Raiff Bancassurance
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Transcript of Raiff Bancassurance
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Alois PichlerAffluent Banking/Insurance
Exploiting BancassuranceInsurance Opportunities in CEE
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Agenda
Raiffeisen International – An Introduction
Insurance Market Environment
Bancassurance Sales Opportunity
Our Setup and Range of Products
Our Expectations and Best Practice
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RI – The Leading Pure Play CEE Banking Group
Leadership
Growth
Profitability
Business Strategy
Unique Network Of Banks Covering 16 CEE MarketsTop 3 Bank By Assets In 9 Markets; No.1 In TwoStrong And Well Known Brand “Raiffeisen”
Proven Ability To Exploit Highest Growth Regions Of Europe: 10-year CAGR In Assets Of Approximately 40%
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
Clear Focus On Retail Banking And Small & Medium-sized Businesses
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Ukraine
Dynamic Expansion of Our Footprint
Hungary
1987 1991 1993 1994 1996 1998 2000 2002 2003 2004
Poland Bulgaria
Slovenia Belarus
Czech Republic Russia
Bosnia and Herzegovina Kosovo
Croatia
Serbia
Slovakia
Romania
Successful Greenfield Expansion
… Complemented By Targeted And Well Timed Acquisitions.
Albania
Ukraine
2006
Russia
CzechRepublic
Romania
20052001
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Unique CEE Network in High Growth Markets
* At 30/06/2007
Central Europe
Commonwealth ofIndependent States
SoutheasternEurope
Customers13.5 m
Outlets3,050
Staff:57,019
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Bosnia & H.
Aval (Ukraine) and Impex (Russia) Improve our Strategic Positioning
Market SharePosition
Average Nominal GDP Growth Rate 2006-2009e
Top
1 -
3>6
No. ofCountries
3
3
>
9
Top
4 –
6
CroatiaSlovakia
Serbia
Kosovo
Albania
RomaniaBelarusBulgaria
HungaryCzechRepublic
Poland
Slovenia
0% 2% 4% 6% 8% 10% 12%
Ukraine
Russia
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Branch Expansion Plans Through To 2009
Poland2009: 120
Kosovo2009: 40
Hungary2009: 160
Czech Republic
2009: 120
Croatia2009: 75
Bulgaria2009: 190
Bosnia and Herzegovina2009: 100
Ukraine2009: 1,300
Romania2009: 420
Russia2009: 350
Serbia 2009: 120
Slovakia2009: 180
Slovenia2009: 14
Albania2009: 105
Belarus2009: 100
Total Branches*
2009: 3,450
* Including leasing and other branches
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Strong Asset and Profit Growth
‘03 ‘04
20
41
‘05
29
€56
‘06
Assets
‘03 ‘04
382
‘05 ‘06
Profit
209179
594
CAGR: 39%
(€ million)
CAGR: 39%
(€ billion)
9M ‘07
€68
9M ‘07
€626
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Income Contribution By Region
47%23%
30%
CISBelarus, Russia,
Ukraine, Kasakhstan
Central Europe (CE)Poland, Czech, Hungary,
Slovenia, Slovakia
South East Europe (SEE)Croatia, Bulgaria, Romania,
Serbia, Bosnia, Albania, Kosovo
CE
CIS
SEE
CIS
SEE
2004 9M 2007Pre-Tax Profit
€ 341 mmPre-Tax Profit
€ 953 mm
36%
37%
27%
CE
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Income Contribution By Business Segment
2004 9M 2007
Treasury24% Retail
37%
Treasury 15%
Corporate 48%
Retail 9%
Corporate 67%
Pre-Tax Profit€ 341 mm
Pre-Tax Profit€ 953 mm
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Stock Price
Total Return of 217% since IPO
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Agenda
Raiffeisen International – An Introduction
Insurance Market Environment
Bancassurance Sales Opportunity
Our Setup and Range of Products
Our Expectations and Best Practice
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Banks Are A Dominant Or Very Important Channel For Life In Western EuropeLife distribution channel market share, percent
Source: National insurance statistics, McKinsey Research
ESTIMATE
OtherBanks
131991
86
2005
Portugal
37
1991
69
2005
Spain
39
1990
62
2005
France
21990
53
2005
Italy
Key drivers
New product focus (e.g., unit-linked)
Changed customer needs throughpension reform /taxIncentives
Distribution capabilities of banks
111990
45
2004
Belgium
91990
28
2005
Germany
21990 2005
Netherlands
41990
102004
UK
15 - 20
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In CEE, Life Bancassurance Has Also Significantly Increased
Life distribution channel market share, percent
Source: VVO, McKinsey
ESTIMATE
45
1997
55
2005
Austria
51998
20
2005
Czech Republic
41998
19
2005
Slovakia
51998
17
2005
Hungary
20050
1998
10 - 200
1998
14
2005
Romania Poland
OtherBanks
14Source: Zeb/, EFMA (2005); RI analysis
Insurance significantly
contributes to a retail bank’s
revenue stream in mature
markets.
41%
DevelopingMarkets
Markets inTransition
MatureMarkets
Loans
Payments
Investments
RU, UA, SM, BH,
AL, KO, BY
PL, CZ, SK, HR, SL HU,
RO, BG
2% 5%
Percent of averagehousehold profitability
Structure Of The Potential Household Returns
Insurance
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Agenda
Raiffeisen International – An Introduction
Insurance Market Environment
Bancassurance Sales Opportunity
Our Setup and Range of Products
Our Expectations and Best Practice
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Saving/currentaccount
Auto insurance
Home insurance
Funds, Stocks
Pension
Life insurance
Preference for Receiving Advice before Purchase (by product)
NOT prefer Prefer
Source: Capgemini Analysis, 2006 – Total UK, US, FR, GER, IT, NL, ES
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Factors Influencing Customer Purchasing Decisions
Source: Capgemini Analysis, 2006 – Total UK, US, FR, GER, IT, NL, ES
Price38%
Product 22%
Advice17%
Service10% ImportantNot important
Brand/ Trust13%
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Loyalty: Customers Who Buy Life Insurance Are “Sticky”
Source: Capgemini Analysis, 2006
LifeTotal: 10%
Non-LifeTotal: 39%
% of Customers changing Insurance Providers in the Last 5 Years
9% 9% 9%
26%31% 31%
34%
42%47%
63%
11% 13%10%10%
NL US FR IT GER ES UK
% o
f Cus
tom
ers
chan
ging
LifeNon-Life
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Respondents who think that institution is well placed to address retirement needs (%)
Italy
UK
France
Germany
Belgium
Netherland
Country Banks Insurance
Source: McKinsey 2007
74
38
48
24
53
21
8
19
37
7
11
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Sales Opportunity-Example: Retirement
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Customer Service as Claim Handling:Which Channel do Customers Prefer?
Agent/Financial Advisor
Phone/Other Direct
Internet
Through a Bank
Other
Source: Capgemini Analysis, 2006 –Total UK, US, FR, GER, IT, NL, ES
5%
7%
12%
36%
40%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
% of Customers
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Agenda
Raiffeisen International – An Introduction
Insurance Market Environment
Bancassurance Sales Opportunity
Our Setup and Range of Products
Our Expectations
22Source: Mystery Shopping, McKinsey
•Life•Health•Motor•Property/ Liability•Accident•Other
• Broad product range• Simple and complex
products• Attractive bundles
• Focused product range (e.g., no health/ motor)
• Simple products• Attractive bundles
Branding: Bank Insurance
2 Different Co-operation Models
The model we
prefer as well
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General KSFs and Bancassurance Principles of at RI
Management sees insurance as a core product and key priority.
Integrated sales approachFully integrated sales
approach for banking and insurance products
Scripted lead-over scheme to approach customers
Developed incentives for sale of insurance products reflecting product profitability to bank.
Key Success Factors for
Extensive training of branch personnelIdentification of customer needsFamiliarity with insurer’s IT interfaceBasic product knowledge with access
to specialists for more complicated issues
1
3
2
5
Select a Local Preferred Partner
4
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The Products
25BY, RU, UA, AL, KO, BH, CZ, SK SL, AL, KO, BH, PL, RO, BG
PPI on personal loans
PPI on mortgage loans; bundled home insurance
Credit Cards
SME insurance:
Direct marketing (DM)accident and health insurance
Unit-linked sold over-the-counter (OTC)
Endowment sold OTC
Accident and health sold OTC
Development path
» … Hmm this is starting to make us cash «
» Eureka! It’s so easy; why didn’t I do this earlier? «
» Ok I’ll do it coz’Our Boss says I should «
Our Evolution of Bancassurance Products
1
2
3
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For the Bank:
PPI is primarily a FEE−GENERATOR,
Secondly, a Risk-Mitigation tool.
For The Client:PPI provides Protection against
Credit Shield (Payment Protection Insurance, PPI) is a simple Insurance Cover tied to Loans.
Death
Disability
Unemployment
Loans: Credit Shield
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Insurance Can Contribute up to 40% of a Credit Card’s Income in the Long Run (Competitive Market):
40%
40%
20%
Margins
Insurance
Fees
Contribution to Profit:
Loans: Credit Card (Protection)
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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
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
Loans: Mortgage Endowment
PrincipalInterest
Standard Loan Endowment Loan
Endowment Loan Backed by Unit Linked FX Endowment Loan Backed by Unit Linked
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Short term deposits
Over the Counter Insurance Is The Final Color Of Our Savings Rainbow
Long term deposits
Endowment
Mutual Funds
Equity Funds
Unit Linked
Risk
Risk
Appe
tite
Appe
tite
Savings
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Client pushing Bank: „I want a loan!“
Bank pushing Client: „You need Insurance!“
Need to Push Insurance Sales
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Product Training: Does Sales-Staff understand the insurance product?
Is product an integral part of saving value proposition?
Sales Training: Does Sales-Staff know how to pro-actively sell?
Is insurer’s IT in place in the branch on POS?
Are sales promotion or incentive system in place?
Is Insurance product compelling – an added value for client?
Is the staff familiar with FAQs?
Are general insurance conditions accessible for the client?
Is marketing material available?
ProductSalesIT
Aspects Of A Successful »OTC« Push ...
Policy entered in Insurer’s IT system and printed in bank-branch at the same time
www is key for »OTC«
Secure Internet Connection on Point of Sales
Policyprinted on Point of Sale
Raiffeisen Bank Poland Example
Today’s Value
of the Unit-Linked Policy:
Raiffeisen Bank Poland Example
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Agenda
Raiffeisen International – An Introduction
Insurance Market Environment
Bancassurance Sales Opportunity
Our Setup and Range of Products
Our Expectations
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RI Insurance Vision and Aspiration
2007E
€ MM
Additional Insurance
Profit2011
Stand-alone OTC
2006 PPI Costs*
* Assumed cots to income ratio of 20% of the total commission from insurance.
9.220
In 2011 we expect
insurance to contribute
significantly to Retail
Profits
Thank You For Your Attention
Alois PichlerAffluent Banking/ Insurance
Raiffeisen InternationalBank-Holding AG
A-1030 Vienna, Am Stadtpark 9Tel.: +43 (1) 71707 2087e-mail: [email protected]
http://www.ri.co.at