Bancassurance

Survey 2015BY

WATSON MACHARIA, PARTNER – LLOYDS AFRICA MARKETS

Respondents

1. Bancassurance Consumers

2. Banks

3. Insures

Consumers By Age

18 to 24

17%

25 to 34

54%

35 to 44

21%

Respondents Age Profiles

18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 or older

Consumers Social Economic Class

The participants were drawn from the upper to lower middle socio-

economic categories representing the largest percentage. The average income was the main indicator of the social economical

classes. The middle to upper class had an average net monthly

income of between Ksh 50, 000 and Ksh 150,000. This is mainly

because the Kenyan middle class is growing fast and they are the

major clients for the insurance products.

Insurance Companies (23) Resolution Insurance

AIG Kenya Insurance

APA Insurance

APA Life Assurance

British American Insurance (BRITAM)

Cannon Assurance Limited

Cfc Life Assurance

CIC General Insurance

CIC Life

First Assurance

GA Insurance

ICEA Lion General Insurance

ICEA Lion Life Assurance

Jubilee Insurance

Kenya Orient Insurance

Madison Insurance

Occidental Insurance

Pan Africa Life Assurance

Takaful Insurance Of Africa

UAP Insurance

Fidelity Shield Insurance

UAP Life Assurance

Banks (25)

ABC Bank

Barclays Bank of Kenya

CFC Stanbic Bank

Chase Bank

Commercial Bank of Africa

Co-operative Bank of Kenya

Diamond Trust

Ecobank Kenya

Equatorial Commercial Bank

Equity Bank

Family Bank

First Community Bank

GT Bank Kenya

Housing Finance

I&M Bank

National Bank of Kenya

NIC Bank

Prime Bank

FAULU Micro Finance Bank

KWFT Micro Finance Bank

RAFIKI Micro Finance Bank

CENTURY Micro Finance Bank

Gulf African Bank

Kenya Commercial Bank

FINDINGSBANKS AND INSURERS

Number of distribution

agreements -Insurers

34%

11%33%

11%

11%1-5

5-10

10-15

15-20

More than 20

Number of distribution

agreements -Banks

31%

56%

13%

How many bancassurance distribution agreements do you have with

banks?

1-5

5-10

10-15

15-20

More than 20

Mode of Compensation to Banks

100.0%

18.8%

0.0%

18.8%

6.3%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Commission

Profit Share

Dividends

Fees

Other (please specify)

How do you compensate the bank for bancassurance sales?

Motivation -Banks

4.78

4.89

4.89

4.67

4.67

4.55 4.60 4.65 4.70 4.75 4.80 4.85 4.90 4.95

Strengthen and retain existing customer relations

Boost Fee income

One-stop shopping for financial services

Building or extending the Institution's Brand (Widening consumer

awareness etc)

Attract new customers

How important to you are the following reasons why banks venture into

bancassurance?

Challenges to Entry -Banks

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Legislative issues

Inadequate skills at the bank

Integration and operational challenges

Conflict from the agents and brokers

Exclusivity requirements from other partnerships

Lack of public awareness on available bancassurance

products

Other (please specify)

What were your greatest hindrances when venturing in bancassurance

distribution?

Challenges to entry -Insurers

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Legislative issues

Inadequate skills at the bank

Integration and operational challenges

Conflict from the agents and brokers

Exclusivity requirements from other partnerships

Lack of public awareness on available bancassurance products

Other (please specify)

What were your greatest hindrances when venturing in

bancassurance distribution?

Preferred Partnership -Banks

0.00 1.00 2.00 3.00 4.00 5.00 6.00

Provide operational support, including technology support

Provide in-branch, point of sale support, e.g. insurance specialists, training,…

Dedicated customer service for clients from this relationship

Direct contact available with Underwriting Division

Setting aside an annual marketing budget to support the financial institution

Production goals and commitment

Quarterly strategy and business plan meetings

Sales bonuses based on reaching targets

Create or support profiling of the financial institution's customer base

Underwriting concessions for life insurance sales

Up front cash payment for marketing

Placement of your in-branch insurance agents

How likely are you to provide each of the following services if an insurance Company viewed

you as a "strategic partner"

Preferred Partnership -Insurers

0.00 1.00 2.00 3.00 4.00 5.00

Provide operational support, including technology support

Provide in-branch, point of sale support, e.g. insurance specialists, training,…

Dedicated customer service for clients from this relationship

Direct contact available with Underwriting Division

Setting aside an annual marketing budget to support the financial institution

Production goals and commitment

Quarterly strategy and business plan meetings

Sales bonuses based on reaching targets

Create or support profiling of the financial institution's customer base

Underwriting concessions for life insurance sales

Up front cash payment for marketing

Placement of your in-branch insurance agents

How likely are you to provide each of the following services if a bank viewed you

as a "strategic partner"

Advisory Techniques For

Bancassurance Partnership- Banks

50.0%

37.5%

75.0%

Customer Surveys Mystery Shopping External Consultants advice

When profiling a potential insurance company for a partner, which of

the following professional advisory techniques did you use?

Advisory Techniques For

Bancassurance Partnership- Insurers

71.4%

42.9% 42.9%

Customer Surveys Mystery Shopping External Consultants advice

When profiling a potential bank partner, which of the following

professional advisory techniques did you use?

Effectiveness of Marketing Methods

Banks

0.00 1.00 2.00 3.00 4.00 5.00

Brochures in Branches

Mobile phone SMS

Telemarketing e.g., outbound call centers

Bank Statements Inserts

Media Advertising using TV, Print and radio

ATM Advertising/Solicitations

Independent brokers working with financial institutions

Dedicated insurance website

Branch signage

Referrals from clients, staff, professionals etc

Seminars

How important to you are the fol lowing marketing methods in generating

qual ified bancassurance sales leads?

Effectiveness of Marketing Methods

Insurers

0.00 1.00 2.00 3.00 4.00 5.00

Brochures in Branches

Mobile phone SMS

Telemarketing e.g., outbound call centers

Bank Statements Inserts

Media Advertising using TV, Print and radio

ATM Advertising/Solicitations

Independent brokers working with financial institutions

Dedicated insurance website

Branch signage

Referrals from clients, staff, professionals etc

Seminars

How important to you are the fol lowing marketing methods in generating

qual ified bancassurance sales leads?

Bancassurance on Technology

Banks

4.50

4.67

3.83

4.67

4.83

3.67

3.83

4.17

4.67

4.33

0.00 1.00 2.00 3.00 4.00 5.00 6.00

DISTRIBUTION CHANNELS

CUSTOMER SEGMENTATION/PROFILING

MARKETING & ADVERTISING

PRODUCT DEVELOPMENT & PRICING

CUSTOMER RETENTION

PRODUCT TRAINING

MARKET RESEARCH

CLAIMS ASSESSMENT

CUSTOMER SERVICE

CLAIMS PAYMENT

How important is technology integration in each of the following needs in

increasing bancassurance sales?

Bancassurance on Technology

Insurers

3.80 3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 4.70

Distribution channels

Customer Segmentation/Profiling

Marketing & Advertising

Product Development & Pricing

Customer Retention

Product Training

Market Research

Claims Assessment

Customer Service

Claims Payment

How important is technology integration in each of the following needs

in increasing bancassurance sales?

Client Segmentation

Banks

83.3%

16.7% 16.7%

66.7%

50.0%

16.7%

TYPE OF BANK

PRODUCTS HELD

CREDIT RATING LIVING STANDARDS

MEASURES

AGE GROUP HOUSE-HOLD INCOME WE DO NOT DO

CUSTOMER

SEGMENTATION

What type of bancassurance Customer segmentation criteria

do you use?

Client Segmentation

Insurers

57.1%

14.3%

21.4%

14.3%

28.6%

42.9%

TYPE OF BANK PRODUCTS HELD

CREDIT RATING LIVING STANDARDS MEASURES

AGE GROUP HOUSE-HOLD INCOME WE DO NOT DO CUSTOMER SEGMENTATION

What type of bancassurance Customer segmentation criteria do you use?

Client Segmentation Strategy

Banks

17%

33%

17%

33%

0%

HOW COMPLETE IS YOUR CLIENT SEGMENTATION STRATEGY?

Have not yet implemented true client segmentation

Just started, have a lot to do

About half way to where we need to be

Almost there - needs a bit more tweaking

Well established and functioning very effectively

Client Segmentation Strategy

Insurers

43%

29%

7%

7%

14%

HOW COMPLETE IS YOUR CLIENT SEGMENTATION STRATEGY?

Have not yet implemented true client segmentation

Just started, have a lot to do

About half way to where we need to be

Almost there - needs a bit more tweaking

Well established and functioning very effectively

CONSUMERS

Dominant Banking Institutions

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

ABC Bank

Bank of India

Ecobank

First Community Bank

GT Bank Kenya

I&M Bank

Jamii Bora Bank

Consolidated Bank

Equatorial Commercial Bank

Imperial Bank

K-Rep Bank

National Bank of Kenya

FAULU Micro Finance Bank

Prime Bank

NIC Bank

RAFIKI Micro Finance Bank

CFC Stanbic Bank

Chase Bank

Family Bank

Standard Chartered Bank

Barclays Bank of Kenya

KCB

Co-operative Bank of Kenya

Equity Bank

Which of the following institutions do you bank with?

Dominant Insurers in

Bancassurance

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

AMACO

CANNON ASSURANCE LIMITED

GATEWAY INSURANCE

INVESCO ASSURANCE

PIONEER LIFE ASSURANCE

XPLICO INSURANCE

APOLLO LIFE ASSSURANCE

GA INSURANCE

TRIDENT INSURANCE

CIC LIFE

RESOLUTION INSURANCE

PAN AFRICA LIFE ASSURANCE

AAR INSURANCE

BRITAM

Which of the following companies did you purchase an

insurance product?

Product Awareness

3%

5% 8%

13%

17%

21%

33%

Class of Insurance Purchased

Cover against Theft

Cover against Fire

Personal Accident Cover

Pension Plan

Medical Cover

Motor Vehicle Insurance

Life Insurance

Effectiveness of Marketing Methods

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Tele-sales through call

centre

Sign boards Advertisements Friends or relatives Bank Brochures Branch Advisory

agency

How did you know that you could buy your insurance from the

bank?

Perception; Banks vs Insurers on

New Insurance

Yes

77%

No

23%

Would You Consider to Purchase Insurance if Sold To You By Your Bank?

Perception; Banks vs Insurers on

Renewing Insurance

Yes

71%

No

29%

Would You Prefer To Renew Your Insurance Product Via Your Bank?

Preferred Bancassurance Classes

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Engineering Insurance

Aviation Insurance

Marine Insurance

Personal Accident Cover

Pension Plan

Life Insurance

Cover against Fire

Cover against Theft

Medical Cover

Motor Vehicle Insurance

Insurance Products likely to buy if sold by the bank instead of insurance

agent/broker?

Overall Perception on Banks Vs

Insurers

7 5 3

127

8 108

13

29

33 3134

22

8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Perception towards Insurers vs Banks

None Insurance Companies Banks

Conclusions & Recommendations

I. Make insurance a commitment for both banks and insurers senior management by focusing on its profitability

II. Use the insurer’s sales staff and expertise to drive the banks sales culture and, where possible and profitable, employ dedicated insurance sales wholesalers within the financial institution.

III. Build insurance as part of and not separate from the banks sales structure to enable better, more targeted, and more successful sales activities.

IV. Review customer loyalty after the insurance buying experience in the bank and use this as a bank product cross selling opportunity.

V. Utilize the banks customer information database more effectively to generate leads, uncover opportunities, and open up innovation in products

Conclusions & Recommendations

I. Integrate insurance sales into banks sales goals through incentives, referral fees, productivity credits, and/or other measures to help track and encourage productivity.

II. Connect bank sales staff via technology with insurance providers to enable answering of questions in real time and to overcome lack of knowledge at the point of sale.

III. Allow more training time for insurance products, either on the bank premises or via electronic methods delivered directly by insurers or third parties, to increase the bank-based insurance salesperson’s knowledge and comfort.

IV. Develop marketing outreach and educational programs targeted to both financial institution clients and the general populace to increase financial institution customer and general consumer awareness of bank and credit union insurance.

V. Use a profiling process on the front end to recognize opportunities, suggest solutions, and complete sales at the point-of-sale and/or refer appropriately.

Ahead this year @Lloyds_Research

Bancassurance Survey & Conference Uganda 2015

Bancassurance Survey & Conference Tanzania 2015

Africa Micro Forum:

Micro Finance & Micro Insurance

Private Banking & Wealth Management Survey: Kenya

Banking Performance Index: SSA Series

Insurance Performance Index :EA Series

Customer Satisfaction Index :EA Series

Bancassurance Survey Series

Q&A