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TRANSCRIPT
Best practices & Challenges in bancassurance
Maximizing the Profits
Manoj Kumar, Chartered Insurer
ACII (UK), CPCU (USA), ARe (USA), ARM (USA), FIII (India). MBA
Email: [email protected]
Agenda
Best Practices in Bancassurance
Types of Agreements
Unlocking the Hidden Profit
Product Mix in a Bancassurance Partnership
Entry – Threats & Opportunities
Strategic Advantages for Banks
Challenges Ahead
Best Practices in Bancassurance 2
Best Practices in Bancassurance
What is it?
How do we achieve it?
Best Practices in Bancassurance 3
Pillars of Bancassurance
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Goal Congruence
Insurance Companies
Customers
Banks
Best Practices in Bancassurance
It is achieved by the following:
Goal Congruence Right Partnership
Product Mix
Distribution Mix
Innovation
Customer Empowerment Choice
Convenience
Best Practices in Bancassurance 5
Types of Agreements
Distribution Agreement
Marketing Agreement
Product Development & Support
Marketing Outsourcing
Best Practices in Bancassurance 6
Types of Agreements
Distribution Agreement
Exclusive, Non-Exclusive
Features:
Standard Products
Standard Distribution Channels
Focus on Market Penetration
Simple Products – PA, Home, Travel, Car, etc.
Lower Commission Levels
Best Practices in Bancassurance 7
Types of Agreement
Marketing Agreement Focus on marketing / sales
Selective products
Joint marketing Platform banking
Direct sales
Complex products Life, Investment, Pension, etc.
Commercial Line Products
Higher Commission Levels Best Practices in Bancassurance 8
Types of Agreement
Product Specific Agreement
Specific Product – tailored
Exclusive
Long term
Value addition from the bank
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Types of Agreement
Marketing Outsourcing
Call Center Outsourcing
Sales Team Outsourcing
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Unlocking the Profits
Untapped Resources within Banks
Trade Finance
Corporate Lending
Retail
Cards
Accounts
Deposits
Personal Loans
Mortgage Loans
Investment Banking – Mutual Funds, Bonds Best Practices in Bancassurance 11
Product Mix
Depends on the following factors:
Bancassurance Life Cycle
Early, Youth, Matured
Customer Segment
Retail, Corporate
Customer Profile
Age, Wealth, Socio-economic Background
Distribution Channels
DM, CC, Branch Network, Direct Sales
Best Practices in Bancassurance 12
Product Mix
Segment-wise Product Mix
Retail Customers Homeowners’
Motor
Travel
Medical
Investment Products
Corporate Customers Fire
Engineering
Marine Best Practices in Bancassurance 13
Product Mix
Products as per Bancassurance Life Cycle
Early Stage: PA, Home, Travel, Car
Youth Stage:
Child Education
Pension Plans
Growth Plans
Matured Stage:
Bonds
Mutual Funds
Structured Products Best Practices in Bancassurance 14
Product Matrix
Type of Products
Bancassurance Life Cycle
Early Youth Mature
Simple Products √ √ √
Complex Products √ √
Structured Products √
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Threats & Opportunities
Threats – Entering into Bancassurance
Heavy Investment into IT and Manpower
Conflict with Core Banking Products
Service Issues – Reputational Risk
Mis-Selling
Changing Goal Post for the Banks
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Threats & Opportunities
Opportunities – Entering into Bancassurance
Fee Income
One-Stop Shop
Customer Retention
Customer Acquisition
Diversification of Risk
Gateway to Risk Taking – Creating an Insurance Subsidiary
Best Practices in Bancassurance 17
Strategic Factors for Banks
Closer to Customers
Long Term Relationship
Known Spending Pattern
Convenience
Easier Communication
Generally better equipped IT
Distribution Network – Better Spread Best Practices in Bancassurance 18
Challenges Ahead!
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Challenges Ahead
From a Banker
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Challenges Ahead
To become a Financial Consultant
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Challenges Ahead
From a Seller
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Challenges Ahead
To a Marketer
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Challenges Ahead
From a Broker
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Challenges Ahead
To Risk Taker (Insurance Company)
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