Islamic Bancassurance and Wealth Management

1. Islamic Bancassurance and Wealth Management Azman Ismail azmanwong@yahoo.com www.iifin.com

2. What is Bancassurance? • Bankassurance • Merge between banking and insurance • Allfinanz • All financial services under one roof • Financial supermarket azmanwong@yahoo.com

3. What lead to the growth? • Main reason • Regulatory barriers between banking and insurance have diminished • Results in more “friendly” environment azmanwong@yahoo.com

4. Other reasons… • Banks =>one method to increase deposits • Insurers => alternative modes of distribution due to high agency costs • Insurers own and control relationships with customers. • Low expense ratio • Cross selling of services azmanwong@yahoo.com

5. Regulation & Market Leaders • USA • Financial Services Modernization Act of 1999 • Citigroup • UK • Financial Services Act • HSBC • France • most significant development • Credit Agricole • Malaysia • BAFIA 1989 => banking, finance company, merchant banking, discount house and money-broking businesses • Maybank azmanwong@yahoo.com

6. USA • Citigroup 100 million customers 100 countries • Total assets of $ 800 Billion and total revenues of $ 90 Billion • 15% contributed by the insurance • 16% of income thru’ insurance. azmanwong@yahoo.com

7. Citigroup’s subsidiaries • Citi Bank • Salomon Smith Barney (CitiFinancial) • SSB Citi Asset Management Group • Salomon Brothers Asset Management, • Smith Barney Asset Management • Citibank Global Asset Management. • Travelers Property Casualty and Travelers Life & Annuity azmanwong@yahoo.com

8. Travelers • Total assets > $ 50 Billion • Total annual revenue >$ 10 Billion • Net annual profit > $ 1 Billion. • Travelers contribute 15% of Citigroup net profit azmanwong@yahoo.com

9. UK • HSBC Group • > 5,500 offices in 80 Countries • Insurance comprises 8% of group profits • HSBC Insurance Holdings => back office operation • administration, underwriting, product development, sales training and compliance azmanwong@yahoo.com

10. HSBC Insurance Holdings • General Insurance Underwriting; • Life and Pensions Insurance Underwriting; • General Insurance Broking; • Personal Financial Services Advisory and Consultancy; • Medical Insurance Underwriting; • Insurance Agency; • Risk Management services, (including captive insurance management). azmanwong@yahoo.com

11. France 70% of new business 60% of total premiums Sogecap (Societe Generale) Predica (Credit Agricole) Natio Vie (BNP) Credit Mutuel 1970 1980 1990 2000 azmanwong@yahoo.com

12. Credit Agricole • leading retail bank • one family out of three • 25% market share of mortgage lending, • 21% market share of banking savings collection, • 11% market share of life insurance. • Assets >$500 billion azmanwong@yahoo.com

13. Predica • Total assets > $60 Billion in 1999; • Gross premiums > $12 billion; • Shareholders funds > $2 billion. • Net income > $150 million. • Expense ratio < 5% (compared with 25%-30%) • Distribution channel - 12,000 bank employees • Policies > 5 million, • Policyholders > 3.5 million. azmanwong@yahoo.com

14. Malaysia • Maybank • From Bancassurance to Islamic Financial Supermarket • Wealth Management azmanwong@yahoo.com

15. WEALTH MANAGEMENT/ FINANCIAL PLANNING Flashback… Product -Separated Premium • Channel • Banks & • Financial • Planners PROTECTION & SAVINGS Market -Sophisticated Product -Fused Premium Channel - Agency Market -Fairly Simple azmanwong@yahoo.com

16. Bancassurance  BanksAgency  Financial Planners Banks • Channel • Banks & • Financial • Planners Financial Planners azmanwong@yahoo.com

17. Between Bancassurance and Agency System WEALTH MANAGEMENT Banks FINANCIAL PLANNING Financial Planners azmanwong@yahoo.com

18. From Transactional Banking To Wealth Management Private Wealth Management Private Banking Preferred/Priority Banking Transactional Banking azmanwong@yahoo.com

19. Trends • In the year 2000 alone, the figure hit $13.6 trillion, and is currently still growing at a rate of 30 percent per year. In fact, there is now an emerging consensus in the banking world that, in order for top banks to stay lean, they must beef up their private banking portfolio • Citibank, Chase Manhattan and Merrill Lynch are currently managing more than $100 billion each.

20. “Wealth management has evolved rapidly over the past three years. Transparency, globalization and the growth of an entre- preneurial culture have led high net-worth clients to demand a new type of private bank. Such a bank needs a global presence, innovative investment ideas and strong investment banking capabilities.” - EUROMONEY azmanwong@yahoo.com

21. azmanwong@yahoo.com

22. EUROMONEY DEC 2006 • Private banks have never had it so good. Every region in the world offers a growth opportunity. Clients want an ever-increasing array of products and services. This leads to intense competition, evident in Euromoney’s latest annual private banking survey. But is further consolidation inevitable? azmanwong@yahoo.com

23. Who’s Who In Wealth Management azmanwong@yahoo.com

24. Back To Maybank… Insurance, Trustee Services, etc Client Banking Services, Investment Services etc azmanwong@yahoo.com

25. Bankatakaful Model BANK INSU- RER azmanwong@yahoo.com

26. From Banka To IWM OTHER OTHER BANK INSURER OTHER OTHER azmanwong@yahoo.com

27. Client-based model INVEST MENT ZAKAT /TAX CLIENT LEISURE FAMILY ETC BUSINESS & MGMT TRUSTEE SERVICES LOAN/ OD/ CARD azmanwong@yahoo.com

28. IWM Tools BACK OFFICE CLIENT PRO- DUCTS ISLAMIC WEALTH MGR CLIENT SOFT WARE CLIENT INFO & NEWS azmanwong@yahoo.com

29. Islamic Concept of Wealth azmanwong@yahoo.com

30. Islamic Concept of Wealth Management azmanwong@yahoo.com

31. The Software ANALYSIS CALCULATORS INTEGRATION ITERATION GENERATION FARAID FARAID HAJ HAJ EDU. EDU. RETIRE. RETIRE. ZAKAT ZAKAT TAX TAX azmanwong@yahoo.com

32. The Future Model? INVEST MENT ZAKAT /TAX TAKAFUL BROKING ASSET MGMT TRUSTEE SERVICES BANKING azmanwong@yahoo.com

33. Wassalam azmanwong@yahoo.com