BANCASSURANCE

Products, Training and Profit

Products

BANCASSURANCE

Why ?

Bancassurance : why? - Diversification of banking activities - Improvement of customer loyalty Why entering into ? - Convergences of bank and insurance activities - Complementarity in economical cycles - Complementarity of the risks - To put on end to the market share's decrease on the saving products - A new source of profit - One contact bringing financial and insurance solutions
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BANCASSURANCE

Why ?

Credit Life Insurance Buy a house

Property Insurance

Motor Insurance

Why entering into ?

Child Education

Client

Buy a car

Unit Linked Product

Save for retirement

Credit Life Insurance

Life Insurance

INSURANCE BANKS

CUSTOMERS

COMPANIES

Better utilization of manpower. Product diversification fee income

Convenience One stop shop

Expand customer base Increase in volume and profit Improved brand equity Marketing experience

Reduced price
Better service High quality.

In traditional roles neither insurers or banks can effectively do bancassurance.

BANK CAPABILITIES

INSURANCE CO.S CAPABILITIES

*own proprietary database * Strong name recognition & reputation (local & regional) * Managing multiple distribution channels * Cross selling banking products

* developing insurance products * face to face selling * underwriting experience * managing long tail products

Satisfied customer increased penetration of insurance products

Regulations under RBI and IRDA:The Reserve Bank of India and the insurance development and regulatory authority have a set of guidelines for companies that couple to form bancassurance. Based on the equity a bank should hold in joint venture, the highest allowable value of equity, the type of banks and insurance companies that can couple together and the operation of bancassurance are all the factors that are regulated by RBI and IRDA. The IRDA has very recently drafted guidelines to promote open architecture in bancassurance. Currently a bank has a tie-up with only one life insurer and one nonlife insurer. But in the new model the banks necessarily have to have multiple tieups. The country is divided into zones and every bank has to choose multiple insurers within the zones. With this the customer will have a wider range of insurance products offered by different insurers. It will also lead to a deeper penetration in the selling of insurance products.

Bancassurance companies:e JV between BNP Paribas Cardif and SBI

JV between ICICI and Fairfax Tie up between IDBI,Federal Bank,Aegis

Tie up with Old Mutual Life Insurance Corporate Agent for LIC

Different Bancassurance Models

Integrated

Bank
Agents

Insurer Agents to place at bank branches Mine on banks client base telemarketing

Non integrated

No agent at branches Banks RMs to sell

Bank

Insurer

Bank

Insurer

Brokers model

Bank
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Partnership - Leads referral from bank on commercial business; brokers to recommend business

Broker

Evolving customer needs: a Golden Opportunity for Banks

Older customers have different financial needs

Financial needs map

High

Bank (Credit) Products

Over 50s possess 70% of all financial assets These individuals and their assets need protection (insurance) and investing no longer borrowing Equally applicable in Developed and Emerging Markets This sea change too big an opportunity to miss and should build on HSBC credit credentials

Wealth

Low

Insurance investment needs

Youth

Mature

Client time

Meeting Stakeholders Needs

A three-way all-win solution Maximising business performance and potential

One-stop shop, holistic solutions

Customers
A new distribution channel in addition to the traditional Agency & Direct

A tool for deepening banking customer relationships & driving NFI

Bank
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Insurer

Products align with different market segments

The selling model(s) chosen impacts product, distribution channel, staff selection and training, marketing, sales processes and support etc

ADVISORY
5. Advisory

NEEDS BASED
3. Simple standalone / packaged

4. Advanced standalone

Sales complexity increases

As per Advanced Stand-alone but formal recommendation s made

TRANSACTIONAL
1. Targeted outbound for simple products

2. 2. Co-incidental Co-incidental

Whole life Endowments Personal Accident Mortgage Reducing Term (cross sales for Fire buildings and contents) Home Contents Travel Basic Term Complex riders

Critical Illness
Income Protection Unit Linked Life Annuities

Accidental Death Personal Accident Hospital Cash 11

Creditor on Credit Cards

Motor (with car loans)