Raiff Bancassurance
- 1. Exploiting Bancassurance Insurance Opportunities in CEE Alois Pichler Affluent Banking/ Insurance 0
- 2. Agenda Raiffeisen International – An Introduction Insurance Market Environment Bancassurance Sales Opportunity Our Setup and Range of Products Our Expectations and Best Practice 1
- 3. RI – The Leading Pure Play CEE Banking Group Unique Network Of Banks Covering 16 CEE Markets Leadership Top 3 Bank By Assets In 9 Markets; No.1 In Two Strong And Well Known Brand “Raiffeisen” Proven Ability To Exploit Highest Growth Regions Of Europe: Growth 10-year CAGR In Assets Of Approximately 40% Profitability Pre-tax ROE 26.6%; 5-year CAGR In Net Income Of 55%; Cost Efficiency: Cost/Income Ratio Of 56% At The End Of Q3 Business Clear Focus On Retail Banking And Small & Strategy Medium-sized Businesses 2
- 4. Dynamic Expansion of Our Footprint Hungary Poland Czech Bulgaria Russia Romania Serbia Successful Greenfield Republic Expansion Slovakia Croatia Ukraine 1987 1991 1993 1994 1996 1998 2000 2001 2002 2003 2004 2005 2006 … Complemented By Bosnia and Herzegovina Slovenia Kosovo Belarus Ukraine Russia Targeted And Well Timed Acquisitions. Albania Czech Romania Republic 3
- 5. Unique CEE Network in High Growth Markets Commonwealth of Independent States Customers 13.5 m Central Europe Outlets 3,050 Staff: 57,019 Southeastern Europe 4 * At 30/06/2007
- 6. Aval (Ukraine) and Impex (Russia) Improve our Strategic Positioning Market Share No. of Position Countries Serbia Albania Bosnia & H. Ukraine 1- 3 Top 9 Kosovo Bulgaria Belarus Slovakia Romania Croatia 4–6 Top 3 Czech Hungary Republic Russia 3 >6 Slovenia Poland 0% 2% 4% 6% 8% 10% > 12% Average Nominal GDP Growth Rate 2006-2009e 5
- 7. Branch Expansion Plans Through To 2009 Slovenia Czech Poland Slovakia Belarus Hungary Republic 2009: 14 2009: 120 2009: 120 2009: 180 2009: 100 2009: 160 Croatia Russia 2009: 75 2009: 350 Bosnia and Ukraine Herzegovina 2009: 2009: 100 1,300 Serbia Romania 2009: 120 2009: 420 Total Branches* Kosovo Albania 2009: 3,450 Bulgaria 2009: 40 2009: 105 2009: 190 * Including leasing and other branches 6
- 8. Strong Asset and Profit Growth Assets (€ billion) Profit (€ million) €68 €626 €56 594 9% 9% R :3 41 3 AG R: C G 382 CA 29 20 209 179 ‘03 ‘04 ‘05 ‘06 9M ‘07 ‘03 ‘04 ‘05 ‘06 9M ‘07 7
- 9. Income Contribution By Region 2004 9M 2007 Pre-Tax Profit Pre-Tax Profit € 341 mm € 953 mm CE CIS 23% CIS 47% 27% 36% 30% CE SEE 37% SEE Central Europe (CE) South East Europe (SEE) CIS Poland, Czech, Hungary, Croatia, Bulgaria, Romania, Belarus, Russia, Slovenia, Slovakia Serbia, Bosnia, Albania, Kosovo Ukraine, Kasakhstan 8
- 10. Income Contribution By Business Segment 2004 9M 2007 Pre-Tax Profit Pre-Tax Profit € 341 mm € 953 mm Treasury 15% Treasury 24% Retail Corporate 37% 67% Retail Corporate 9% 48% 9
- 11. Stock Price Total Return of 217% since IPO 10
- 12. Agenda Raiffeisen International – An Introduction Insurance Market Environment Bancassurance Sales Opportunity Our Setup and Range of Products Our Expectations and Best Practice 11
- 13. Banks Are A Dominant Or Very Important Channel For Life In Western Europe ESTIMATE Other Life distribution channel market share, percent Banks Portuga Spain France Italy l 86 Key drivers 69 62 39 53 37 13 2 New product focus 1991 2005 1991 2005 1990 2005 1990 2005 (e.g., unit-linked) Changed customer Belgium Germany Netherlands UK needs through pension reform /tax Incentives 15 - 20 Distribution capabilities 45 of banks 28 11 9 2 4 10 1990 2004 1990 2005 1990 2005 1990 2004 Source: National insurance statistics, McKinsey Research 12
- 14. In CEE, Life Bancassurance Has Also Significantly Increased ESTIMATE Other Life distribution channel market share, percent Banks Austria Czech Republic Slovakia Hungary Romania Poland 55 45 20 19 17 10 - 20 14 5 4 5 0 0 1997 2005 1998 2005 1998 2005 1998 2005 1998 2005 1998 2005 13 Source: VVO, McKinsey
- 15. Structure Of The Potential Household Returns Percent of average household profitability Insurance significantly Loans contributes to a retail bank’s revenue Payments stream in 41% mature Investments markets. Insurance 2% 5% Developing Markets in Mature Markets Transition Markets RU, UA, PL, CZ, SK, SM, BH, HR, SL HU, AL, KO, BY RO, BG Source: Zeb/, EFMA (2005); RI analysis 14
- 16. Agenda Raiffeisen International – An Introduction Insurance Market Environment Bancassurance Sales Opportunity Our Setup and Range of Products Our Expectations and Best Practice 15
- 17. Preference for Receiving Advice before Purchase (by product) Life insurance Pension Funds, Stocks Home insurance Auto insurance Saving/current account NOT prefer Prefer Source: Capgemini Analysis, 2006 – Total UK, US, FR, GER, IT, NL, ES 16
- 18. Factors Influencing Customer Purchasing Decisions Service Not important 10% Important Brand/ Trust Price 13% 38% Advice 17% Product Source: Capgemini Analysis, 2006 – Total UK, US, FR, GER, IT, NL, ES 22% 17
- 19. Loyalty: Customers Who Buy Life Insurance Are “Sticky” 63% Life Non-Life % of Customers changing 47% 42% Non-Life 34% Total: 39% 31% 31% 26% 11% 13% 10% 9% 9% 9% 10% Life Total: 10% NL US FR IT GER ES UK Source: Capgemini Analysis, 2006 % of Customers changing Insurance Providers in the Last 5 Years 18
- 20. Sales Opportunity-Example: Retirement Respondents who think that institution is well placed to address retirement needs (%) Country Banks Insurance Italy 74 8 UK 38 19 France 48 37 Germany 24 7 Belgium 53 11 Netherland 21 26 Source: McKinsey 19 2007
- 21. Customer Service as Claim Handling: Which Channel do Customers Prefer? Agent/ 40% Financial Advisor Phone/Other Direct 36% Internet 12% Through a Bank 7% Other 5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% % of Customers Source: Capgemini Analysis, 2006 – Total UK, US, FR, GER, IT, NL, ES 20
- 22. Agenda Raiffeisen International – An Introduction Insurance Market Environment Bancassurance Sales Opportunity Our Setup and Range of Products Our Expectations 21
- 23. 2 Different Co-operation Models e d el w ll mo s we The er a f pre •Life •Health •Motor •Property/ Liability •Accident •Other Branding: Bank Insurance • Focused product range • Broad product range (e.g., no health/ motor) • Simple and complex • Simple products products • Attractive bundles • Attractive bundles Source: Mystery Shopping, McKinsey 22
- 24. General KSFs and Bancassurance Principles of at RI Key Success Factors for 1 Management sees insurance as a 4 Developed incentives for sale of core product and key priority. insurance products reflecting product profitability to bank. 2 Select a Local Preferred Partner 5 Extensive training of branch personnel 3 Integrated sales approach Identification of customer needs Fully integrated sales Familiarity with insurer’s IT interface approach for banking and Basic product knowledge with access insurance products to specialists for more complicated issues Scripted lead-over scheme to approach customers 23
- 25. The Products 24
- 26. Our Evolution of Bancassurance Products » Eureka! It’s so easy; why didn’t I do this earlier? « 3 » … Hmm this is starting to make us cash « 2 Unit-linked sold over- » Ok I’ll do it coz’ the-counter (OTC) Our Boss says I Credit Cards Endowment sold OTC should « 1 SME insurance: Accident and health sold OTC Direct marketing (DM) PPI on personal loans accident and health PPI on mortgage insurance loans; bundled home insurance BY, RU, UA, AL, KO, BH, CZ, SK SL, AL, KO, BH, PL, RO, BG Development path 25
- 27. Loans: Credit Shield Credit Shield (Payment Protection Insurance, PPI) is a simple Insurance Cover tied to Loans. For The Client: For the Bank: PPI provides Protection against PPI is primarily a Unemployment FEE−GENERATOR, Disability Secondly, a Risk- Death Mitigation tool. 26
- 28. Loans: Credit Card (Protection) Contribution to Profit: Insurance Can Contribute up to 40% 20% Fees of a Credit Card’s Income in the Long Margins 40% Run (Competitive Market): Insurance 40% 27
- 29. Loans: Mortgage Endowment Standard Loan Endowment Loan Interest Principal 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Endowment Loan Backed by Unit Linked FX Endowment Loan Backed by Unit Linked 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 28 20 19
- 30. Savings Equity Funds Unit Linked Mutual Funds e tit pe Endowment Ap sk Ri Long term deposits Short term deposits Over the Counter Insurance Is The Final Color Of Our Savings Rainbow 29
- 31. Need to Push Insurance Sales Client pushing Bank: „I want a loan!“ Bank pushing Client: „You need Insurance!“ 30
- 32. Aspects Of A Successful »OTC« Push ... Is Insurance product compelling – an added value for client? Is insurer’s IT in place in the branch on POS? Is product an integral part of saving value proposition? Product Training: Does Sales-Staff understand the insurance product? Sales Training: Does Sales-Staff know how to pro-actively sell? Sales Product IT Are sales promotion or incentive system in place? Are general insurance conditions accessible for the client? Is the staff familiar with FAQs? Is marketing material available? 31
- 33. www is key for »OTC« Policy entered in Insurer’s IT system and printed in bank-branch at Secure Internet the same time Connection on Point of Sales
- 34. Raiffeisen Bank Poland Example Policy printed on Point of Sale
- 35. Raiffeisen Bank Poland Example Today’s Value of the Unit- Linked Policy:
- 36. Agenda Raiffeisen International – An Introduction Insurance Market Environment Bancassurance Sales Opportunity Our Setup and Range of Products Our Expectations 35
- 37. RI Insurance Vision and Aspiration € MM e expect In 2 011 w contribute in s u rance to Retail signifi cantly to Pr o f i t s 20 9.2 2006 2007E PPI Additional Stand- Costs* Profit Insurance alone OTC 2011 36 * Assumed cots to income ratio of 20% of the total commission from insurance.
- 38. Thank You For Your Attention Alois Pichler Affluent Banking/ Insurance Raiffeisen International Bank-Holding AG A-1030 Vienna, Am Stadtpark 9 Tel.: +43 (1) 71707 2087 e-mail: alois.pichler@ri.co.at http://www.ri.co.at