Return to Retail Relationship Banking Bancassurance Opportunity

Microsoft PowerPoint - Oscar Zimmerman - December 01, 2005.pptOscar Zimmerman Scotia Insurance
December 01, 2005
Bancassurance Challenges
Caribbean Observations
Choice
Real value proposition when life changes
Customer Needs
Retail Bank Retail Bank Retail Bank OpportunityOpportunityOpportunity
Key Success Key Success Key Success FactorsFactorsFactors
Actuarial Role Actuarial Role Actuarial Role in Risk in Risk in Risk
ManagementManagementManagement
Couple
New Family
Established Family
Pre- Retirement
Disburse savings Plan estate
Address Specific Needs Created by Change In Life Stage
Address Specific Needs Created by Change In Life Stage
Customer Needs
ClosingClosingClosing
BANK/INSURERS WORKING AS A TEAM ARE WELL POSITIONED TO MEET CUSTOMER NEEDS
5 SCOTIABANK
48,000 employees
Long-term relationship with customers
Branch and Systems infrastructure
22 Countries
Branch and system Infrastructure
“Best Rated Bank in Costa Rica” – CID Gallup
“1st Place in Customer Service” – Reforma
“Best Bank in Mexico (2003)” – Latin Finance
“1st in Customer Service” – MERC
“1st in Branch Satisfaction” – Grupo IDM
“Best Bank in the Caribbean” – Latin Finance
“Best Customer Service” – El Economista
Mexico
8 MEETING OUR CUSTOMER NEEDS
Four Cornerstone Strategy
To be the best at helping customers become financially better off by finding relevant solutions
to meet their unique needs
Customer Customer Customer NeedsNeedsNeeds
Develop ‘bancassurance/ financial’ solutions
Leverage Bank strengths
Scotia Life Insurance Company, Canada
Mortgage Insurance Company, Canada (P &C)
ScotiaMcLeod Financial Services Inc., Canada (Life Brokerage)
ScotiaLife Trinidad & Tobago Limited
Scotia Insurance Brokerage- (multi-line) Chile, Dominican Republic, Puerto Rico
Scotia Insurance (Barbados) – Multi-line Reinsurance
11 HOW DOES BANCASSURANCE HELP RETAIL BANKS?
Credit insurance protects loan security
Multi product improves
Fee income to boost shareholder ROE
Customer Customer Customer eedseedseeds
Scotia Scotia Scotia InsuranceInsuranceInsurance
Key Success Factors
3.3. Co-ordinated conglomerate risk management
4.4. Effective conglomerate sales and service
implementation
13
Core Consumers Protection Needs
Key Success Factors
FILTER TO LOOK FOR REAL VALUE IN THE VALUE CHAIN FOR EACH SEGMENT
14
management
Line
Line
Compliance
Compliance
3
KEY BANCASSURANCE SUCCESS FACTORS THREE LEVERS IDENTIFIED BY LEADING PLAYERS
Key Success Factors
15 AN EFFECTIVE BANCASSURANCE STRATEGY HOW TO CAPTURE THE VALUE?
What segments/ products?
• Mass • Affluent • Wealthy • Business
• Individual v. group • Traditional models v.
customized
• Life stronger fit than P&C due to savings component
At least four potential market to serve
• Mass • Affluent • Wealthy • Business
• Individual v. group • Traditional models v.
customized
• Life stronger fit than P&C due to savings component
How will banks deliver products to customers?
Delivery model dependent on segment economics
Technology is important delivery regardless of channel chosen
• Branch • Agent • Call Center • Internet
Able to leverage brand/presence while working within regulations
Delivery model dependent on segment economics
Technology is important delivery regardless of channel chosen
• Branch • Agent • Call Center • Internet
Able to leverage brand/presence while working within regulations
What business model will be most
effective?
Distribution v. risk taking v. both
Four types of models to choose from, potential to JV across all
• Start-up • Acquisition • White Label • Broker/Private label
Optimize value chain approach
“interest spread” • Fee for services – ASP
Group, Segregated Funds • Distribution
Distribution v. risk taking v. both
Four types of models to choose from, potential to JV across all
• Start-up • Acquisition • White Label • Broker/Private label
Optimize value chain approach
“interest spread” • Fee for services – ASP
Group, Segregated Funds • Distribution
Key Success Factors
Loss ratio volatility
Amortization acquisition costs/lapses
Legislative / Regulatory environment effect on: Sales Service integration
Actuarial Role in Risk
International Association of Insurance Supervisors (IAIS) Core Principles (2003)
BASLE 2 Transparent Verifiable
Related party roles/self dealing
19 IAIS – CARIBBEAN MEMBERS
20 EXPANDING ACTUARIAL ROLES IN RISK MANAGEMENT S & P RISK CONTROL INDICATORS
Identify significant risk exposures
Exceeding limits has clear consequences
Loss post mortem to identify process improvements
Identification
Monitoring
Regulate separate Bank/Insurance sectors
multi-license restrictions
Outdated insurance solvency & corporate
product guarantees
NeedsNeedsNeeds
includes 180 jurisdictions, 98% of world insurance premiums.
28 Core Principles for Supervision, adopted Oct 2003,
correspond to Basel I and Basel II in banking.
Proposed Global Solvency Standard – total balance sheet
approach
The World Bank and IMF are overseeing and inspecting by
means of the Financial Sector Assessment Program to make
sure governments comply.
Bank integration in TT) but much remains to be done.
23BANCASSURANCE CHALLENGES ACTIVELY MANAGE CULTURAL DIFFERENCES
BANKING INSURANCE
Short Term
Estimate, trend, forecast
Expand Rapidly
Reward performance
Communications critical
of corporate governance and risk base supervision
are starting to be applied in some countries
Differences in regional country economic strength
and financial regulatory structure
certainty that insurers will deliver on “promise to
pay”
retailing insurance solutions.
Related party commercial links
Single window for product approval
Single regulator Financial solvency Market conduct
Windup act preference to policyholders
Encourages debt markets to support good management to protect their security
Local system for complaint handlings
By company
27 CLOSING DEMOGRAPHICS
Every year we get a year older, unfortunately, but living longer
Long term saving need
No silver bullet solution
Questions?Questions?

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Return to Retail Relationship Banking Bancassurance Opportunity