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The 3 Middle East Insurance Forum: Bancassurance
The 3 Middle East Insurance Forum: Bancassurance
Mukul Gupta
CFO & Head Bancassurance
Bajaj Allianz Life Insurance, India
“There is no stronger force than an idea
whose time has come.”
Victor Hugo
(19th Century French Novelist)
100%
90%
80%
70%
60%
50%
40% 82%
72%
30% 65% 60%
50%
20%
10% 19 % 19 % 14 %
0%
Banks, post office Insurance co. Employees Agents Brokers - IFAs Others
60
50 In India, Bancassurance
P e rc e n ta g e
20
10
Countries
50% 50%
Insurance
Motivation
Selection of
&
Customer
Training of
Selection Segments
Bank Staff
of Partner
Sales &
Product
Distribution
Offerings
Model
Industry Evolution…
Up to 1999 1999 till 2004 2005 onwards
Confidence in Bancassurance
Agency model
Agency only replicated BA takes 20% + share among
Distribution
Focus 800K Agents Private Players
Bancassurance in
development stage Fastest Growing Distribution
Channel
PF/Retirement funds
14%
Client Habits : Savvy Customer Base with both high branch traffic and
Off-Site Banking habits.
Joint operations were rolled out in January 2002 with 25 FSCs covering 30
Bank Branches.
Case Study : Standard Chartered Bank & BALIC
Model Results
A designated persons stationed in The Benchmark for the Indian
each Branch selling Insurance. Industry for Bancassurance
Selling thro 11 Channels of Bancassurance contributes 20%
Distribution :- Branch Banking, of total income from Retail
Priority Banking, Outbound Sales Banking operations
Team, Mortgages, Credit Cards etc Avg Productivity per person is
Over 250 Sales Staff dedicated over 12-15 policies per month
selling Insurance in these and Avg Ticket Size stands at
Distribution Channels USD 1,100.
Dedicated Operation Staff for Projected GWP of USD 100 mio
processing SCB Proposals for FY 05-06 & earnings to Bank
Fortnightly Saturday Schools for to be in range of USD 25-30 mio
Sales Staff Regular UnitLinked Products fit
in the clients needs of the Bank.
Distributions servicing different Customer Segments
Channels of Distributions
Retail High
Loan New
Walk-in Networth SMEs
Customers Customers Customers
customers
Channel Distribution : Standard Chartered Bank…
15% 1%
12%
72%
Client Habits : Branch Walk-ins for transactions with advice from the
Branch Staff / Manager for all financial decisions
Total Life Market Size at Rs. 250 billion (USD 5.5. Bn)
Consideration for Banks…
1. Increase in Fee Based Income
6. Provide integrated
financial services tailored to
2. Reduce reliance on
the life cycle of customers
16 2/3 % interest spreads as the major
1 source of income
16 62/3 % 2 %
16 2/3
16 2/3 % 16 2/3 %
5 3
3. Leverage extensive
customer base
16 2/3 %
4
5. Reduce risk based capital
req. for the same level of
revenue
4. One stop shop for all
Financial Services
Consideration for Insurers…
Immediate access to New
Markets
Improve sales
Increase in Market
effectiveness & after sales
Penetration
service
Insurer
Reduce reliance on
Develop new financial traditional distribution
products more efficiently channel
European Life bancassurers progressively abandon the intermediary role to gain access to long-term profits
(bank-owned model)