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Bancassurance Survey 2015 Kenya, Lloyds Africa Markets:
- 1. Bancassurance Survey 2015 BY WATSON MACHARIA, PARTNER – LLOYDS AFRICA MARKETS
- 2. Respondents 1. Bancassurance Consumers 2. Banks 3. Insures
- 3. 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
- 4. 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.
- 5. 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
- 6. 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
- 8. Number of distribution agreements -Insurers 34% 11%33% 11% 11% 1-5 5-10 10-15 15-20 More than 20
- 9. 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
- 10. 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?
- 11. 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?
- 12. 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?
- 13. 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?
- 14. 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"
- 15. 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"
- 16. 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?
- 17. 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?
- 18. 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 following marketing methods in generating qualified bancassurance sales leads?
- 19. 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 following marketing methods in generating qualified bancassurance sales leads?
- 20. 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?
- 21. 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?
- 22. 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?
- 23. 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?
- 24. 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
- 25. 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
- 26. CONSUMERS
- 27. 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?
- 28. 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?
- 29. 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
- 30. 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?
- 31. Perception; Banks vs Insurers on New Insurance Yes 77% No 23% Would You Consider to Purchase Insurance if Sold To You By Your Bank?
- 32. Perception; Banks vs Insurers on Renewing Insurance Yes 71% No 29% Would You Prefer To Renew Your Insurance Product Via Your Bank?
- 33. 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?
- 34. Overall Perception on Banks Vs Insurers 7 5 3 12 7 8 10 8 13 29 33 31 34 22 8 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Perception towards Insurers vs Banks None Insurance Companies Banks
- 35. 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
- 36. 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.
- 37. 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