© Swedbank
Bancassurance implementation in the Baltic countries
National Bancassurance Conference
Chisinau, November 2013
Mindaugas JusiusCEOSwedbank Life Insurance SE
© Swedbank
2. Convenience = simplicity
Our slogan “Peace of Mind”
• Simple • Convenient• Transparent (Open)
KISS
KeepItSimpleStandardized (Stupid)
Develop such products for the bank, which would your broker or tied agent will not be willing to sell at all.
© Swedbank
3. Target clients based on their needs
Bancassurance strength is access to:
• Customer income, age• Behavior data
• Lending- mortgage- consumer loans- leasing- credit cards
• Families• Childs
© Swedbank
Products and Processes
© Swedbank
Swedbank Life Insurance SE Bancassurance offering
Group Sub-Group Offering in
Latvia
Offering in Lithuania
Offering in
Estonia
Protection solutions Mortgage protection
Pure risk protection
Savings solutions Pension saving
Child saving
Investment solutions Investment (unit-linked) products
Other Corporate motivation schemes
Annuities
x
x
x
x
© Swedbank
Credit life..From “buy insurance with mortgage
loan” to protected mortgage loan
Product Credit life
Marketing name Protected mortgage loan
Positioning The aim is to cover mortgage loan in case one of mortgage borrower or co-borrower dies becomes disable during the contract term and not to leave obligations to relatives.
Targeted customers Swedbank Retail & Affluent customers with mortgage loans
Channel Mortgage sales channel
KPIs Volume based mortgage portfolio penetration
© Swedbank
Reviewed offering for the customer
7
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Previous traditional offer
New credit life
© Swedbank
Credit life process changes
8
Simplified health questionnaire
(8 or 15 easy to understand questions depending on the sum insured)
Fully integrated sales process with loan issuing (“one click”, no paper document
flow)
Tele-underwriting
Automatic premium collection from customers account
© Swedbank
Credit life penetration
9
Up to 80%
penetration with new loans
40%
penetration in the total mortgage portfolio
85%
Average loan protection
Credit life sales in Baltic Banking
0
5,000
10,000
15,000
20,000
25,000
30,000
2006 2007 2008 2009 2010 2011 2012
© Swedbank
Can price increase stimulate more sales?
10
New credit life sales in Latvia
2006 2007 2008
Grand Total credit life (with savings)
Grand Total credit life (pure protection)
Pure protection product can be considered 25% more expensive due to tax system, but simplicity and easy access creates more value for sales people and customers
© Swedbank
Can price increase stimulate more sales?
11
Pure protection product price was set based on customer survey
New credit life sales in Lithuania
2006 2007 2008
© Swedbank
Other products
© Swedbank
Positioning of protection insurance products
Product Credit life Simple term life Affluent term life
Marketing name Protected mortgage loan Family income protection Family income protection plus
Positioning The aim is to cover mortgage loan in case one of mortgage borrower or co-borrower dies becomes disable during the contract term and not to leave obligations to relatives.
The aim is to provide financial compensation for families in case family income decrease due to death of earner.
The aim is to provide financial compensation for families in case family income decrease due to death of earner.
Targeted customers Swedbank Retail & Affluent customers with mortgage loans
Swedbank Retail active Swedbank Affluent & VIP
Channel Mortgage sales channel Tellers Personal managers, Private banking
KPIs Volume based mortgage portfolio penetration
Net sales Net sales;
Risk under management
© Swedbank
Positioning of saving&investment insurance products
Product Pension insurance Saving insurance Investment insurance
Marketing name Safe Pension Fund Child fund Private portfolio, Investment fund portfolio
Positioning The aim is to accumulate sufficient money to be used after retirement.
The aim is to accumulate a fund which would enable financing studies or other needs of grown child.
The aim is to protect or increase the assets in medium-term perspective.
Targeted customers Swedbank Retail & Affluent customers & VIP
Swedbank Retail active & Affluent customers
Swedbank Affluent & VIP
Channel Tellers Tellers Personal managers, Private banking
KPIs Number of contracts Number of new contracts Assets under management
© Swedbank
Channels and processes
..from a stand alone solutions to fully integrated processes and systems
© Swedbank
Central IT System Supported by Insurance Dedicated IT team Is A Competitive Advantage
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takes info from:
• Internal core systems
sends info to
• Internal core systems • CRM systems• Payment systems • Finance systems • Data Warehouse • Alerts/Notice/Letter systems • Reporting systems • etc
Database & Code
Front-office application
(integrated to bank)
Internetbank application
(integrated to bank)
Back-office application
© Swedbank
Physical and E-Channels
• All products available in bank branch are also available in the Internet bank– Internet bank sales reached ca. 10%
• Majority of follow-up service functionality is available in the Internet bank (changes, reporting, graphs, etc.)– Ca. 50% of follow-up services done in the Internet bank
• Quality double-check, channel integration is used for “advice-intensive” operations – e.g. pre-advice over the phone is required before canceling an agreement in the Internet bank
• One application development & same interfaces – e.g. the advisor’s view is the same as the customer’s view in the Internet bank, making it easy to give
advice over the phone
• Straightforward processes (immediate, automatic execution)– e.g. >50% credit life policies are underwritten immediately at point of sales incl policy issue – e.g. ca. 80% of tele-interviews are completed within 2 working days followed usually by customer
confirmation using Internet bank
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© Swedbank
Thank you!
© Swedbank
Key success factors
© Swedbank
1. Financial model
Profit sharing, but not sales commissions
Better customer selection, less claims
Interest for after-sales service
Open doors for integrated solutions
© Swedbank
4. Act as a regular wholesaler
How would you sell Santa Maria spices in ICA stores?
1 stepEnter
2 stepMake ICA customer choose you
© Swedbank
5. Integrate systems and processes
• Integrate insurance offering with other bank products• Align interface formats ”colors and fonts”
© Swedbank
Key Success Factors: Insurance Company <=> BankHow to Keep The Wheel Running?
• Systematic co-operation models • Mutual financial interest & bank support for the insurance business
• Clear, value-added productsand services, avoid internal competition
• Middle-class focus oriented to large volumes and scale effect
• Simplified products and processes (stand-alone risk vs. saving products, tele-underwriting)
• Integrated solutions (channels, IT systems, Internet bank, products, etc.)
• Remove all complexity from channels(e.g. claims and underwriting)
• Strong product support• Competent sales channel • Visibility and PR (both internal
and external)