE • Allianz launched Allianz 24 in 2005, attempting to sell traditional policies via agents MAIN CHANNEL and cut-price policies via the internet. Allianz conceded this week that it was a “classic case of the collision between two different sales channels”. • Allianz 24 caused resentment amongst the insurer’s 10,000 agents because customers could buy the same policies for up to 30% less but then, having bought the policies online, demanded the same after-sales service from agents. PRICE AND SERVICE • Allianz 24 insured only about 300,000 vehicles online last year, out of nearly 9m vehicles in total. MARGINAL IMPACT Eurapco - Creating value together

  13. Covéa France – Covéa (2008) Channel distribution MARKET • French Market shrinks by 6% in 2008 ( Life -10.3%, Non life +4% ) • Life: 62% Bancassurance - Non life: 38% Direct, 35% Tied Agents COVÉA • Stable GWP in 2008 • 6% Market Share. Rank #8 overall, #1 in Motor, #1 in Property & Liability Eurapco - Creating value together

  14. Covéa Distribution Strategies • Covéa : Group Partnership structure. Composed of 3 independent Insurance Companies: • MAAF: Direct insurer, 574 points of sales • MMA: Tied agents, 1971 points of sales + Broker Business (Covéa Risks) • GMF: Direct insurer, 400 points of sales Besides: • Covéa Fleet: Fleet business through Maaf, MMA, GMF and brokers Eurapco - Creating value together

  15. Covéa Multichannel strategy • Covéa as such does not really have a strategy on this topic: these strategies are up to each Company. • Therefore, the 3 brands are competing against each other at a sales level • MAAF: business done by Maaf employees in Maaf shops; MMA: business is done by tied agents in MMA Agencies; GMF: business is done by GMF employees in GMF shops • MAAF, MMA and GMF propose online insurance: brand, prices are the same as in the shops. No internal competition, unlike some other companies (Groupama and their low-cost amaguiz.com) • Nexx: a MAAF daughter company (Online / Phone). Used for White Labelling and to have a different pricing policy without competing against the main distribution channel. • MMA/Covéa Risks: identical U/W guidelines and Terms & Conditions to avoid internal competition Eurapco - Creating value together

  16. EUREKO Description Sales Channel Eurapco - Creating value together Source: Company Data 2007/2008 figures not available

  17. EUREKO Brand Distribution channel Characteristics Direct Agents Brokers Bank • Leading multi-channel insurer in The Netherlands • Innovative service propositions • Strong portfolio of brands • Leading insurance company in Greece • Superior agent management; best recognized brand • Leading broker channel co-operation in Ireland • Highly successful and well respected multi-specialist financial services company. Distribution Strengths • Leading insurance company in Poland • Strong and loyal distribution network • Very strong brand (99% brand awareness) • Medium sized Life and Non-Life insurer • Niche market player,single distribution • Strong bancassurance as result of BCP relation • Developing operations in Romania, Bulgaria and Cyprus Eurapco - Creating value together

  18. Property & Casualty Occupational Health Pensions Broker Health Direct Banking Product channels Distribution channels The Netherlands - ACHMEA EUREKO • When there is a channel conflict product and price are the same, but the marketing strategy will be different. • We strive for market leadership in all segment and for a leading position in all distribution channels, direct, broker, bank distribution (currently #1 in direct and bank distribution and # 5 in broker distribution) • Key to our Dutch strategy are operational excellence and cost leadership Eurapco - Creating value together

  19. GOTHAER Channeldistribution GERMANY – GOTHAER / Description MARKET • 1,5% German market growth in 2.008 ( Life 1,8% - Non life 1% ) • Life 75% Agents and Brokers • Non life 89% ( Agents 45% Brokers 44% ) GOTHAER • 2,3% Growth ( Life 3% - Non life 1,7% ) • Market quota 2,2% number 12 in the ranking GWP Eurapco - Creating value together

  20. GOTHAER Multichannel strategy • Main channel: traditional ones (Agents and Brokers) • Complementary channels: companies Juanitos (white label) and Asstel (direct business) • Different branding by channels besides traditional which are under the original Company/Brand. • Price differs from one channel to the others, according to different cost structures • Service levels the same in all channels • Economic impact: • Volume very small, just start up companies Eurapco - Creating value together

  21. Länsförsäkringar Market shares non-life per regional insurance company 31,4 75% of the Swedish population lives outside Stockholm 43,0 52,2 41,6 31,3 40,0 57,9 16,7 38,9 36,8 41,5 38,5 45,9 55,6 27,7 50,2 50,9 35,8 44,5 49,1 41,5 36,7 30,1 43,7 Eurapco - Creating value together

  22. Länsförsäkringar Distribution of Life, Non-Life and Bank productsCommercial Lines Private Lines Eurapco - Creating value together

  23. Länsförsäkringar Channel Strategy • No channel conflicts on the personal lines • Brand Name endorsing each region, e.g. Länsförsäkringar Göteborg • Same price for all channels, services depends on channel Eurapco - Creating value together

  24. NON-LIFE1,824,000 487,000Life & Non-life LIFE418,000 167,000Life, Non-life & Bank 170,000Non-life& Bank 48,000Life & Bank BANK161,000 Länsförsäkringar Potential for increased customer commitment in LF Large customer base – few full-service customers Total: Approx. 3.3 million customers Länsförsäkringar in the market Eurapco - Creating value together

  25. CASER Channel distribution SPAIN – CASER MARKET • 7,6% Spanish market growth in 2.008 ( Life 15,2% - Non life 2% ) • Life 72% Bancassurance - Non life 66,9% ( Agents 38,6 Brokers 28,3 ) CASER • 11,6% Growth ( Life 30,4% - Non life -0,8% ) • Market quota 4% number 5 in the ranking GWP Eurapco - Creating value together

  26. CASER Multichannel strategy • Main channel Bancassurance / Shareholders • No different branding by channels • Coming from “White brand” in Bancassurance and Affinities • Price restriction diversification channels higher than highest in Bancassurance • Service levels the same in all channels • Economic impact: • Volume smaller than 22% but 40% in Non life • Results below average • No cross subsidising Eurapco - Creating value together

  27. 10 % Channel-Split 2007 in Non-Life (Portfolio) Swiss Market Mobiliar 2 % 0 % 3 % 1 % 25 % 12 % 70 % 87 % Total Market (CHF Mrd.): 15.9 Swiss Mobiliar Call-Centre Internet Brokers Agents Eurapco - Creating value together

  28. Business Model Internet Call Center(Mobi24) (Information only) (Assistance only) Agencies Agencies Some local Brokers Local Referal Partners Some local Brokers Local Referal Partners Swiss Mobiliar Today Tomorrow Internet Call Center(Mobi24) Using more channels, but all business canalised through local general agencies. Commercial business possible also through brokers Eurapco - Creating value together

  29. 5 Main Drivers for Successful Implementation of integrated Multi Channel Business Model consumer-friendly internet-products with optimized „bridges“ to agent channel identical price for identical coverage in all sales channels „protection" of portfolios and customers in multi-channel environment harmonized commissions for transactions over agents and internet high availability and consistency of customer data SwissMobiliar Eurapco - Creating value together

  30. Tapiola Market Channel distribution Finland / TapiolaMarket Description MARKET • Market value 2008:15bn • Finland is predominately a direct market • Exception; car dealers and tied agents / franchise office Tapiola • Tapiola Group is at present a financial conglomerate consisting of seven companies • 13.97% of the market = 3rd largest Group • 164 Sales point of which 61 are own offices and rest is exclusive service offices • 3000 employees Eurapco - Creating value together

  31. Tapiola Multichannel strategy • Agents = ; • Car dealers and • Agents = Franchise sales offices which are exclusive to Tapiola • No price or service differentiation between channels • Brokers mainly in industrial business • Increased importance of call-centres and internet as sales channels • Bancassurance related concepts increasing in importance • Increased importance of white-label products Eurapco - Creating value together

  32. Thanks for your attentionMuchas GRACIAS They asked rabbi Ben Zoma: Who is a wise man? He said The man that always finds something to learn from the others Eurapco - Creating value together

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