jacob flemming 17.09.2009 / vienna

21.04.23 - 1Eurapco - Creating value together

Eurapco – European Alliance Partners Company

Avoiding Conflicts and Dissatisfaction between Multichannel and Sales

Jacob Flemming

17.09.2009 / Vienna


Index

Eurapco

Multichannel concept & Business value proposition

In each Market / Partner

• Best Practice: How to avoid conflicts?

• Understanding management requirements in every channel

• Increasing productivity without spoiling remuneration systems


Partners


TOTAL Business 2008 (million Euros)

29291808 2355

854

12070

19306

4039

Covéa Eureko Gothaer LF Swiss Mobiliar Caser Tapiola

TOTAL 43’361


Non life Business 2008Premium income (million Euros)

23971764

1341 1263649

15075

8923

Covéa Eureko Gothaer LF Swiss Mobiliar Caser Tapiola

TOTAL 31’412


3147

4231

1165

1642

467

1092

205

Covéa Eureko LF Gothaer SwissMobiliar

Caser Tapiola

Life Business 2008Premium income (million Euros) and market positioning

Note that the figures mentioned are not directly comparable between Partners as their accounting rules and requirements differ.

n.a. 4 12 9 513 4

TOTAL 11’949


Multichannel concept

Clients

Individual

Groups

Corporations

Channel

Agents

Direct

Banks

Corporate agreements

Brokers

Factory

UW Policy adm.Post salesAccountingInvestments

IT


Business Value proposition and model

Traditional Ag & Bks Bancassurance Direct

Marketing Case oriented Segment oriented Cherry pickers

Product Wide product range

Permanent adaptation to individual consumers needs

Few – simple and wide products linked or not to financial products

Easy to modify

Few, simple & wide

Easiest modifiable product

IT Very complex processes Processes must be adapted to the Bank

Fixed – streamlined

Claims Involvement desire No involvement No involvement

Training In depth - wide Basic In depth - standar

Controls & Mgm. Info.

High & costly controls

- UW, Claims & Financial

Mgm. Info. Vital & volatile seldom shared

Easy, transparent & shared control -UW, Claims & Financial

Mgm. Info. Vital, shared and more meaningful

Easy, permanent control


Mgm. Info to aloud permanent fine tuning


Business Value proposition and model

Traditional Ag & Bks Bancassurance Direct

Service levels

Segmented Agents – intranets

Brokers – Access to UW / Claims

Segment oriented Cherry pickers

Product Wide product range

Permanent adaptation to individual consumers needs

Few – simple and wide products linked or not to financial products

Easy to modify

Few, simple & wide

Easiest modifiable product

IT Very complex processes Processes must be adapted to the Bank

Fixed – streamlined

Claims Involvement desire No involvement No involvement

Training In depth - wide Basic In depth - standard

Controls & Mgm. Info.

High & costly controls


Mgm. Info. Vital & volatile seldom shared

Easy, transparent & shared control -UW, Claims & Financial

Mgm. Info. Vital, shared and more meaningful

Easy, permanent control


Mgm. Info to aloud permanent fine tuning


Preliminary considerations

Channels in different Markets can have different weight and development

Multichannel to diversify from main channel

• Protect main channel or not ?

Use the strength of the brand or create a new brand ?

Price and Service Levels by channels ( personal lines )

• Not subsidize

• Different loss ratios by channels

Certain channels are still marginal but we think have high growth potential


Multichannel = Channels conflicts ?

ALLIANZ TO CLOSE ALLIANZ 24

Allianz is to close its direct internet operation Allianz 24, moving the system to the Allianz web site, reports Insurance Day.

Allianz was said to be planning a new presence in the discount insurance market via another yet-to-be-launched online platform that will not use the Allianz brand name. The new platform will be pan-European. BRAND ISSUE

Allianz launched Allianz 24 in 2005, attempting to sell traditional policies via agents MAIN CHANNEL and cut-price policies via the internet. Allianz conceded this week that it was a “classic case of the collision between two different sales channels”.

Allianz 24 caused resentment amongst the insurer’s 10,000 agents because customers could buy the same policies for up to 30% less but then, having bought the policies online, demanded the same after-sales service from agents. PRICE AND SERVICE

Allianz 24 insured only about 300,000 vehicles online last year, out of nearly 9m vehicles in total. MARGINAL IMPACT


France – Covéa (2008)

MARKET

French Market shrinks by 6% in 2008

( Life -10.3%, Non life +4% )

Life: 62% Bancassurance - Non life: 38%

Direct, 35% Tied Agents

COVÉA

Stable GWP in 2008

6% Market Share. Rank #8 overall, #1 in

Motor, #1 in Property & Liability

Channel distribution

Total Business

Brokers8%

Agents43%

Direct49%

Covéa


Distribution Strategies

Covéa : Group Partnership structure. Composed of 3 independent Insurance Companies:

– MAAF: Direct insurer, 574 points of sales– MMA: Tied agents, 1971 points of sales + Broker Business (Covéa Risks)– GMF: Direct insurer, 400 points of sales

Besides:– Covéa Fleet: Fleet business through Maaf, MMA, GMF and brokers

Covéa


Multichannel strategy

Covéa as such does not really have a strategy on this topic: these strategies are up to each Company.

Therefore, the 3 brands are competing against each other at a sales level MAAF: business done by Maaf employees in Maaf shops; MMA: business is

done by tied agents in MMA Agencies; GMF: business is done by GMF employees in GMF shops

MAAF, MMA and GMF propose online insurance: brand, prices are the same as in the shops. No internal competition, unlike some other companies (Groupama and their low-cost amaguiz.com)

Nexx: a MAAF daughter company (Online / Phone). Used for White Labelling and to have a different pricing policy without competing against the main distribution channel.

MMA/Covéa Risks: identical U/W guidelines and Terms & Conditions to avoid internal competition

Covéa


Life & Non-Life 2006

Direct64%

Brokers12%

Bancassurance

24%

Source: Company Data

2007/2008 figures not available

Description Sales Channel

EUREKO


• Leading multi-channel insurer in The Netherlands• Innovative service propositions• Strong portfolio of brands

• Leading insurance company in Greece• Superior agent management; best recognized brand

• Leading broker channel co-operation in Ireland• Highly successful and well respected multi-specialist

financial services company.

• Leading insurance company in Poland • Strong and loyal distribution network• Very strong brand (99% brand awareness)

Distribution channel

Direct Agents Brokers Bank

CharacteristicsBrand

•Developing operations in Romania, Bulgaria and Cyprus

• Medium sized Life and Non-Life insurer

•Niche market player,single distribution•Strong bancassurance as result of BCP relation

Distribution Strengths

EUREKO


• When there is a channel conflict product and price are the same, but the marketing strategy will be different.

• We strive for market leadership in all segment and for a leading position in all distribution channels, direct, broker, bank distribution (currently #1 in direct and bank distribution and # 5 in broker distribution)

• Key to our Dutch strategy are operational excellence and cost leadership

Occupational Health

Direct Banking

Product channels Distribution channels

PensionsHealth

The Netherlands - ACHMEA

BrokerProperty &

Casualty

EUREKO


GERMANY – GOTHAER / DescriptionMARKET 1,5% German market growth in 2.008

( Life 1,8% - Non life 1% ) Life 75% Agents and Brokers Non life 89% ( Agents 45% Brokers

44% )

GOTHAER 2,3% Growth ( Life 3% - Non life 1,7% ) Market quota 2,2% number 12 in the

ranking GWP

Non Life

Agents50%

Brokers48%

Affinities2%

GOTHAER

HealthBancassur

ance0.3%

Agents38.2%

Brokers61.5%

Life

Brokers58% Agents

32%

Bancassurance10%




Main channel: traditional ones (Agents and Brokers) Complementary channels: companies Juanitos (white label) and Asstel (direct

business) Different branding by channels besides traditional which are under the original

Company/Brand. Price differs from one channel to the others, according to different cost

structures Service levels the same in all channels Economic impact:

Volume very small, just start up companies

GOTHAER


31,4

50,2

40,031,3

41,6

16,7

43,0

Market shares non-life per regional insurance company

27,7

45,9

36,8 38,9

57,9

52,2

50,9

41,5

55,638,5

35,844,5

41,536,7

43,730,1

49,1

75% of the Swedish population

lives outside Stockholm

Länsförsäkringar


Distribution of Life, Non-Life and Bank productsCommercial Lines Private Lines

Salaried staff 35%

Captive agents 10%

Brokers 65%

Increased sales through brokers and captive agents

Telephone 60%

Agents (captive and car dealers)

20%

Internet 15%

Direct mail / Affinity Groups

5%

Increased sales through the Internet channel

Länsförsäkringar


Channel Strategy

No channel conflicts on the personal lines

Brand Name endorsing each region, e.g. Länsförsäkringar Göteborg

Same price for all channels, services depends on channel

Länsförsäkringar


Potential for increased customer commitment in LF Large customer base – few full-service customers

Total: Approx. 3.3 million customers

487,000Life & Non-life

LIFE418,000

BANK161,000

167,000Life, Non-life

& Bank

170,000Non-life& Bank

48,000Life & Bank

NON-LIFE1,824,000

Länsförsäkringar in the market

Länsförsäkringar


SPAIN – CASER

MARKET 7,6% Spanish market growth in 2.008

( Life 15,2% - Non life 2% ) Life 72% Bancassurance - Non life

66,9% ( Agents 38,6 Brokers 28,3 )

CASER 11,6% Growth ( Life 30,4% - Non life -

0,8% ) Market quota 4% number 5 in the

ranking GWPNon Life

Banks60%

Agents & Brokers

20%

Affinities20%


Total Business

Affinities11% Agents &

Brokers 11%

Banks78%

Life

Banks98%

Agents & Brokers

2%

Affinities0%

CASER



Main channel Bancassurance / Shareholders No different branding by channels

Coming from “White brand” in Bancassurance and Affinities Price restriction diversification channels higher than highest in Bancassurance Service levels the same in all channels Economic impact:

Volume smaller than 22% but 40% in Non life Results below average No cross subsidising

CASER


Total Market (CHF Mrd.): 15.9

Channel-Split 2007 in Non-Life (Portfolio)

Mobiliar

87 %

12 %

1 %0 %

Swiss Market

70 %

25 %

3 %2 %

Agents

Call-Centre

Internet

Brokers

Swiss Mobiliar


Business Model

Some local Brokers

Local Referal Partners

Call Center(Mobi24)

(Assistance only)

Internet

(Information only)

Agencies

Call Center(Mobi24)

Internet

Some local Brokers

Local Referal

Partners

Agencies

Using more channels, but all business canalised through local general agencies.

Commercial business possible also through brokers

Today Tomorrow

Swiss Mobiliar


5 Main Drivers for Successful Implementation of integrated Multi Channel Business Model

high availability and

consistency of customer data

„protection" of portfolios and customers in multi-

channel environment

consumer-friendly internet-products with optimized „bridges“ to

agent channel

identical price for identical coverage in all

sales channels

harmonized commissions for

transactions over agents and internet

Swiss Mobiliar


Finland / TapiolaMarket Description

MARKET Market value 2008:15bn Finland is predominately a direct market

Exception; car dealers and tied agents / franchise office

Tapiola Tapiola Group is at present a financial

conglomerate consisting of seven companies

13.97% of the market = 3rd largest Group

164 Sales point of which 61 are own offices and rest is exclusive service offices

3000 employees

Non Life 2007

Brokers7%

Direct93%

Market Channel distribution

Life 2007

Brokers4%

Direct96%

Tapiola



Agents = ; Car dealers and Agents = Franchise sales offices

which are exclusive to Tapiola No price or service differentiation

between channels Brokers mainly in industrial business

Increased importance of call-centres and internet as sales channels

Bancassurance related concepts increasing in importance

Increased importance of white-label products

Non Life 2007

Brokers1.2 %

Agents46.2 %Direct

52.6 %

Life 2007

Direct97.4 %

Brokers0.3 %

Agents2.4 %

Tapiola


Thanks for your attentionMuchas GRACIAS

They asked rabbi Ben Zoma:

Who is a wise man?

He said

The man that always finds something to

learn from the others

jacob flemming 17.09.2009 / vienna

Documents

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vital volatile