Bancassurance Survey 2015 Kenya, Lloyds Africa Markets:
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Transcript of Bancassurance Survey 2015 Kenya, Lloyds Africa Markets:
Bancassurance
Survey 2015BY
WATSON MACHARIA, PARTNER – LLOYDS AFRICA MARKETS
Respondents
1. Bancassurance Consumers
2. Banks
3. Insures
Consumers By Age
18 to 24
17%
25 to 34
54%
35 to 44
21%
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 Kenyan middle class is growing fast and they are the
major clients for the insurance products.
Insurance Companies (23) Resolution Insurance
AIG Kenya 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
Kenya 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 Kenya
CFC Stanbic Bank
Chase Bank
Commercial Bank of Africa
Co-operative Bank of Kenya
Diamond Trust
Ecobank Kenya
Equatorial Commercial Bank
Equity Bank
Family Bank
First Community Bank
GT Bank Kenya
Housing Finance
I&M Bank
National Bank of Kenya
NIC Bank
Prime Bank
FAULU Micro Finance Bank
KWFT Micro Finance Bank
RAFIKI Micro Finance Bank
CENTURY Micro Finance Bank
Gulf African Bank
Kenya Commercial Bank
FINDINGSBANKS AND INSURERS
Number of distribution
agreements -Insurers
34%
11%33%
11%
11%1-5
5-10
10-15
15-20
More than 20
Number of distribution
agreements -Banks
31%
56%
13%
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
100.0%
18.8%
0.0%
18.8%
6.3%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%
Commission
Profit Share
Dividends
Fees
Other (please specify)
How do you compensate the bank for bancassurance sales?
Motivation -Banks
4.78
4.89
4.89
4.67
4.67
4.55 4.60 4.65 4.70 4.75 4.80 4.85 4.90 4.95
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
How important to you are the following reasons why banks venture into
bancassurance?
Challenges to Entry -Banks
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
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)
What were your greatest hindrances when venturing in bancassurance
distribution?
Challenges to entry -Insurers
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
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)
What were your greatest hindrances when venturing in
bancassurance distribution?
Preferred Partnership -Banks
0.00 1.00 2.00 3.00 4.00 5.00 6.00
Provide operational support, including technology support
Provide in-branch, point of sale support, e.g. insurance specialists, training,…
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
How likely are you to provide each of the following services if an insurance Company viewed
you as a "strategic partner"
Preferred Partnership -Insurers
0.00 1.00 2.00 3.00 4.00 5.00
Provide operational support, including technology support
Provide in-branch, point of sale support, e.g. insurance specialists, training,…
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
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
50.0%
37.5%
75.0%
Customer Surveys Mystery Shopping External Consultants advice
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
71.4%
42.9% 42.9%
Customer Surveys Mystery Shopping External Consultants advice
When profiling a potential bank partner, which of the following
professional advisory techniques did you use?
Effectiveness of Marketing Methods
Banks
0.00 1.00 2.00 3.00 4.00 5.00
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
How important to you are the fol lowing marketing methods in generating
qual ified bancassurance sales leads?
Effectiveness of Marketing Methods
Insurers
0.00 1.00 2.00 3.00 4.00 5.00
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
How important to you are the fol lowing marketing methods in generating
qual ified bancassurance sales leads?
Bancassurance on Technology
Banks
4.50
4.67
3.83
4.67
4.83
3.67
3.83
4.17
4.67
4.33
0.00 1.00 2.00 3.00 4.00 5.00 6.00
DISTRIBUTION CHANNELS
CUSTOMER SEGMENTATION/PROFILING
MARKETING & ADVERTISING
PRODUCT DEVELOPMENT & PRICING
CUSTOMER RETENTION
PRODUCT TRAINING
MARKET RESEARCH
CLAIMS ASSESSMENT
CUSTOMER SERVICE
CLAIMS PAYMENT
How important is technology integration in each of the following needs in
increasing bancassurance sales?
Bancassurance on Technology
Insurers
3.80 3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 4.70
Distribution channels
Customer Segmentation/Profiling
Marketing & Advertising
Product Development & Pricing
Customer Retention
Product Training
Market Research
Claims Assessment
Customer Service
Claims Payment
How important is technology integration in each of the following needs
in increasing bancassurance sales?
Client Segmentation
Banks
83.3%
16.7% 16.7%
66.7%
50.0%
16.7%
TYPE OF BANK
PRODUCTS HELD
CREDIT RATING LIVING STANDARDS
MEASURES
AGE GROUP HOUSE-HOLD INCOME WE DO NOT DO
CUSTOMER
SEGMENTATION
What type of bancassurance Customer segmentation criteria
do you use?
Client Segmentation
Insurers
57.1%
14.3%
21.4%
14.3%
28.6%
42.9%
TYPE OF BANK PRODUCTS HELD
CREDIT RATING LIVING STANDARDS MEASURES
AGE GROUP HOUSE-HOLD INCOME WE DO NOT DO CUSTOMER SEGMENTATION
What type of bancassurance Customer segmentation criteria do you use?
Client Segmentation Strategy
Banks
17%
33%
17%
33%
0%
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 Strategy
Insurers
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
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
ABC Bank
Bank of India
Ecobank
First Community Bank
GT Bank Kenya
I&M Bank
Jamii Bora Bank
Consolidated Bank
Equatorial Commercial Bank
Imperial Bank
K-Rep Bank
National Bank of Kenya
FAULU Micro Finance Bank
Prime Bank
NIC Bank
RAFIKI Micro Finance Bank
CFC Stanbic Bank
Chase Bank
Family Bank
Standard Chartered Bank
Barclays Bank of Kenya
KCB
Co-operative Bank of Kenya
Equity Bank
Which of the following institutions do you bank with?
Dominant Insurers in
Bancassurance
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
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
Which of the following companies did you purchase an
insurance product?
Product Awareness
3%
5% 8%
13%
17%
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
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Tele-sales through call
centre
Sign boards Advertisements Friends or relatives Bank Brochures Branch Advisory
agency
How did you know that you could buy your insurance from the
bank?
Perception; Banks vs Insurers on
New Insurance
Yes
77%
No
23%
Would You Consider to Purchase Insurance if Sold To You By Your Bank?
Perception; Banks vs Insurers on
Renewing Insurance
Yes
71%
No
29%
Would You Prefer To Renew Your Insurance Product Via Your Bank?
Preferred Bancassurance Classes
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00
Engineering Insurance
Aviation Insurance
Marine Insurance
Personal Accident Cover
Pension Plan
Life Insurance
Cover against Fire
Cover against Theft
Medical Cover
Motor Vehicle Insurance
Insurance Products likely to buy if sold by the bank instead of insurance
agent/broker?
Overall Perception on Banks Vs
Insurers
7 5 3
127
8 108
13
29
33 3134
22
8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
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.
Ahead this year @Lloyds_Research
Bancassurance Survey & Conference Uganda 2015
Bancassurance Survey & Conference Tanzania 2015
Africa Micro Forum:
Micro Finance & Micro Insurance
Private Banking & Wealth Management Survey: Kenya
Banking Performance Index: SSA Series
Insurance Performance Index :EA Series
Customer Satisfaction Index :EA Series
Bancassurance Survey Series
Q&A