Transcript RCI- Alico AIG Life

Bancassurance in Central Eastern Europe:
Trends and Practices
Kyriakos Apostolides
Regional Vice President
Associate Distribution Networks & Direct Marketing
ALICO Central Eastern Europe
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ALICO: Best footprint at CEE
A multi product, multi distribution vehicle, with
proven track record, to deliver superior results,
being an important income generator for the
partner.
Presence in 13 countries with local dedicated
expert teams, able for fast implementation of
mutual plans with strong cultural local
understanding of market trends and practices.
Over 100 partnerships in force.
Over 5.5M individual clients through current
bancassurance relationships, with fast year on
year growth pace.
All ALICO’s local insurance companies are
financially sound, well capitalized and solvent well
above industry standards, highly regulated
entities.
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Greece
Bulgaria
Romania
Russia
Poland
Czech republic
Hungary
Slovakia
Ukraine
Latvia
Lithuania
Serbia
Cyprus
A Snapshot of CEE Region – The Environment
Country
Population
GDP per
Capita ($)
GDP Growth Rates
2007
2008
2009
2010
Greece
10.964K
32.005
4.0%
2.9%
(1.3)%
0.3%
Bulgaria
7.929K
6.857
6.2%
6.0%
(2.0)%
(1.0)%
Romania
21.681K
9.262
6.2%
7.1%
(4.1)%
0.0%
Russia
145.167K
11.807
8.1%
5.6%
(6.0)%
0.5%
Poland
38.231K
13.799
6.7%
4.8%
(0.7)%
1.3%
Hungary
10.198K
15.542
1.1%
0.6%
(3.3)%
(0.4)%
Slovakia
5.379K
17.630
10.4%
6.4%
(5.0)%
3.1%
Ukraine
48.241K
3.290
7.9%
2.1%
(8.0)%
(1.0)%
Czech Republic
10.230K
21.027
6.1%
2.8%
(4.2)%
1.4%
Lithuania
3.484K
14.086
8.9%
3.0%
(10.0)%
(3.0)%
Latvia
2.377K
14.997
10.0%
(4.6)%
(12.0)%
(2.0)%
Serbia
9.779K
6.782
6.9%
5.4%
(2.0)%
0.0%
Cyprus
850K
32.772
4.4%
3.6%
0.4%
1.2%
Source: International Monetary Fund, World Economic Outlook Database, April 2009
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Adverse short-term forecasts create the need for counterbalance strategies focused on
non-core income fees
A Snapshot of CEE Region
Insurance Market (Life and Non-Life)
Country
Greece
2008 GWP 2007 GWP
(€ ml)
(€ ml)
vs. ‘07
Life& NonLife
Insurance
penetration
vs. GDP
Emerging Markets
2008 Life
Premium
(USD bn.)
vs. 2007
5.310
5.216
2%
2.2%
Latin America and Caribbean
41
7.0%
926
777
19%
2.7%
Brazil
22
7.8%
Romania
2.259
1.988
14%
1.8%
Central & Eastern Europe
26
18.6%
Russia1
25.961
20.433
27%
2.3%
Russia
1
(28.0)%
Poland
14.205
12.209
16%
4.6%
164
19.0%
Hungary
3.367
3.675
(8)%
3.1%
China
96
40.9%
Slovakia
2.108
1.715
23%
3.1%
India
49
0.2%
Ukraine
3.036
N/A
N/A
2.5%
8
9.3%
Czech Republic
5.132
4.886
5%
3.5%
38
5.5%
Lithuania
576
564
2%
2.2%
Latvia
459
421
9%
2.0%
Serbia
589
565
4%
1.9%
Cyprus
690
N/A
N/A
4.1%
Bulgaria
South and East Asia
Middle East and Central Asia
Africa
Source: CEA, national supervisory authorities, insurance associations
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Source: Swiss Re sigma study “world insurance in 2008”
The Growth Potential
Current Market Trends
•
Slowdown of retail lending
► Shift to deposit bundles/guaranteed
savings/segmented risk protection offers
•
Wholesale funding / capital is scarce and costly,
affecting interest and investment income
► Engage in capital-hassle free models for non
interest fees to reach multi-income accelerated
growth dynamics.
•
Major Fx fluctuations
► Provide Fx-Linked Savings/Cautious-conscious
choice / transparency.
•
FI players under review of their strategy / plans
► Create/deliver core business innovative proposals
for growth / expansion / country presence / core
using insurance as a smart tool on both sides of
focus / size of balance sheet
balance sheet.
Front line sales desks facing a new challenging
sales environment
► Raise respective supportive field deliveries.
Leverage more on DM / Bundled approaches.
Renew focus on existing clientele.
•
Non - interest income of rising importance
► More focus on core and non-core income
opportunities (retention of core business & x-sell,
up-sell as antiattrition tools and income
generators) to maximize fees per client.
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Strategic choices:
Price
Innovation
Convenience/ effectiveness of execution
Segment and focus
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Bancassurance in Central & Eastern Europe
Bancassurance activity is fairly new within major CEE’s players.
Many players have not built yet the necessary experience and know-how to generate
income from insurance related business, based on a fully integrated model of sales.
Meet the scorecard
Getting the right partner with the right know-how
is critical for success
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A successful insurance partner is the one which:
►Has a proven track record to deliver planned results.
►Has expertise to support and is ready to invest in all distribution
channels (bundled, telemarketing and over the counter).
►Designs the right distribution channel and best fit product sequence for
maximum results, being fully complementary to core strategies.
►Provides long term customer security – min counter party risk.
►Offers a transparent value added product palette to the end customer.
The Traditional Insurance Sales Model
Customer acquired … Customer pays … Customer leaves
Prospecting
Embedded:
 Credit Life
(cards)
In-branch:
 OTC
Direct:
 Outbound TM
 Inbound TM
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Offer
Acquisition
One Offer
One Product
Lapse
Cancels
Dies
An effective Sales Model
Significant opportunities to embed insurance into banking services
Time Deposits
ATM
Foreign Currency
Shares Trading/
Financing
Phone banking
Current Accounts
Mutual Funds
Checking
Savings Accounts
Overdraft
Business Loans
Mortgage
Personal Loans
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Income
Education
Assets
Health/Medical
Savings
Life
Travel Accident
Accident
Based on deep understanding/experience of partner’s strategy/needs.
Create and implement a step-by-step approach on projects that match core business.
An effective Sales Model
Multiple channels... Multiple Offers … base on a full Range of Products
Prospecting
Embedded:
 Credit Protection
In-branch:
 OTC
Direct:
 Outbound TM
 Inbound TM
 Mail
 Inserts
 Customer Service
Calls (welcome,
thank you,
birthday,
anniversary)
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Offer based on:
 Data Base Marketing
 Customer Profiling
 Segmentation
Product
Customization
 Customer
Relationship
Management
 Predictive Modeling
Acquisition based on:
Products:
 Credit Life
 Accident & Health
 Bill protection/Lifestyle
 Individual Savings
 Accident & Health
Products
 Broken Bones
 Critical Illness
 Female cancer
 Hospital Daily benefit
 Accidental death and
dismemberment
 Pure endowment
 Term Life
 Savings top-ups
Based on a lifecycle approach linked
with customers’ evolving needs
Prospecting
Offer
First Stage
Biggest financial impact and
simple execution
Maturing
Expand and improve existing
activities
State-of-the-Art
Continuous sales approach at
all touch-points in the
customer’s lifecycle
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Acquisition
Based on a fully integrated approach
Build a fully complementary tailor-made marketing plan on partner’s needs and local strategy.
•
Integrated approach across all sales channels for sequenced, tailored & timely offers supported by a fully
dedicated expert local team.
•
Based on full deployment of synergy projects, estimated fee income for the partner will potentially represent
a significant profit component: min. 10% at 2nd year, best practice can reach 30% including Bundled offers,
Direct marketing and Over the Counter sales model.
Active customers
Ex-customers
Acquisition
programs
Loyalty / Retention / cross sale
programs
Win-back
programs
HOW?
Advertising
Internet
Mailings
Inserts
Outbound
calls
Inbound calls
Over the counter
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Welcome Calls
Activation calls
Up-sale offers
Cross-sell offers
Service calls opportunities
E-mailings
Mailings
In-branch / POS offer
Bundled product offer
Retention unit
Misses payment & lapse rescue
CANCELATION
Prospects
SALE
WHAT? WHO?
•
Calls
E-mailings
Mailings
SMS
on former
customers
Distribution methods / touch points
Branch / POS
Product sequence
In / Outbound TM
Death/
Disability Benefits
PPI
cross sell
Hospital/Surgical
Benefits
Entry campaign/
Welcome
Applicable to all
Female Cancer
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A&H
initial
coverage
bundled
Loan Upgrades
protection
Traffic accident
Broken Bones
PPI
bundled
End of loan
Proposal
Segmented
Life / Savings
products
A customer-centric, multi-distribution, multi-product
offering model
Bundled Product (Paid by Client)
 Cardholders’ protection plans
 Credit shield for credit cards
 Consumer loans with insurance
 Auto loans with loan insurance
 Mortgage loan with loan insurance
 Education fee loans with Life protection
Bundled Product N.A.C.
(No Additional Cost for Client)
 Travel and Accident & Health cover
for cardholders
Direct Marketing
 Joint marketing initiatives to promote easy
and inexpensive solutions tied to financial
products
 Special projects to enhance performance
of banking products
(e.g. welcome/activation telemarketing)
 Product sequence designed to offer
the right product to the right customer
at the right time
Over The Counter Sales
 Long-term savings products for
retirement / education
 Accident and Health products
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Partnerships: working models
•Open architecture
(along with captives/reinsurers).
•A fully integrated bancassurance model
(single provider).
•Joint ventures
(joined shareholdings with FIs to serve a fully
integrated tailor made approach).
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Managing Partnerships: Relationship management
Maximize Effectiveness/Interaction/Commitment
Teams Involved
• Distribution
• Profit centers
Partner
Vendor
• Legal / compliance
• Finance
• IT / Back Office
Tools (Internal)
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Tools (External)
•
Regular reports / reviews
•
Penetration / revenue regular reports
•
Sales/persistency reports (kpis)
•
Quarterly strategic reviews
•
Database analysis / segmentation
•
Reciprocities
•
Claims management
•
Ad hoc communication
•
Market research / mystery shopping
•
Ad hoc communication
Key success factors in model execution
• Understanding / speaking the language
• Dedicated-expert teams / territorial strength /
cultural understanding
• Financial strength
• Global to local
• Budgeting / Monitoring / Incentivizing
• Priorities / Convenience
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