Report prospectus bancassurance_china

Bancassurance in China: Life, Non-Life and Creditor Insurance

© Finaccord, 2012 Web: www.finaccord.com. E-mail: [email protected] 1


February 2012

http://www.finaccord.com/

mailto:[email protected]



Prospectus contents

What is the research?

What is the rationale?

How do banking institutions surveyed break down?

Which specific banking institutions were surveyed?

What is the structure of the report?

What are the key features of the research?

How can the research be used?

How can the PartnerBASE™ be used?

Who can use the research?

What are some of the key findings?

What is the price?

How can the research be purchased?

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What is the research?

Bancassurance in China: Life, Non-Life and Creditor Insurance is a study and related

PartnerBASE™ dataset examining the provision of life, non-life and creditor insurance by banks and

other lending institutions in China.

Drawing on the results of a survey of 110 banking entities in China, the study verifies the

percentage of organisations investigated that distribute each of the following 13 types of insurance:

accident insurance, creditor insurance related to consumer finance, creditor insurance related to

credit cards, creditor insurance related to mortgages, critical illness insurance, health / hospital

cash plans, household insurance, income protection insurance, investment-related life insurance,

medical expenses insurance, personal motor insurance, retirement savings, and risk life insurance.

For those banking entities that are active in one or more of these fields, the reports ascertain the

operating models that they use to source the type of insurance in question (e.g. external, joint

venture or captive underwriters) and the identity of the specific providers used. This information is

then displayed in terms of the weighted share of partnerships of these providers, which takes into

account the number of retail customers of the partner banking entities, thus highlighting those

insurance companies that hold the distribution relationships that offer the most potential.





What is the rationale?

There are several reasons for producing this report and associated PartnerBASE™ dataset about the

distribution by banks and other lending institutions of insurance products in China.

First and foremost, there are no other published sources of information that chronicle the current

status of this activity in similar depth. However, Finaccord established that over 40% of banking

organisations researched have an arrangement in place for selling at least one of the insurance

product types considered. This figure underlines the degree to which banks and other lending

institutions in China are increasingly interested in becoming distribution partners for these forms of

insurance. In addition, intervention on the part of the China Insurance Regulatory Commission

(CIRC) is changing the bancassurance landscape. In particular, new regulations are likely to see

Chinese banks reducing the number of insurance companies from which they source products,

entering into longer-term deals with those companies, migrating to a greater extent to distribution

agreements forged at a nationwide or near-nationwide level as opposed to a regional or even local

level, and implementing more professional sales practices. Moreover, the degree to which Chinese

banks and insurance companies take cross-shareholdings in one another is also increasing as a

result of changing regulations.





How do banking institutions

surveyed break down?

City

commercial

bank, 55

Bank, 20

Rural

commmercial

bank, 11

Foreign bank,

10

Automotive

captive, 7

Retail sector

card issuer, 3 Specialised

lender, 4





Which specific banking

institutions were surveyed?

AEON Credit Service

Agricultural Bank of China

Bank of Beijing

Bank of Changsha

Bank of China

Bank of Chongqing

Bank of Communications

Bank of Dalian

Bank of Dandong

Bank of Dongguan

Bank of Fushun

Bank of Fuxin

Bank of Guangzhou

Bank of Hanzhou

Bank of Jiangsu

Bank of Jiaxing

Bank of Jilin

Bank of Jinzhou

Bank of Lanzhou

Bank of Liaoyang

Bank of Nanjing

Bank of Ningbo

Bank of Qingdao

Bank of Shanghai

Bank of Shaoxing

Bank of Taizhou

Bank of Tianjin

Bank of Wenzhou

Bank of Xian

Bank of Yingkou

Beijing Rural Commercial Bank

Canzhou City Commercial Bank

Changshu Rural Commercial Bank

Chengdu Rural Commercial Bank

Chery Huiyin Auto Finance

China Bohai Bank

China CITIC Bank

China Construction Bank

China Everbright Bank

China Guangfa Bank

China Merchants Bank

China Minsheng Bank

China Zheshang Bank

Chongqing Rural Comm. Bank

Citibank

Dah Sing Bank

Daqing City Commercial Bank

Datong City Commercial Bank

DBS Bank

Deyang City Commercial Bank

Dongfeng Nissan Auto Finance

Dongfeng Peugeot Citroen Auto Fin.

Evergrowing Bank

First Automobile Finance

Ford Automotive Finance

Fudian Bank

Fujian Haixia Bank

Fujian Yonghui

Ganzhou City Commercial Bank

GMAC-SAIC Automotive Finance

Guangxi Beibu Gulf Bank

Guangzhou Rural Commercial Bank

Guilin Bank

Guiyang City Commercial Bank

Haina International Auto Leasing

Hana Bank

Hang Seng Bank

Harbin Bank

Home Mart

HSBC

Hua Xia Bank

Huishang Bank

ICBC

Industrial Bank (Fujian)

Jiangsu Lian. Dongfang Rural Bank

Jiaozuo City Commercial Bank

Jinan City Commercial Bank

Jingzhou City Commercial Bank

Jinshang Bank

Jiujiang City Commercial Bank

Langfang City Commercial Bank

Maanshan Rural Commercial Bank

Mercedes-Benz Auto Finance

Nanjing City Commercial Bank

Nanyang City Commercial Bank

OCBC

Oney Banque Accord

Orient Home

Orient Jianghuai Auto Finance

Ping An Bank

Postal Savings Bank of China

Shanghai Pudong Development Bank

Shanghai Rural Commercial Bank

Shengjing Bank

Shenzhen City Commercial Bank

Shenzhen Development Bank

Shenzhen Rural Commercial Bank

Société Générale

Standard Chartered

Tangshan City Commercial Bank

The Bank of East Asia

Weifang City Commercial Bank

Wuhan Rural Commercial Bank

Wujiang Rural Commercial Bank

Xianyang City Commercial Bank

Yichang City Commercial Bank

Zhangjiang City Commercial Bank

Zhejiang Tailong Commercial Bank

Zhuhai City Commercial Bank

Zigong City Commercial Bank

Banks and other lending institutions included in the PartnerBASE™ dataset are as follows:





What is the structure of the report?

Executive Summary: providing a concise evaluation of the principal findings of the report.

Introduction: offering rationale, description of methodology and some definitions.

Market Analysis: beginning with introductions to China’s banking and bancassurance sectors, this

main chapter is then composed of five sections examining bancassurance activity across five broad

product categories: investment-related life insurance and retirement savings; protection-related life

insurance (composed of risk life, critical illness and income protection insurance); accident and

health insurance (made up of accident and medical expenses insurance plus health / hospital cash

plans); personal motor and household insurance; and creditor insurance (covering policies related

to mortgages, consumer finance and credit cards).

In addition to the analysis of and commentary about bancassurance partnerships for each of the 13

individual insurance products, the five sections also present standardised market size and growth

data (including lending market data in the case of mortgages, consumer finance and credit cards),

observations concerning the development and impact of bancassurance generally for each product

category or product, and figures illustrating the size and growth of key bancassurance underwriters

(including captives, joint ventures and other underwriters focused wholly or mainly on the bank

distribution channel).





What are the key features of the research?

Key features of this report include:

• analysis of all traceable partnerships for the distribution of 13 individual types of personal

insurance through banking entities in China;

• identification of the underwriters or other product providers used by the banks and other lending

institutions that are active in these areas;

• computation of the weighted share of bancassurance partnerships of these product providers,

illustrating which competitors hold the most significant relationships and which are limited to

relatively minor agreements;

• discussion of how new regulations are changing the way in which Chinese bancassurance works,

with important implications for aspiring product providers;

• quantification of the size, segmentation and growth of gross written premiums for the product

categories and markets covered in China.





How can the research be used?

You may be able to use this report and the PartnerBASE™ dataset that accompanies it in one or

more of the following ways:

• gain access to a source of information that provides a comprehensive overview of the provision of

personal insurance products by all significant banking entities in China;

• identify partnership opportunities for the same personal insurance products that may arise either

because a banking institution is not currently active or because there is scope for replacing an

existing initiative;

• understand which underwriters and other product providers have been successful in establishing

distribution relationships with the most important banking entities in China;

• assess how the evolving regulatory environment may open up or block opportunities for your

organisation to sell through the bank distribution channel;

• appreciate the magnitude of the opportunity to sell personal insurance products through banks

and other lending institutions in China.




© Finaccord, 2012 Web: www.finaccord.com. E-mail: [email protected]

Name of organisation

Estimated number

of retail customers

(000s)

Product type Product offered? Operating model Partner(s)

China Merchants Bank 36,269 Critical illness insurance Yes Multiple external underwriters China Life, Taikang

China Minsheng Bank 15,525 Critical illness insurance Yes External underwriter Taiping

China Zheshang Bank 1,816 Critical illness insurance No

Chongqing Rural Commercial Bank 9,357 Critical illness insurance No

Citibank 328 Critical illness insurance Yes External underwriter Sino-US United MetLife

10

How can the PartnerBASE™ be used?

Filter by product type

Choose

operating model

Identify insurance

underwriters

Look up specific

organisations

See the estimated

number of retail

customers for each

organisation

Note - The PartnerBASE™ also includes fields showing the category of organisation, its UHC (where part of a major group) and the UHCs that own

or co-own (in the case of joint ventures) the partners used for each product type.

Source: Finaccord Bancassurance in China PartnerBASE





Who can use the research?

1. Insurance underwriters: this study offers a uniquely comprehensive guide to the status of

bancassurance in China that can be used to identity partnership opportunities and to monitor

competitor activity;

2. Banks and other lending institutions: the research will help banking entities active in China to

understand how their bancassurance strategy compares to that of other comparable institutions

in their domestic market;

3. Management consultancies: are you helping an insurance company or bank with its

bancassurance strategy in China? Understand the current status of bank distribution of

personal insurance products in this country, saving time and effort on researching the subject

yourself;

4. Investment banks and private equity companies: while most bancassurance initiatives in China

are organised by banks in conjunction with external underwriters, several captive and joint

venture companies exist and this research may be useful to understanding how there may be

scope for ownership configurations to change in future.





What are some of the key findings?

1. For investment-related life insurance, a significant proportion of banks

selling these policies do so in conjunction with multiple external providers

Source: Finaccord Bancassurance in China PartnerBASE

INVESTMENT-RELATED LIFE INSURANCE IN CHINA:

BANK PROVISION RATE AND OPERATING MODELS

INVESTMENT-RELATED LIFE INSURANCE IN CHINA : WEIGHTED

PROVIDER SHARES OF BANCASSURANCE PARTNERSHIPS

% of organisations offering product, and operating models used

China Life, 20.0%

Taikang, 16.0%

Ping An, 15.0% Allianz China Life, 11.3%

Sino-US United

MetLife, 10.6%

New China Life, 5.6%

AIA, 3.6%

PICC, 3.6%

Other, 14.4%

0%

20%

40%

60%

80%

100%

Product offered Operating model

Other

JV underwriter

Captive underwriter

Multiple external underwriters

External underwriter





Source: CIRC, Finaccord estimates

2. In the fast-growing combined market for personal motor and household

insurance in China, personal motor accounts for over 90% of the total

What are some of the key findings? (cont.)

USD billion

Household insurance

Personal motor insurance

20

16

12

8

4

0

2007 2008 2009 2010 2011





What are some of the key findings? (cont.)

3. Key findings from the executive summary include:

•within the relevant universe of banking entities (i.e. all organisations researched other than

automotive finance captives), bancassurance provision rates for investment-related life insurance

and retirement savings were 42.0% and 28.0%, respectively;

• among the same entities, risk life insurance and critical illness insurance registered equivalent

figures of 39.0% and 23.0% respectively although no bank was found to offer any form of income

protection insurance;

• provision rates are lower for accident insurance, medical expenses insurance, health / hospital

cash plans, personal motor insurance and household insurance, although as these sectors expand

in future, banks could be among the most significant distributors;

• across all forms of insurance investigated Finaccord identified two underwriters acting in a captive

capacity, namely China Post Life (for Postal Savings Bank of China) and Ping An (for Ping An

Bank) and four joint venture underwriters: CITIC Prudential, HSBC Life, ING-BoB Life Insurance

and Sun Life Everbright.





What are the prices?

Bancassurance in China: Life, Non-Life and Creditor Insurance is provided as an Adobe Acrobat

PDF document. The PartnerBASE™ dataset that accompanies it at no further charge is in

Microsoft Excel format. The price for this study and those for other reports published by Finaccord

about bancassurance are as follows:

REPORT


Bancassurance in Austria, Belgium etc.: Life, Non-Life and Creditor Insurance *

Creditor Insurance in Northern, Central and Eastern Europe

Creditor Insurance in Southern and Western Europe

Life Bancassurance in Europe: Investment-Related Life Insurance and Retirement Savings

Life Bancassurance in Europe: Protection-Related Life Insurance

Non-Life Bancassurance in Europe: Accident and Health Insurance

Non-Life Bancassurance in Europe: Motor and Household Insurance

PRICE *

GBP 995

GBP 795

GBP 2,495

GBP 2,495

GBP 2,995

GBP 2,995

GBP 2,995

GBP 2,995

* Titles focused on single territories are available for all 20 countries covered by this series.

For UK-based clients, VAT at the prevailing rate will be added to the basic price.

Costs quoted are for a single site user licence only.

For a corporate user licence, please see the next slide for further details.

Invoices can be paid in EUR or USD, at the prevailing exchange rate, if preferred.





How can the research be purchased?

Simple. Just go to the relevant area of the Finaccord web site available at

www.finaccord.com/order_eu_bancassurance_single_country_reports.htm and fill in the online

order form, clearly indicating:

• report required

• type of corporate user licence, if required *

• billing name

• address and e-mail address

• purchase order number, if applicable

Please allow up to one working day for the delivery of electronic copy by e-mail.

* For the corporate user licence please choose one of the following options:

1. One office, one country: no supplement over and above basic cost of reports ordered

2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered

3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered

4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered

VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers.



http://www.finaccord.com/order_eu_bancassurance_single_country_reports.htm







Report prospectus bancassurance_china

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