bancassurance models around the world by tobias schneider

Prepared by Aon Inpoint

Bancassurance Models Around the World

Presentation at the 1st Annual Bancassurance Conference in KenyaNairobi - 24th March 2015

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Agenda

0. A few words about Aon Inpoint

1. Introduction

2. Key factors that shape bancassurance markets…

3. …and what their impacts on operating models are

4. Top 10 of the most successful bancassurance captives

5. Bancassurance in sub-Saharan Africa: Opportunity and challenges

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1. A few words about Aon Inpoint…

Aon Inpoint is part of the Aon family…

120+ offices around the globe

66,000+ colleagues worldwide

$12 billion in revenues in 2014

…with unique access to data

$150 billion in premium flow to date

1,350 Global Carriers

68,774 Global Clients in 180 territories

Aon Inpoint believes the key to driving successful industry innovation and

change is through taking advantage of data and analytics

Market leading

insurance data and

analytics

World class

insurance

consulting

Specialist Aon Risk

Solutions expertise

Integrated global

execution

Aon Inpoint’s three core value propositions

Business excellence: Optimising insurer’s value proposition, distribution, and connectivity

Portfolio opportunities: Identifying and executing growth opportunities around existing business

Strategic initiatives: Identifying, developing and executing game changing business opportunities

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1. Introduction

“It is important that every country, developing or otherwise, gives

careful consideration to the great value of Bancassurance as a means

to grow the presence and use of insurance within a community.

For all its youth, Bancassurance is emerging as a natural pathway for

the effective development of insurance.

There can be no doubt of the importance of the potential for

Bancassurance to open the path toward cost-efficient access to

insurance products, both Life and non-Life.”

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2. Key Factors that Shape Bancassurance Markets…

Meta level: Regulation Financial crisis

Country level: Regulation Market characteristics

C

o

n

s

u

m

e

r

Country-specific bancassurance

markets characteristics

New capital requirements Divestments

Mediation laws,

shareholding rules,

product regulations

Banking & insurance

sector, cultural factors

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3. Bancassurance Operating Models

0%

20%

40%

60%

80%

100%

Turkey Brazil Spain France S. Korea Russia Germany UK Chile Japan

% of life insurance premiums distributed via banks

Bancassurance as a market maker Strong competition from agents

Regulation

RegulationPPI

Similar operating models

Source: Finaccord Global Bancassurance Reports

Aon Inpoint


42%

58%

Yes No



38%

14%9%

39%

Captive JV Captive + JV None

Operating models of the 125 largest banking groups Strategic partnerships of the 125 largest banking groups

Recent trends Recent trends

Captive /

JV Crisis / regulationsJV / None

Capital / opportunitiesNone / JV

Captives /

JV

Europe Emer.Mar.

15 yrs. / 11 countries


10 yrs. / multiple countries


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0% 20% 40% 60% 80% 100%

Japan

S. Korea

India

Spain

Brazil

France

External underwriter Multiple external underwriters

Captive underwriter JV underwriter

Other

Captives / JVs dominate

Common vision

Tailor-made products

Multiple external partners

Strict regulations

Nevertheless successful

Referral model

Banks as multi-tied agents

JV model dominates

Strict rules regarding FDI

Operating models by country Comment


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4. Top 10 of the most successful bancassurance captives

Rank Group Premiums 2012

1 Crédit Agricole $29.0 bn

2 ING Group $26.1 bn

3 BNP Paribas $25.5 bn

4 Bradesco $21.1 bn

5 Crédit Mutuel $15.2 bn

6 Lloyds Banking Group $13.3 bn

7 Société Générale $13.1 bn

8 HSBC $13.0 bn

9 NongHyup Group $9.1 bn

10 Intesea Sanpaolo $7.3 bn

Origin Comment

Fully integrated model

Long tradition

Investment life policies

Divesting groups

Ca. 45m insurance clients

Ca. 30% of total profit

‘Role model of success’


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Challenges

Key success factors Status Comment

1. Beneficial regulatory

environment

2. Commitment of banks to

insurance

3. Large life insurance

market

4. Large consumer lending

markets

5. Tight bancassurance

partnerships

6. Staff training

7. Tailor-made insurance

products for the bank

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

Tanzania

Uganda

Zambia

0

20

40

60

9 largest sub-SahranAfrica countries (ex ZA)

Czech Republic

Total consumer lending ($bn)

0

1

2

3

4

5

9 largest sub-SahranAfrica countries (ex ZA)

Czech Republic

Life insurance GWP ($bn)

1. Does it feel like joint ‘ownership’?

2. Do you treat each other as equals?

3. Do you regularly evaluate performance?

4. Do you set future plans?

4. Bancassurance in Sub-Saharan Africa: Challenges

Emerging

Emerging

Under-

developed

Emerging

Under-

developed

Source: Finaccord: Bancassurance in Africa

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Opportunities

4. Bancassurance in Sub-Saharan Africa: Opportunities

-4%

-2%

0%

2%

4%

6%

8%

10%

2006 2008 2010 2012 2014 2016 2018 2020

European Union Sub-Saharan Africa

Robust GDP growth

Technological development

Fastest-growing middle class in the world

Fastest-growing working age population

Consumer spending of $1.4 tr. In 2020

Consumer spending

Pan-African / international groups

Source: IMF

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4. Bancassurance in Sub-Saharan Africa: Opportunities

Any questions?

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bancassurance models around the world by tobias schneider

Economy & Finance