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Bancassurance_NadeemMalik

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                            Banc assurance & Development of
                            Life Insurance Sector in Pakistan




Nadeem R. Malik

Group Manager – American Life Insurance Company




                     Full text reading:http://chn-news.com
Full text reading:http://chn-news.com



      Global Trends
        • Originated from France and had been a
          tremendous success all across Europe

        • Penetration in Asia is even bigger and
          fast growing

        • Banc assurance in the Middle East is a
          rapidly growing model

        • ALICO/AIG book of banc assurance
          business grew by ten folds in ME in the
          past 2 years




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Full text reading:http://chn-news.com



      Global Trends

             • More than 2,000,000 individuals in
               the ME region enjoy Alico/AIG
               banc assurance offerings

             • Gaining momentum in neighboring
               India

             • Pakistan too is not far behind, yet
               there is a lot to be done

             • Banc assurance will have a material
               impact on the distribution of
               financial services at large




Full text reading:http://chn-news.com
                     Full text reading:http://chn-news.com
            Bancassurance: Life Distribution Markets Range
            USA
     Australia
        Poland
     Hungary
      Sweden
            U.K.
     Germany
          Spain
        France
        Ireland
      Belgium
      Portugal
 Netherlands

                %0    10     20      30     40     50        60   70   80
Source: Limra




                     Full text reading:http://chn-news.com
                         Full text reading:http://chn-news.com
                Expected European life distribution mix, 2000-2010, %

                    45

                    40

                    35
       2000
                    30
       2005
                    25
       2010
                    20

                    15

                    10

                     5

                     0
                            Brokers    Company     Direct     Banc-   Internet / ITV
                                      Sales Force Marketing assurance
Source: Limra




                         Full text reading:http://chn-news.com
                Full text reading:http://chn-news.com



                         Factors influencing the development
                         of Banc assurance
Regulatory Environment                                      Demography


                             Selection of appropriate
                             Business model
   Organizations                                        Economic factors
    Positioning




                             Consumer Awareness




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          Full text reading:http://chn-news.com



                 The Banc assurance model is defined
                 by two main dimensions



                                    Approach to
Corporate structure
                                    distribution




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                           Selection of optimal mix to suit the overall
                           banc assurance Strategy
Segmentation of Bank’s database into various groups:

      Segmentation        Segmentation          Relevant
      of Business Line    of customer           Products             Channels
                          base



 • Retail            • Investment/       •   Life          Direct
                     Savings             •   A&H           • Over the Counter
 • Corporate                                               •Direct Sales Force (FSE)
                     • Lending           •   Savings
                                                           • Telemarketing
                     • Transaction       •   Credit Life
                                                           (in/outbound)
                     • Protection        •   Group Med.    • Direct Marketing
                                         •   Other
                                                           Indirect
                                                           • Embedded Agency (BSE)
                                                           • Worksite Marketing




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                       Full text reading:http://chn-news.com




                                    Approach to
                                    distribution

           Branch based                                Non-branch based

Ranges from simplistic to                      Remote channels including:
sophisticated                                  •Direct mail
•Over the counter sales of simple ‘bank-       •Statement inserts
  related’ products                            •Advertisements in customer magazines
•Leads generated and referred to in-branch     •Telephone marketing
  sales person - narrow, relatively simple     •Internet/digital TV
  product range
•Leads generated and referred to fully
 trained financial planners - needs analysis   A pure remote approach unusual - more
 and wide product range. Sales may be          likely that above techniques used to
 completed in-branch, home or workplace        support branch activity




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                  Full text reading:http://chn-news.com



                         Possible sales processes
Simple                                                         Complex



•Counter staff have simple ‘bank-        •Counter staff seek leads
  related’ products available            •Leads passed to financial planners
•Seek opportunities                      •Appointments set
•Complete sales                          •First meeting - needs analysis
                                         •Subsequent meetings - advice and
                                          recommendations
                                         •Application completed
                                         •Underwriting and acceptance
                                         •Policy delivery
                                         •Post sale service




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                Full text reading:http://chn-news.com


                      Proposition and product development


• Banc assurance will foster the innovative product development
  and mass distribution leading to horizontal as well vertical
  growth of the Life Insurance Industry in Pakistan

• Development of appropriate propositions to appeal to the
  varying customer segments, by pooling in expertise from both
  banking and insurance

• The added value for the bank customers is substantial since
  the solutions designed and distributed through banks are
  usually not available from other channels (Agents, brokers)


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                      Full text reading:http://chn-news.com



                              Best practice implementation

• Integration of two different cultures

  - generating continuous commitment

  - organising structure for lines of reporting, distribution and administration

• Ensuring adequate training for all involved in sales process

• Communication (internal and external) and co-ordination

• Giving the right weighting to banc assurance products




                      Full text reading:http://chn-news.com
             Full text reading:http://chn-news.com



                     Approaching and referring bank
                     customers


Build an integrated approach to banking and broader financial services


          Developing a clear business generation strategy


         Position lead generation as the fulcrum for success


       Create a true push sales culture throughout the bank




             Full text reading:http://chn-news.com
                   Full text reading:http://chn-news.com



                           Need to develop a new breed of
                           professionals for Banc assurance




Insurance
                                        Banks
•Sales orientated
                                        •Service orientated
• Thrive in pressurised situations
                                        • Avoid pressurised situations
• Value sale more than relationship
                                        • Value relationship more than sale
• Able to match needs to products
                                        • Need clear and specific guidelines
• Give low priority to administration
                                        • Give high priority to administration
• Target and success driven
                                        • Typically ‘team players’
• Typically ‘loners’



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           Full text reading:http://chn-news.com



                  Two key determinants of success




Merging two different               Ongoing commitment of
      cultures                       senior management




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                 Full text reading:http://chn-news.com



                       Achieve maximum synergy from
                       integration

• Greater integration = greater success

• Staff, customers, products and distribution

• Not easy, takes time

• Greater efficiency, more effective use of people

• Recognition of Banc assurance as core service/product by both
  Banks and Insurance Cos.




                 Full text reading:http://chn-news.com

				
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