The Next Bancassurance Innovations

Transcription

1 The Next Bancassurance Innovations Ola Oyekan, PhD Research & Development Specialist, RGA 12 th October, 2016

2 Agenda RGA and bancassurance Bancassurance trends & case studies Business models Global bancassurance market Products Distribution Sales process Summary 2

3 RGA s Bancassurance offering RGA Global Surveys Strategy Development Product and Pricing Underwriting Distribution Admin & Claims Reinsurance and Capital A Idea generation/ innovation workshops E Benefits design I AURA e- underwriting platform M Voice of the channel (VOC) studies Q Claims management outsourcing * U Quota share reinsurance B Market research and surveys F Policy contract wording J Global Underwriting Manual (GUM) N Mystery shopper studies R Claims manager training V Up-front project financing C Global market benchmarking G Pricing and assumptions K Underwriting questions development O Cross/up-sell predictive modelling S Electronic enrollment platforms * W Reserving and capital management D Business case development H Regulatory filing management L FAC support P Sales force/ advisor training support T Turnkey benefits admin * * In conjunction with 3rd party providers 3

4 RGA Bancassurance Surveys RGA South Africa Bancassurance Survey (2007, 2008, 2012, 2014, 2016) RGA US Survey Bridging the Cultural Divide (2008) RGA Middle East Survey Bridging the Cultural Divide (2009) RGA France Survey The Changing Landscape of Mortgage Insurance (2009) RGA India Survey Bridging the Cultural Divide (2010, 2012) RGA UK Bancassurance Survey (2015) RGA Australia/ New Zealand Bancassurance Survey (2013) RGA Japan Bancassurance Survey (2013, 2017) RGA Brazil Bancassurance Survey (2017) 4

5 Bancassurance models Distribution Agreement Playing the field Strategic Alliance Going Steady Joint Venture Moving in Integrated Bancassurance long-term commitment Source: RGA Global Bancassurance Surveys, LIMRA (2012) 5

6 .deep integration between banks and insurers Executive Buy-In Operational Integration Seamless technology interfaces that make all workflows electronically available through the bank & insurers core IT systems Culture Integration Minimize the cultural differences between the sales and support personnel Management Report Integration Alignment of sales targets and reporting 6

7 Single view of the customer Banking and insurance data integration A one client view A one client view doesn t exist, doesn t exist, 1 Access to client Access to client banking information banking information but not a completely but not a completely integrated integrated system, system, 2 2 Access for some channels channels and and some products, products, 1 1 Source: 2015 RGA South Africa Bancassurance Survey 7

8 Global Bancassurance Market Source: TechNavio (2013) Global Bancassurance Market 8

9 Bancassurance products Products split by premium Risk products Investment products *Credit life *Funeral cover Hospital cash Standalone personal accident Critical illness (CI) *Single premium (e.g., annuities) Recurring premium (e.g., endowments) 41% 12% 12% 26% 9% *Consumer Credit Insurance (CCI) *Term life only Trauma Term life (with a disability rider) Disability income Accidental death 14% 18% 17% 19% 30% 2% *Superannuation (e.g., annuities) Post-retirement products No data provided *Single premium whole life (SPWL) Foreign currency-denominated fixed whole life *Whole life hospital cash (WLHC) Level premium medical (cancer, WLHC, CI, hospital cash benefit) Level premium death benefit (WL, term life and income protection) Level premium Group Credit Life (CI, cancer, death) 40% 15% *Single premium annuities (variable and fixed annuities) Foreign currency-denominated fixed annuity Foreign currency-denominated variable annuity 45% * Leading bancassurance products Source: RGA Global Bancassurance Surveys 9

10 Exapansion of product offering Higher premium Universal Life HNW UL HNW Medical Reimbursement / CI Disability, Accident, Hospital Cash, CI Single Premium Whole Life Traditional and Variable Annuities Bank products linked to insurance Heavy savings products E.g. endowments, annuities Additional health products Term Life Lower premium Micro-insurance Low Income Funeral cover Mass Market Retirees Affluent / HNW Customer Target Segments Source: RGA Global Bancassurance Surveys 10

11 Case study: Product innovation Surgical cash product without a list of surgeries Targeted at middle class consumers All surgery is covered Low face amounts Benefits payout after; Surgical procedure > 48 hours in a certified hospital Underwriting two yes/no questions Reached > 12,000 insured lives in first year 11

12 Bancassurance distribution Bank tellers Branch managers Business bankers Branch consultants Wealth advisors In-branch sales force Tied and Multi-tied advisors Call centers Bancassurance distribution Independent Financial Advisors (IFAs) Mobile Online Growth channels Source: 2015 RGA South Africa Bancassurance Survey 12

13 Case study: Distribution Innovation Quick cover first UK life insurance journey designed for mobiles Primarily focus on customers who already identified their insurance needs and attracted by insurers brand via mobile from quotation to underwriting to payment Easy 2 mins application (Yes / No uw questions) Simple product that covers death and terminal illness only 90% of applicants who start the underwriting journey finish it Underwriting Acceptance Rate 60% 13

14 Case study: Distribution innovation Telemarketing, bank tellers, online, ATMs Bancassurance distribution 14

15 Bancassurance sales Areas of improvement for bancassurance sales_ Insurers perspective ` Embedded Transactional Standalone Customer segmentation Lead generation Product development Administration Customer service Sales training Underwriting Distribution Source: 2014 RGA Bancassurance Survey 15

16 Bespoke approach to customer segmentation Customer Segment Products Underwriting Marketing Approach Distribution Private Banking Comprehensive Innovative Targeted Limited Affluent / preferred Retirees Mass Market Varied approaches to lead generation Utilizing all the possible channels Low Income Simple Simple Source: RGA Global Surveys 16

17 Non-Standard Rate Case study: Predictive underwriting Southeast Asian Bancassurer Objectives To have a simplified underwriting and sales process with high take-up for the best risks To reduce acquisition cost To improve financial performance Business Application & Lift Plot Declined Rated Lift Plot of the Validation Results Data Two data sources combined o o Underwriting data at the time of Issue The bank s financial database About 80 variables available for modeling o For ex. Demographic Info, Bank & Insurance Product Info and Bank Transactions Average Non-Standard Rate GI Life GI SI Life Sorted Model Output 17

18 Summary Bancassurance is sizable, growing and increasingly important channel Growing trend towards exclusive arrangements.. Deep integration between the bank and insurer is vital to success Expansion of product offering to complex risk products Integrated multichannel distribution Understanding of customer buying behavior within each customer segment Use of predictive analytics to improve various processes across the bancassurance value chain. 18

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