the romanian bancassurance market in a european context

The Romanian Bancassurance Market in a European Context

© Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: [email protected] 1


Romanian Bancassurance Forum. From European Trends, to the Romanian Reality.

Bucharest, March 5th – 6th 2014

http://www.finaccord.com/

mailto:[email protected]



Agenda

Key factors that shape bancassurance markets

Key success factors for bancassurance

Bancassurance strategies on a meta level

The Romanian bancassurance market in an European context

The market for creditor insurance as a key segment for bancassurance

Three key developmentsin bancassurance

Summary





Key factors that shape bancassurance strategies

Bancassurance Strategies

1. Meta level: Regulation Forced divestment

2. Country level: Regulation Market characteristics





Key factors that shape bancassurance strategies

1. Meta level

New regulation: New capital requirements under the Basel III Accords

Forced divestment: Several banking groups have beenforced to divest assets

2. Country level

Regulation: Mediation laws, insurance shareholding of banks, product regulation

Market characteristics: Maturity, insurance penetration





Key success factors for bancassurance

Developed markets Romania

Commitment of banks to insurance ü Developing

Large market for investment-related insurance ü û

Large consumer lending market ü Underdeveloped

Tight and cultivated bancassurance partnerships ü Developing

Staff training ü Underdeveloped

Tailormade products for the bank ü Underdeveloped





Bancassurance strategies on a meta levelSegmentation of the world's 125 largest retail banking groups between those with captive underwriters, those with joint venture underwriters and those with both captive and joint venture underwriters, 2013

Source: Finaccord Global Bancassurance reports

Captive, 41.6%

Captive and joint venture,

13.6%Joint

venture, 10.4%

None, 34.4%





Bancassurance strategies on a meta level: captives and JVsRanking of banking groups by value of premiums of captive and joint venture underwriters, 2012


Rank Group Premiums (USD billion)

1 Crédit Agricole 29.002 ING Group 26.073 BNP Paribas 25.474 Bradesco 21.135 Crédit Mutuel 15.176 Lloyds Banking Group 13.137 Société Générale 13.098 HSBC 13.049 NongHyup Bank 9.1110 Intesa Sanpaolo 7.28

Total of above 172.49

Other retail banking groups in world's top 125

164.52

Grand total 337.01

French

French

French

Divesting

Divesting

"Role model of success"French





Bancassurance strategies on a meta level: strategic partnerships

Segmentation of 125 retail banking groups between those with and those without one or more strategic insurance partners, 2013


One or more strategic

insurance partners,

41.6%

No strategic insurance

partner, 58.4%





The Romanian insurance market in a European contextThe size of the Romanian life insurance market compared to other European markets, 2013


72.67

29.40

8.603.10

0.360

20

40

60

80

Italy Belgium Poland Czech Rep. Romania

EUR billion





The Romanian insurance market in a European contextThe size of the Romanian life insurance market compared to peer markets, 2013


8.60

3.10

0.36

0

2

4

6

8

10

Poland Czech Republic Romania

EUR billion





The Romanian insurance market in a European contextSegmentation of the Romanian life insurance market compared to other European markets


0%

20%

40%

60%

80%

100%

Italy Belgium Poland Czech Republic Romania

triggerProtection-related life insurance Investment-related life insuranceRetirement savings





The importance of the bancassurance channelEstimated distribution share of bancassurance in total life insurance, 2012 / 2013


0%

20%

40%

60%

80%

100%

Spain France Russia Poland Italy China Germany UK

Where would you see Romania?





Source: FCA

The UK market: Why customer centricity mattersCreditor insurance compensation paid to clients since January 2011





The creditor insurance marketSize of the Romanian consumer lending market compared to other European countries, 2013 (EUR

billion)


0

100

200

300

400

500

600

700

Italy Belgium Poland Czech Republic Romania

triggerMortgage balances outstanding Non-mortgage balances outstanding

602.0

214.9

107.1

41.823.2





The creditor insurance marketSize of the Romanian consumer lending market compared to peer countries, 2013 (EUR billion)


0

20

40

60

80

100

120

Poland Czech Republic Romania

triggerMortgage balances outstanding Non-mortgage balances outstanding

107.1

41.8

23.2





The creditor insurance marketSize of the Romanian consumer lending market compared to other EU countries, 2013 (EUR / capita)

0

5,000

10,000

15,000

20,000

25,000

Belgium Italy Czech Republic Poland Romania

Mortgage balances per capita Non-mortgage balances per capita


19,230

9,869

3,9492,778

1,089





The creditor insurance marketCreditor insurance premiums as a percentage of the total consumer lending market, 2013


0.60%

0.46%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

Average of CZ / ES / IT / PL Romania

Temporary incapacity / unemployment coverDeath / permanent disability cover





Three key developments in bancassurance

1) Banking becomes something you do, not go to

2) Customer centricity will become more and more important

3) Bancassurance will become in itself a multi channel approach





Summary

The global bancassurance market remains in a state of continuing flux caused by a variety of factors

In a large number of European markets bancassurance is the leading distribution channel for life insurance products

Romanian bancassurance is still a long way from the most advanced European markets

Creditor insurance and investment-related life insurance are likely to offer the greatest potential





Any questions?

Sources and related Finaccord publications:

Global Bancassurance: Strategies of the World's Top 125 Retail Banking GroupsCreditor Insurance in Latin America

Creditor Insurance in Northern, Central and Eastern EuropeCreditor Insurance in Southern and Western Europe

Life Bancassurance in the Asia-Pacific Region: Investment-Related Life Insurance and Retirement SavingsLife Bancassurance in the Asia-Pacific Region: Protection-Related Life Insurance

Life Bancassurance in Europe: Investment-Related Life Insurance and Retirement SavingsLife Bancassurance in Europe: Protection-Related Life Insurance

Life Bancassurance in Latin America: Protection-Related Life InsuranceNon-Life Bancassurance in Europe: Accident and Health Insurance

Non-Life Bancassurance in Europe: Motor and Household Insurance

Bancassurance country reports (covering 30+ different countries in the Asia-Pacific region, Europe and Latin America)



the romanian bancassurance market in a european context

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