best practices in bancassurance - insurance professional · entry – threats & opportunities...
TRANSCRIPT
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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]
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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
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Best Practices in Bancassurance
What is it?
How do we achieve it?
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Pillars of Bancassurance
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Goal Congruence
Insurance Companies
Customers
Banks
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Best Practices in Bancassurance
It is achieved by the following:
Goal Congruence Right Partnership
Product Mix
Distribution Mix
Innovation
Customer Empowerment Choice
Convenience
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Types of Agreements
Distribution Agreement
Marketing Agreement
Product Development & Support
Marketing Outsourcing
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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
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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
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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
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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
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Product Mix
Segment-wise Product Mix
Retail Customers Homeowners’
Motor
Travel
Medical
Investment Products
Corporate Customers Fire
Engineering
Marine Best Practices in Bancassurance 13
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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
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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
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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
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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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