1 / 28

BANCASSURANCE By Jean Louis PIQUET April 14t h, 2005

BANCASSURANCE By Jean Louis PIQUET April 14t h, 2005. hannover life re ®. Started in the 70's Take off in the 80's, with the development of unit linked product and saving products. 01#J. BANCASSURANCE. Introduction. Introduction. 2. 01#N. Introduction. BANCASSURANCE.

zeroun
Download Presentation

BANCASSURANCE By Jean Louis PIQUET April 14t h, 2005

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BANCASSURANCE By Jean Louis PIQUET April 14th, 2005 hannover life re ®

  2. Started in the 70's Take off in the 80's, with the development of unit linked product and saving products 01#J BANCASSURANCE Introduction Introduction 2

  3. 01#N Introduction BANCASSURANCE Introduction

  4. 01#N Introduction BANCASSURANCE Introduction

  5. 01#N Introduction BANCASSURANCE • But what is Bancassurance? • French Term • Standardized Mass Product • Easy to understand / easy to sell • Limited guarantee • Sold though a bank distribution channel Introduction 5

  6. 02#N Products BANCASSURANCE • What kind of products ? - Mainly life products that can be broken down in 3 categories . Financial and repayment products . Depositors products . Simple standardized package products Products 6

  7. 02#J Products BANCASSURANCE • Personal accident • Credit Insurance • Mortgages / Mortgage Endowments • Estate management • Group pension plan / asset management Products 7

  8. 02#N Products, Training and Profit BANCASSURANCE Products 8

  9. 03#J How to sell ? BANCASSURANCE • Bank network (branches, local office), • Direct and mail, • ATMS, • Telebanking, • World wide web. How to sell ? 9

  10. 04#J BANCASSURANCE Why ? • Bancassurance : why? - Diversification of banking activities - Improvement of customer loyalty - Convergences of bank and insurance activities - Complementarity in economical cycles - Complementarity of the risks - To put on end to the market share's decrease on the saving products - A new source of profit - One contact bringing financial and insurance solutions Why entering into ? 10

  11. 04#N BANCASSURANCE Why ? Credit Life Insurance Property Insurance Buy a house Motor Insurance Client Buy a car Why entering into ? Child Education Save for retirement Credit Life Insurance Unit Linked Product Life Insurance 11

  12. 04#N Why ? BANCASSURANCE • For a Bank • Intense competition : - Increase income generated - Reduction of the Bank fixed cost - Opportunity to increase productivity - Risk diversification • Customers preference - Shifting investment towards products with higher ROI - Favourable tax • Increase customer loyalty - Detecting the need - Detecting cultural / social change - Cross selling potential - Client oriented Why entering into ? 12

  13. 05#J Advantages ? BANCASSURANCE For Bank • Better hit ratio • Lower cost • Better processing technology • Higher knowledge of potential needs. Advantages 13

  14. 04#N Why ? BANCASSURANCE • For an Insurance Company • Source of new business - Access to new client easily - Geographic / Demographic new scope • Wider range of products • Products otherwise not feasible • Administration : Economy of scale • Defensive positioning Why entering into ? 14

  15. 05#N Advantages ? BANCASSURANCE For Insurers • Know customer -> risk assessments easier • Increase market penetration • Access to different market segment • Improve public image • Lower cost • Product that match the need (peace of mind) • Delivery at doorstep • Convenience in payment • Easy & automatic renewal Advantages 15

  16. 06#J European overview BANCASSURANCE • France : - 60 % of the market share- 35 % of the market share (Term Life Insurance )- 7 % of the market (Non Life Insurance)- 69 % of the market (New Individual Saving)- Bank establishing Bancassurance Company • Spain : - 65 % of the market (Life Insurance)- A 30 % growth in average since the 15 past years- Alliance between Bank and Insurance Companies- A regional specifity which quicken the Bancassurance set up (Regional Saving Bank = 50 % of the premium) European overview 16

  17. 06#N BANCASSURANCE European overview • Portugal : - 82 % of the market share- But a rather small market (= population 4 Mios) • Italy : - Amato Law 1990- From 8 % market share in 1992 to 50 % in 2002- 70 % market share for saving product ("unit linked" or "index linked") • Belgium : - The first Insurance Groups are Bancassurer - First distribution network - 56 % market share European overview 17

  18. 06#N BANCASSURANCE European overview • UK : - From 40 % Broker's market share in 1992 to 54 % in 1999- From 15 % Bancassureur's market share in 1990 to 9 % in 2003 • Germany : - Direct sale forces : 85 % in 1992 – 54 % in 1999- Broker : 8 % in 1992 – 20 % in 1999- Bancassurance : 1 % in 1992 – 18 % in 1999- Growth of markets shares of Bancassurance due to agreement between Bank and Insurers. European overview 18

  19. 07#N BANCASSURANCE The way to achieve BA • Distribution agreement (exclusive or not) • A Bank wholly or partially acquires a Company • The Bank start establishing a Insurance Company The way to BA 19

  20. 07#N BANCASSURANCE The way to achieve BA • Distribution agreement (exclusive or not) • Strength : - No cost for the bank - Product can be branded or co – branded • - Basic training for bank employee • Weakness : - Need a close cooperation between Insurance Company / Bank - No gain for Database access (or nearly nil) • - Insurance products must match the need • - Low reactivity to cultural and social change. The way to BA 20

  21. 07#N BANCASSURANCE The way to achieve BA • A Bank wholly or partially acquires a Company • Strength : - Easier access to Database - Dedicated products • - Better cooperation between Insurance Company and Bank • Weakness : - Higher cost for the bank - Higher reactivity to the change • - Bank employees need a training The way to BA 21

  22. 07#N BANCASSURANCE The way to achieve BA • The Bank start establishing a Insurance Company • Strength : - Dedicated products • - higher efficiency in detecting the needs and customers habits • - Very close cooperation between Insurance Company and Bank • Weakness : - Need staff training - High capital cost • - Need to acquire Insurance skill The way to BA 22

  23. 07#N The way to achieve BA BANCASSURANCE • Distribution agreement : • OIB & MIC • NBK & ALICO • BBK & BKIC • Merge and Acquisition : • ING (Netherland) – National Nederlanden & NMB Postbank • Arope Insurance (Blom Bank) • Dubai Islamic Bank & Aman Bank • Citigroup / Travelers Life & Annuity • Establishing a new company : • Bancassurance Lebanon (CA / Fransabank / Libano Française) • Sogecap / NSGB Life (Société Générale) in Egypt • Assurance Biat (Natexis) in Tunisia The way to BA 23

  24. 08#N Key of success BANCASSURANCE External Factors • Legal & Fiscal Environment i.e. Amato Law in Italy (+)i.e. Glass Steagal Act in U.S. (-) • Low rate of Insurance penetration Key of success 24

  25. 08#N Key of success BANCASSURANCE Internal Factors • Organisation / IT System integration • Remuneration / Training • Public image • Products sold Key of success 25

  26. 09#N Potential Risks BANCASSURANCE • Lack of sufficient experience • Complexity of the structure making supervisory oversight more difficult • Difference of culture between Bank and Insurance • Inadequate capital allocation • An aggregate risk exposure rather than acting as a hedge Potential risks 26

  27. 11#J BANCASSURANCE The Future • Shop Insurance :- Carrefour- Auchan • Insurance Bankers :- AGF (Banque AGF)- AXA (Banque Directe -> AXA Banque)- Prudential (Egg) The Future 27

  28. Thanks for your attention! 28

More Related