bancassurance - history, evolution & distribution model

1

AGENDA

Bancassurance – History

Bancassurance – Evolution

Bancassurance – A Win Win Situation

Bancassurance – Distribution Models

Bancassurance – Distribution Channel

2

Bancassurance - History

Originated in France in 1980s

Spread rapidly across Europe

Introduced in India in 1999 Opening up of insurance industry 20 new companies

3

Bancassurance - Evolution Pressures on Banking Sector:

Customer retention in the face of competition

Staff retention and motivation

Universal Banking- approach to provide all financial product under one roof ; a broader relationship approach

Optimum utilisation of infrastructure and resources- maximise revenue

4

Bancassurance - Evolution

Pressures on Insurance Sector: Channel diversification from traditional direct

sale

Access to a high quality customer base

Achieve the geographical reach within minimum time and cost

Ensure higher probability of success in the sales process

5


Solution:

Insurance + Banking= Bancassurance

6


The provision of insurance and banking products and services through a common distribution channel or to a common client base.

7


Bank Insurance Company Customer retention Revenue and channel

diversification Satisfaction of more financial needs under the same roof

Quality customer access

Revenue diversification Quicker geographical reach

More profitable resource utilisation

Creation of brand equity

Enriched work environment Leverage service synergies with Bank

Establish sales orientated culture Establish a low cost acquisition channel

8

Bancassurance - Distribution Model

Integrative / Generalist Model

Specialist Model

Financial Planning Model

9


Integrative / Generalist Model Product distribution through existing bank channel

Bankers themselves sells the product to customer

Process managed by banks and insurer act as only product/service provider

e.g. Telemarketing, direct mail

10


Specialist Model Distributes insurance product through generally

employees or representatives of the insurance company

Bankers help to identify the prospects who further contacted by insurance professionals

Requires less training and higher compensation to support the referral process

It lengthens the process of sale

11


Financial Planning Model Insurer employs sales force and deploys them at

bank branches Quick to implement as compare to other models Bank as introducer, insurer sales force as

converters Offers each customer and prospect a full

financial planning package addressing all of the individual's financial concerns

12

Bancassurance - Distribution channels

Career Agents Special Advisers Salaried Agents Bank Employees / Platform Banking Corporate Agencies and Brokerage Firms Direct Response Internet e-Brokerage Outside Lead Generating Techniques

13

Private Banking Investment

advice Estate Planning Portfolio

management including insurance planning

Investment advice Needs based selling Ongoing relationship

management Customised

insurance plans

Income

protection Savings

Segment specific features




Product- Sales approachD

istribu

tion- V

alue A

dd

Hig

hL

ow

Product Complexity CommodityCustomised

Customer typeLow Value

High Volume

High value

Low volume

Full Service

Full advice

(Financial Advisor)

Limited advice

(Life agent)

No advice

(direct)

14

SWOT Analysis

Strengths

Vast untapped market

Huge pool of skilled professionals

15

Contd….

Weakness

Lack of networking among bank branches

Saving Ability of Middle Class

16

Contd….

Opportunities Data mining

Banks have a huge customer database which has to be properly leveraged. Target segments should be identified and tapped.

Wide distribution networks of banks

Exploit the corporate customers and tie - up for insurance of the employees of corporate clients.

17

Contd….

Threats Human Resource Challenges

Non-response from the target groups

can also pose a challenge.

18

THANK YOU

bancassurance - history, evolution & distribution model

Documents