HOW TO EXPAND AND CULTIVATE THE STRATEGIC PARTNERSHIP SUSTAINABLY Munich May 12 th -13 th, 2016 H. Alper Erdinc Chief Sales Officer NN Turkey Alper.Erdinc@nnhayatemeklilik.com.tr
NN Turkey Who we are? 13 years Experience 900 K Customer 310 Employee 2.000 Authorized Sales Agents 300 Agency 4 Joint Ventures 291 ING Bank Branch 107 Anadolu Bank Branch ~ 700 Bn EUR AuM Ranking 6th on AuM 90% of coverage Service Level 2
To warm up: Let s have a small quiz about Turkey 1. How much of the population in Turkey is under the age 25? a) 17% b) 29% c) 35% d) 41% 2. How many Facebook users exist in Turkey? a) 8 mln b) 14 mln c) 22 mln d) 41 mln 3. What is the internet penetration in Turkey? a) 56% b) 60% c) 68% d) 96 % 4. What is the number of individual languages spoken in Turkey? a) 1 b) 5 c) 14 d) 36 5.How many elections took place in Turkey in the past 2 years? a) 1 b) 2 c) 4 d) 7 Sources:Turkish Statistical Instutude, www.internetworldstats.com, www.pewforum.org, www.ethnologue.com/ country/tr 3
We are the 17th largest economy in the world ~3 mio increase at last 3 years 78 mio population Area of 784K km 2 (19 times NL) 799 billion USD GDP 10.390 USD per capita GDP 10,3% unemployment rate 52% labour force participation (20 mln male, 8,7 mln female) 4-5% growth in economy in the last 30 years on average Source: Turkish Statistical Instutude & www.worldbank.org 4
Young population with a trend of smaller families 50% female 50% male 164 cm Live for 79 years 174 cm Live for 72 years 41% younger than 25 92% live in urban areas Average household size 3,6 * Married at 24 (F) & 27 (M) * Average household size is 5 in 1990, 4.5 in 2000, 4.0 in 2009, 3.6 in 2013 Source: Turkey Statistical Yearbook 2013 & 5
Low Trust, Low Penetration Difficulty in paying premiums due to personal finances (54%) 41% trust in insurance companies 76% do not own any type of insurance Social security coverage is enough (32%) 2% pension penetration 0,2% life penetration * Trustworthiness of the brand (76%) is the main factor affecting th choice of provider * In life insurance, GWP per person is 20$ which is equal to 0.2% of GDP per capita, which is far below compared to world s average (3,4%) and Europe s average(1,9%). Source: Habits & Attitudes Towards Insurance Survey 2012, Insurance Association of Turkey 6
Life expectancy is increasing The ratio of young age group decreased in the last 15 years as fertility rate went down. The ratio of older age group increased as the average life duration is longer. Source: Turkish Statistical Institude & www.worldbank.org 7
48% of people don t have savings 75% of people have personal debt Most people can barely meet their needs with their income Top 3 types of debt: Credit card (49%) Personal loan (36%) Friends & family (21%) Note: Figures in the graph represent the percentage who answered «no» Note: Figures in the graph represent the percentage who answered they have personal debt Source: ING International Survey Savings 2016 8
Bank account is the most preferred saving tool Not saving Saving in bank (deposit, gold, FX, fund) 30 45 Why?: Can only meet expenses with the income (58%) Insufficient financial situation (37%) No need for saving (23%) Paying a debt (6%) Gold or FX at home 24 Private pension 23 Real estate 11 Stock exchange 5 Source: Pension Segmentation Survey for Insurance Association of Turkey, Ipsos 2015 9
Meanwhile, Turkish pension sector is growing... 2003 Launch of New 2013 2016 Pension System (tax adv. up to 35% ) 8 2 nd version of Pension System ( state contr. 25% ) 17 3 rd version of Pension regulation ( decr. fees) 2017 4 th version of Pension regulation ( Auto Enrolment) 2023 135 (Billion Eur) Targeted AUM Source: Pension Segmentation Survey for Insurance Association of Turkey, Ipsos 2015 10
Fact : Big potential, Big opportunity Large & Young population Growth of middle class Trend to smaller families More focus on children s education Active internet community Modern Turkey big enough to offer a big potential 11
1 st Question: How insurance companies contact customers to offer their products? Finding the relevant PoS for targeted customer segments Financial Institutions Banks Consumer Finance Companies Leasing & Factoring Companies Insurance Intermediaries Tied Agents Independent Agencies Brokers New Distributors Telecomm Utilities Retailers Digital Internet Mobile 12
2 nd Question: Do we continue with traditional channels or traditional channels continue as traditional? Adaptation and quick response to changes needed Direct Sales Agencies Brokers Banks Retailers Digital Next Ne N. Customers 13
3 rd Question: How insurance companies capable to adapt distribution channels to changes? Fill in the gaps... Or find the adopted ones Financial Institutions Insurance Intermediaries Today GAP Tomorrow Skill Sets Mindset Insurance Knowlege Lean Processes Agility IT Infrastructure New Distributors Innovation Digital Don t fill the gap with Elephant!!! 14
4 th Question: How insurance companies can sustain long-lasting relationship with partners Build well defined and win-win partnership Reasons for Partnerships Displeasures 6 Basic rules to be succesfull 1 1. Orchestrating full solution 2. Access to specialist s scale efficiencies 3. Lower risk through access to alternative sources 4. Usage of unavailable resources 5. Improving value chain efficiency 6. Joint product & market development 1. Overestimate 2. Underestimate 3. Commit too long time horizon 4. Failure to properly manage partnerships aggreements 5. Stick with insular mentality 6. Lack of clear exit strategy 1. Divergent goals or no hidden agendas 2. Ad hoc partnerships waste time & and energy 3. Long-term sustainability minimizes impact of short-term behaviors 4. Setting accountability for ownership 5. Defining process for tasks and resources 6. Defining roles and responsibilities 15
4 th Question: How insurance companies can sustain long-lasting relationship with partners Building partnership with Banks as an example Bancassurance understood and important to bank Commitment and tone set from the top Strong visible leadership Consistent focus notjust flavour of the month Jointly agreed targets and basis Insurance representation on the board Inhouse and third party product provision Medium performance Simple multi-channel products agreed with bank Proposition geared for mass market ( fit or out ) Spesific development for high-net-woth individuals Effective bundling Organi zation Proposi Strateg tion ic Source Manage ment Shared services Integrated low cost model Single system Straight through processing Service Active internal and external lead generation Productivity focus End-to-end integration Offers visible Incentives / rewards balanced with bank Strong compliance focus Execution only guided and full advice Sales Face-to-face, internet, direct, telephoneintegrated solution Face-to-face representatives for wealth and business Focused sales culture Predict future segment Breakthrough propositions Simple triggers Active high volume, high quality lead generation Cross-sell and up-sell supported by core banking product incentives 2 16
NN Turkey Multi- channel approach to diversify distribution mix and customer needs Bancassurance Agencies & Brokers Joint Ventures (Since 2014) Partnerships (Since 2014) 1. w Life GWP AUM 80% Pension 40% Life GWP Pension AUM 5% 25% Life GWP Pension AUM 10% 30% Life GWP Pension AUM 5% 5% 17
NN Turkey Customers/Distribution Channells can do their own operation 7/24 Internet Mobile Call Center Sales Portal Increasing positive customer experince also led to spend less time to after sales There is a specific call center for employees of distribution channels to help their any request, As a result, Distribution channels more focus on new biz generation 18
Take aways for Todays Find the relevant PoS for targeted customer segments Adaptation and quick response to changes needed Fill in the gaps... Or find the adopted ones Build well defined and win-win partnership THANK YOU 19