Rise of Bancassurance An Asia experience

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17 Φεβ 2014 (πριν από 3 χρόνια και 3 μήνες)

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1

Rise of Bancassurance

An Asia experience

David Fried

Group General Manager

Regional Head of Insurance

Hongkong and Shanghai Banking Corporation

International Insurance Society

Taiwan, 13
-
16 July 2008

2

Contents




Global Drivers




Aging population brings in opportunities




Bancassurance



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 (%)


Thailand

China
(
1982
)


India

Vietnam
(
1996
)


Philippines

Indonesia


Real per capita
GDP, US$ ‘000

Current penetration
of emerging markets

Potential

Why now?

5

0
10
20
30
40
50
60
70
South
Korea
China
Taiwan
South
Africa
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
0.22
Life

GI

US$
0.33
tn

0
10
20
30
South
Korea
China
Taiwan
South
Africa
India
HK
Brazil
Singa-
pore
Russia
Mexico
US$bn
0%
5%
10%
15%
6

Evolving customer needs:

a Golden Opportunity for Banks

Older 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 map

Client time

Wealth



Youth

Mature

High



Low



Insurance investment
needs

Bank (Credit) Products

7

Source: UN Population Ageing 2006


… but will have increased significantly in many countries by
2050

Why now?

People are aging

Percentage of total population aged 60 years or over in 2050


8

Bancassurance
-

catching on globally..

France:

the largest bancassurance market,
62
% of new premiums in
2005
earned through bank


networks
(favourable legislation, taxation
)*

USA
:


1999
legislation allowed insurance sales through banks but the expected revolution


hasn’t materialised
(low awareness, low growth)
*

UK
:


with 20% total premiums collected, bancassurance lags in market penetration


(dominance of IFA sales force)*

China:

>30% of new business from bancassurance
(heavily biased by SP products)*

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
)*

HK
:

38% bancassurance weighted penetration in 2007


(legislation, low interest rates, bank expertise)**

Others
:

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)


Nil

S. Korea

26%

26
%

Singapore

37.5
%

1%

Taiwan


48
%

6%

Malaysia

4.61
% (
15.4
% in private sector)


Negligible

India

33.1%

15.1
%

Hong Kong

33.9%

Less than 10%

China

New Life Insurance Premium

2005/06

New Life Insurance Premium

1998

New Premium from bancassurance as a percentage of total New Premium:

Source
:

various

sources,

Watson

Wyatt

and

Swiss

Re

reports

10

Meeting Stakeholders Needs

Customers

Bank

Insurer

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 Banking

Global

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

TRANSACTIONAL

NEEDS BASED

ADVISORY

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

7

Channel

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







䥮瑥I湥n

呥汥灨潮o

F
2
F (FPM’s)














































Good







偯潲

A

bancassurance

model

leverages

ALL

distribution

channels

for

different

stages

of

the

sales

cycle

15

Different Bancassurance Models

Integrated

Broker’s
model

Insurer

Bank

Insurer

Bank

Non
-
integrated


Agents to place
at bank branches


Mine on bank’s
client base
-

telemarketing


No agent at
branches


Bank’s RMs to sell

Bank

Insurer

Bank

Broker

Partnership
-

Leads
referral from bank on
commercial business;
brokers to recommend
business

Agents

16

Thank you

Q & A