1 Rise of Bancassurance An Asia experience David Fried Group General Manager Regional Head of...
-
Upload
kimberly-walsh -
Category
Documents
-
view
218 -
download
1
Transcript of 1 Rise of Bancassurance An Asia experience David Fried Group General Manager Regional Head of...
1
Rise of Bancassurance An Asia experience
David Fried David Fried Group General Manager
Regional Head of InsuranceHongkong and Shanghai Banking Corporation
International Insurance SocietyInternational Insurance SocietyTaiwan, 13-16 July 2008Taiwan, 13-16 July 2008
2
Contents
Global DriversGlobal Drivers
Aging population brings in opportunitiesAging population brings in opportunities
BancassuranceBancassurance
3
Insurance markets in Asia are at different stages of development
Opportunities in Asia
China
India
Vietnam
Indonesia
Malaysia
Thailand
The Philippines
Macau
South Korea
Hong Kong
Taiwan
Singapore
Japan
Under penetrated Moderately developed Developed Saturated
Bancassurance is the fastest growing channel
4
Asia opportunity – paradigm shift in insurance spend as GDP’s hit threshold
* Data series of penetration start from 1970 unless specified. Real per capita GDP in log scale.
Source: Swiss Re Economic Research and Consulting
0
2
4
6
8
10
12
0.1 1.0 10.0 100.0
Australia
Japan(1976)
Singapore Hong Kong (1990)
Taiwan (1978)
South Korea
Malaysia
Life premiums/GDP (%)
ThailandChina (1982)
India
Vietnam (1996)
Philippines
Indonesia
Real per capita GDP, US$ ‘000
Current penetration of
emerging markets
Potential
Why now?
5
0
1020
30
40
5060
70
SouthKorea
China Taiwan SouthAfrica
India HK Brazil Singa-pore
Mexico Russia
US
$bn
0%
5%
10%
15%
Emerging Markets comprise 10% of world premiums – skewed to Life
Top 10 Countries = 87% of Life Market
Top 10 Countries = 64% of GI Market
0.11
0.22Life
GI
US$0.33tn
0
10
20
30
SouthKorea
China Taiwan SouthAfrica
India HK Brazil Singa-pore
Russia Mexico
US
$bn
0%
5%
10%
15%
6
Evolving customer needs:a Golden Opportunity for BanksOlder customers have different financial needs
Over 50’s possess 70% of all financial assets
These individuals and their assets need protection (insurance) and investing – no longer borrowing
Ageing is [accelerating] this shift as old borrowers de-leverage
Equally applicable in Developed and Emerging Markets
This “sea change” too big an opportunity to miss and should build on HSBC credit credentials
Financial needs Financial needs mapmap
Client time
Wealt
h
Youth Mature
High
Low
Insurance investment needs
Bank (Credit) Products
7Source: UN Population Ageing 2006
… but will have increased significantly in many countries by
2050
Why now?People are agingPercentage of total population aged 60 years or over in 2050
8
Bancassurance - catching on globally..
France:France: the largest bancassurance market, 62% of new premiums in 2005 earned through bank networks (favourable legislation, taxation)*
USAUSA:: 1999 legislation allowed insurance sales through banks but the expected revolution hasn’t materialised (low awareness, low growth)*
UKUK:: with 20% total premiums collected, bancassurance lags in market penetration (dominance of IFA sales force)*
China:China: >30% of new business from bancassurance (heavily biased by SP products)*
Sth Korea:Sth Korea: since regulatory changes in 2003, bancassurance has exploded. New Business Apr 2006 through Jan 2007 accounted for 46%collected premiums (heavily biased by SP roducts)*
HKHK:: 38% bancassurance weighted penetration in 2007 (legislation, low interest rates, bank expertise)**
OthersOthers:: Vietnam circa 0.5% penetration in 2005,
Indonesia circa 20% in 2004 up from 5% in 1998
Malaysia circa 45% in 2005.*
•Watson Wyatt Data
9
Bancassurance – a growing success in Asia
47% (unweighted premium)NilS. Korea
26%26% Singapore
37.5%1%Taiwan
48%6%Malaysia
4.61% (15.4% in private sector)NegligibleIndia
33.1%15.1% Hong Kong
33.9%Less than 10%China
New Life Insurance Premium New Life Insurance Premium
2005/062005/06
New Life Insurance Premium New Life Insurance Premium
19981998
New Premium from bancassurance as a percentage of total New Premium:
Source: various sources, Watson Wyatt and Swiss Re reports
10
Meeting Stakeholders Needs
CustomersCustomers
BankBank InsurerInsurer
One-stop shop,
holistic solutions
A tool for deepening banking customer
relationships & driving NFI
A new distribution channel in addition to the traditional Agency & Direct
• A three-way all-win solution• Maximising business performance and
potential
11
Integrated bancassurance defines where customers are
Global product (Credit Cards)
Personal banking
Commercial Banking
Global Banking and Markets
Private BankingGlobal
Institutions
Corporate
SME
HNWI
Mass Affluent
Mass Market
12
Products align with different market segments
2. Co-incidental
3. Simple standalone /
packaged
4. Advanced standalone
5. Advisory
• Accidental Death
• Personal Accident
• Hospital Cash
• Mortgage Reducing Term (cross sales for Fire buildings and contents)
• Creditor on Credit Cards
• Motor (with car loans)
• Personal Accident
• Home Contents
• Travel
• Basic Term
• Whole life
• Endowments
• Complex riders
• Critical Illness
• Income Protection
• Unit Linked Life
• Annuities
• As per ‘Advanced Stand-alone’ but formal recommendations made
TRANSACTIONATRANSACTIONALL
NEEDS BASEDNEEDS BASED
ADVISORYADVISORY
Sales complexity increases
The selling model(s) chosen impacts product, distribution channel, staff selection and training, marketing, sales processes and support etc
1. Targeted outbound for
simple products
2. Co-incidental
13
1 2 3 4 5 6 7Channel Brand Product U/W Claims Admin Invest
-ments
Client/insured
Distribution Manufacturing
Key is distribution…. Underwriting automatically follows
General Insurance 15% 65% 10% 10%
Life, Pensions& Investments (LPI)
45% 15% 10% 30%
Return on Equity (ROE)
>20% ~10% >30%
Insurers• Support and relationship building with banks • Understanding of banks and their needs• More internal support, blueprints, regional or
global academies within companies• Benchmarking against the competition
Banks• Develop expertise, understanding and models• Beauty parades, developing JVs and exclusive
relationships• Seeking value creation rather than just fee income• Starting to see the value in manufacturing – and
building their own
14
Align tasks performed with channel functionality
Lead generation
Qualify sale
Diary management
booking
Close sale
Post sales service
Account management
Branches
Internet
Telephone
F2F (FPM’s)
Good OK Poor
A bancassurance model leverages ALL distribution channels for different stages of the sales cycle
15
Different Bancassurance Models
IntegratedIntegrated
Broker’s Broker’s modelmodel
InsurerInsurerBankBank
InsurerInsurerBankBank
Non -Non -integratedintegrated
•Agents to place Agents to place at bank at bank branchesbranches
•Mine on bank’s Mine on bank’s client base - client base - telemarketingtelemarketing
•No agent at No agent at branchesbranches
•Bank’s RMs to Bank’s RMs to sellsell
BankBank InsurerInsurer
BankBank BrokerBroker
Partnership - Leads Partnership - Leads referral from bank referral from bank
on commercial on commercial business; brokers to business; brokers to recommend businessrecommend business
AgentsAgents
16
Thank youQ & A