Bancassurance: A Global perspective on customer, products and distribution methods

Dynamics in Bancassurance: Perspectives Worldwide and for sub-Saharan Africa

© Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: [email protected] 1

Bancassurance Models Around the World


Presentation at the Trueventus Bancassurance Conference

Dar es Salaam, August 27th – 28th 2014

http://www.finaccord.com/

mailto:[email protected]



Agenda

Factors that shape bancassurance markets

Global developments: bancassurance strategies used by the world's 125 largest retail banking groups

Macro-economic development in sub-Saharan Africa

Development of the banking and insurance sector in sub-Saharan Africa

Bancassurance in sub-Saharan Africa: regulatory environment, product range, and operating models

Future outlook





Key Factors that Shape Bancassurance Markets

Bancassurance

1. Meta level: Regulation Forced divestment

Consumer expectations

2. Country level: Regulation Market characteristics





Key Factors that Shape Bancassurance Strategies

1. Meta level

New regulation: New capital requirements under the Basel III Accords

Forced divestment: Several banking groups have beenforced to divest assets

2. Country level

Regulation: Mediation laws, insurance shareholding of banks, product regulation

Market characteristics: Banking and insurance sector, cultural factors





Bancassurance Strategies on a Meta LevelSegmentation of 125 retail banking groups between those with captive underwriters, those with

joint venture underwriters and those with both captive and joint venture underwriters, 2013

Source: Finaccord Global Bancassurance reports

Captive, 41.6%

Captive and joint venture,

13.6%

Joint venture,

10.4%

None, 34.4%





Bancassurance Strategies on a Meta Level: Captives and JVsRanking of banking groups by value of premiums of captive and joint venture underwriters, 2012


Rank Group Premiums (USD billion)

1 Crédit Agricole 29.002 ING Group 26.073 BNP Paribas 25.474 Bradesco 21.135 Crédit Mutuel 15.176 Lloyds Banking Group 13.137 Société Générale 13.098 HSBC 13.049 NongHyup Bank 9.1110 Intesa Sanpaolo 7.28

Total of above 172.49

Other retail banking groups in world's top 125

164.52

Grand total 337.01

French

French

French

Divesting

Divesting

"Role model of success"French





0%

20%

40%

60%

80%

100%

Turkey Brazil Spain France S. Korea Russia Poland Germany UK Chile Japan

The importance of the bancassurance channelEstimated distribution share of bancassurance in total life insurance, 2013


Regulation

New concept / strong agent

tradition

"Southern Europe model"

PPI scandal





Bancassurance in sub-Saharan Africa





Macro-economic developmentGDP in current prices in sub-Saharan Africa, segmented by country, 2008, 2014, and 2020 (forecast)

Source: IMF USD billion0 100 200 300 400 500 600

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2008 As of 2014 2020 (forecast) Series4





Macro-economic developmentPPP per capita in sub-Saharan Africa, segmented by country, 2008, 2014, and 2020 (forecast)

Int. dollars0 4,000 8,000 12,000 16,000

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2008 As of 2014 2020 (forecast) Series4

Source: IMF





Macro-economic developmentResidential mortgage and non-mortgage consumer balances outstanding, 2009 to 2013

Source: Finaccord research

0

50

100

150

200

2009 2010 2011 2012 2013

Residential mortgage balances outstanding

Consumer non-mortgage balances outstanding

USD billion

France in 2013: USD 1.21 trillion (mortgage lending)

USD 331.7 billion (consumer lending)





Macro-economic developmentConsumer non-mortgage balances outstanding, segmented by country, 2013


0%

20%

40%

60%

80%

100%

Mortgage balances Consumer lending balances

South Africa Nine other countries in sub-Saharan Africa





Development of the banking sector Number of branches in sub-Saharan Africa, segmented by country, 2005 and 2013

0 1,000 2,000 3,000 4,000 5,000 6,000

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2005 As of 2013 Series3

Source: IMF





Development of the banking sector Number of branches per 100,000 adults in sub-Saharan Africa, segmented by country, 2013

12.7

5.0

6.1

6.0

4.0

5.5

10.3

2.6

3.0

4.7

0 5 10 15

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Brazil: 46Morocco: 22Tunisia: 17

Source: IMF





Development of the banking sector Number of deposit accounts in sub-Saharan Africa, segmented by country, 2005 to 2013

million0 10 20 30 40 50 60

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

As of 2005 As of 2013 Series3

Source: IMF





Development of the insurance sector GWP for life and non-life insurance in ten sub-Saharan African countries, 2009 to 2013

Source: Finaccord research, national sources

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013

Life insurance Non-life insurance tUSD billion





Development of the insurance sector Nominal and real CAGRs for life and non-life insurance, segmented by country, 2009 to 2013

-5% 0% 5% 10% 15% 20% 25% 30% 35%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Total

Nominal Real tricker






Development of the insurance sector Life and non-life insurance GWP per capita in sub-Saharan Africa, segmented by country, USD, 2013

44

20

20

35

8

11

6

4

23

0 20 40 60

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

1,060

1,028

European average in 2012: USD 1,724






Development of the insurance sector Life and non-life insurance GWP as percentage of GDP in sub-Saharan Africa, segmented by country,

2013

0.8%

1.7%

1.1%

3.4%

1.3%

0.6%

15.5%

0.9%

0.7%

1.5%

0% 5% 10% 15% 20%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

European average in 2012: 6.7%

In line with Eastern European countries






0% 20% 40% 60% 80% 100%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Average

Life insurance Non-life insurance

Development of the insurance sector The relative importance of life and non-life insurance in sub-Saharan Africa, segmented by county, 2013






Development of the bancassurance marketRegulatory environment for bancassurance in sub-Saharan Africa, overview of current status

Source: Finaccord research, national regulators

Country Assessment Comment

Angola No specific restrictions

Côte d'Ivoire No specific restrictions

Ghana No specific restrictions

Kenya No specific restrictions

Mozambique No specific restrictions

Nigeria Banks not allowed to own an insurer directly

South Africa No specific restrictions

Tanzania Currently no clear regulatory framework

Uganda Banks not permitted to sell stand-alone insurance

Zambia Currently no clear regulatory framework





Development of the bancassurance marketInvolvement in bancassurance of the ten largest retail banks in each country, 2014

Source: Finaccord research 0% 20% 40% 60% 80% 100%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Average

Bundled products offered Stand-alone products offered





Development of the bancassurance marketAverage number of insurance types offered by the ten largest retail banks in each country, 2014


2.3

5.5

3.2

5.6

4.9

4.2

6.1

3.4

2.3

3.2

4.3

0 2 4 6 8

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

Average





Development of the bancassurance marketOverall provision rates for insurance types offered by the ten largest retail banks in each country, 2014

18.0%

85.6%

13.8%

89.5%

21.0%

4.0%

64.0%

17.0%

4.0%

53.0%

10.0%

20.0%

15.0%

4.0%

18.0%

0% 20% 40% 60% 80% 100%

Accident insurance

Creditor insurance - loans

Creditor insurance - credit cards

Creditor insurance - mortgages

Funeral expenses insurance

Health / hospital cash plans

Household insurance

Investment-related life insurance

Medical expenses insurance

Personal motor insurance

Retirement savings

Risk life insurance

Travel insurance

Agricultural insurance

Commercial insurance






Development of the bancassurance marketWeighted operating models for insurance offered by the ten largest retail banks in each country, 2014

0% 20% 40% 60% 80% 100%

Angola

Côte d'Ivoire

Ghana

Kenya

Mozambique

Nigeria

South Africa

Tanzania

Uganda

Zambia

External underwriter Captive underwriterJV underwriter Multiple external underwritersOther Series6






Future outlookForecast for gross written premiums for life and non-life insurance in sub-Saharan Africa to 2020

0

20

40

60

80

100

120

2013 2020

Life insurance Non-life insurance t

USD billion






Any questions?

Sources and related Finaccord publications:

Bancassurance in sub-Saharan Africa: Current Status and Future Perspectives to 2020

Global Bancassurance: Strategies of the World's Top 125 Retail Banking Groups

Bancassurance country reports (covering over 30 different countries in the Asia-Pacific region, Europe and Latin America)



Economy & Finance

Bancassurance: A Global perspective on customer, products and distribution methods