Bancassurance Survey 2015BY

WATSON MACHARIA, PARTNER – LLOYDS AFRICA MARKETS

Respondents

1. Bancassurance Consumers

2. Banks

3. Insures

Consumers By Age

18 to 2417%

25 to 3454%

35 to 4421%

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 Ugandan middle class is growing fast and they are the major clients for the insurance products.

Insurance Companies (23) Resolution Insurance

AIG Uganda 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

Uganda 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 Uganda

CFC Stanbic Bank

Chase Bank

Commercial Bank of Africa

Co-operative Bank of Uganda

Diamond Trust

Ecobank Uganda

Equatorial Commercial Bank

Equity Bank

Family Bank

First Community Bank

GT Bank Uganda

Housing Finance

I&M Bank

National Bank of Uganda

NIC Bank

Prime Bank

FAULU Micro Finance Bank

KWFT Micro Finance Bank

RAFIKI Micro Finance Bank

CENTURY Micro Finance Bank

Gulf African Bank

Uganda Commercial Bank

FINDINGSBANKS AND INSURERS

Number of distribution agreements -Insurers

33%

11%33%

11%

11% 1-5

5-10

10-15

15-20

More than 20

Number of distribution agreements -Banks

31%

56%

12%

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

Commission

Profit Share

Dividends

Fees

Other (please specify)

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

100.0%

18.8%

0.0%

18.8%

6.3%

How do you compensate the bank for bancassurance sales?

Motivation -Banks

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

4.55 4.60 4.65 4.70 4.75 4.80 4.85 4.90 4.95

4.78

4.89

4.89

4.67

4.67

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

Challenges to Entry -Banks

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)

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

What were your greatest hindrances when venturing in bancassurance distribution?

Challenges to entry -Insurers

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)

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

What were your greatest hindrances when venturing in bancassurance distribution?

Preferred Partnership -Banks

Provide operational support, including technology support

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

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

0.00 1.00 2.00 3.00 4.00 5.00 6.00

How likely are you to provide each of the following services if an insurance Company viewed you as a "strategic partner"

Preferred Partnership -Insurers

Provide operational support, including technology support

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

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

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

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

Customer Surveys Mystery Shopping External Consultants advice

50.0%

37.5%

75.0%

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

Customer Surveys Mystery Shopping External Consultants advice

71.4%

42.9% 42.9%

When profiling a potential bank partner, which of the follow-ing professional advisory techniques did you use?

Effectiveness of Marketing MethodsBanks

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

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

How important to you are the following marketing methods in generating qual -ifi ed bancassurance sales leads?

Effectiveness of Marketing MethodsInsurers

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

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

How important to you are the following marketing methods in generating qual -ifi ed bancassurance sales leads?

Bancassurance on TechnologyBanks

Distribution channels

Customer Segmentation/Profiling

Marketing & Advertising

Product Development & Pricing

Customer Retention

Product Training

Market Research

Claims Assessment

Customer Service

Claims Payment

0.00 1.00 2.00 3.00 4.00 5.00 6.00

4.50

4.67

3.83

4.67

4.83

3.67

3.83

4.17

4.67

4.33

How important is technology integration in each of the following needs in increasing bancassurance sales?

Bancassurance on TechnologyInsurers

Distribution channels

Customer Segmentation/Profiling

Marketing & Advertising

Product Development & Pricing

Customer Retention

Product Training

Market Research

Claims Assessment

Customer Service

Claims Payment

3.80 3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 4.70

How important is technology integration in each of the follow-ing needs in increasing bancassurance sales?

Client Segmentation StrategyBanks

17%

33%

17%

33%

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 StrategyInsurers

How Complete is your Client Segmentation Strategy?

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

ABC BankBank of India

EcobankFirst Community Bank

GT Bank KenyaI&M Bank

Jamii Bora BankConsolidated Bank

Equatorial Commercial BankImperial Bank

K-Rep BankNational Bank of Kenya

FAULU Micro Finance BankPrime Bank

NIC BankRAFIKI Micro Finance Bank

CFC Stanbic BankChase BankFamily Bank

Standard Chartered BankBarclays Bank of Kenya

KCBCo-operative Bank of Kenya

Equity Bank

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

Which of the following institutions do you bank with?

Dominant Insurers in Bancassurance

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

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

Which of the following companies did you purchase an insurance product?

Product Awareness

3%

5%8%

13%

16%

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

Tele-sales through call centre

Sign boards Advertisements Friends or relatives Bank Brochures Branch Advisory agency

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

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

Perception; Banks vs Insurers on New Insurance

Yes77%

No23%

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

Perception; Banks vs Insurers on Renewing Insurance

Yes71%

No29%

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

Preferred Bancassurance Classes

Engineering Insurance

Aviation Insurance

Marine Insurance

Personal Accident Cover

Pension Plan

Life Insurance

Cover against Fire

Cover against Theft

Medical Cover

Motor Vehicle Insurance

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Insurance Products likely to buy if sold by the bank instead of insurance agent/broker?

Overall Perception on Banks Vs Insurers

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

7 5 3

127

8 108

13

29

33 3134

22

8

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.

Bancassurance Survey SeriesQ&A