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December 2009
Reaching the Next Level
Bancassurance in China
Chris Kaye (BCG), Frankie Leung (BCG), Holger Michaelis (BCG), Chee Kok Poh (Swiss Re), Eric Schuh (Swiss Re), and Robert Wiest (Swiss Re)
Contents
Preface 1
ExecutiveSummary 2
ABriefIntroductiontoChina’sInsuranceMarket 3Overview 3Bancassurance in China—A Story of Explosive Growth 4
TheNextWaveofGrowth 5The “Many-to-Many” Model: An Imbalance of Power 5The Need for Product and Service Innovation 6The Way Forward: Integration and Exclusivity 7Regulatory Reform: A Transition Already Underway 8
SuccessfulPathwaystoaWinningBancassuranceModel 9The Opportunity 9A Win-Win Approach 9Different Models Work for Different Players 10The 10 Building Blocks of a Successful Bancassurance Model 12
ACalltoAction 15
DECEMBER 2009THE BOSTON CONSULTING GROUP • Swiss Re
Preface
China’sbancassurancemarketisgrowingatbreathtakingspeed.Atthesametime,itappearstobelockedinaparadox.BanksarealreadythedominantsaleschannelforlifeinsuranceinChina,andarepropellingthecountry’srapidgrowthinpremiumvolume.However,thebreadthandsophisticationofcurrentlyavailableproducts—aswelltheoverallqualityofcustomerservice—lagfarbehindbancassuranceactivitiesinmanyothercountries.Theresultisarapidlydeveloping,yetunusuallyunderdevelopedmarket.
Severalfactorshavecontributedtothepresentsituation.First,banksobviouslyhaveconsiderablemarketingpower inthefinancialservicesarena.Theyalsoarepermittedtosellmultiplebrandsof insurance—althoughtheyarenotyetallowedtoowninsurersoutright.Theresultingmodelisoneinwhichbanksoftensellrelativelyunsophisticatedsavings-typeproducts—offeringsthatcarryavarietyofbrandnames—inanuntargetedway.Wecallthisstructure“many-to-many.”
Why,then,don’tinsurersdevelopbetter-tailoredproductsandserviceforthebankchannel?First,thereislittleincentiveforinsurerstotrainbankingstaffsinproductdetailandadvancedsalestechniqueswhenthisexpertisewillbeused,atleastinpart,toselltheircompetitors’products.Inaddition,insurersalreadypaygenerouscommissionstobanksfor“shelfspace,”hurtingtheirownprofitabilityandabilitytoinvestininnovation.
There is,however,agrowingrecognitionthatthepresentmarketstructure isnotsustainable. Indeed,Chineseregulatorsarealreadyworkingonbancassurancereforminordertopromotebetterintegrationofbanksandinsurers.WebelievethatthisinitiativewillpushChina’smarketinthedirectionofmorematurebancassurancemarkets.Morespecifically,wearelikelytoseeaperiodofheavyinvestmentinproductdevelopment,marketing,customerservice,andplatformsynergy.Theinsurersandbanksthatareleadingthispushwillbeinapositiontobuildsignificantcompetitiveadvantageinthemarket.Theprerequisiteforsuccess,however,willbetheformingofexclusivepartnerships—ofvariousnatures—sothatinvestmentsofcapitalandknow-howcanbeprotectedandgeneratepositiveresults.
Banksandinsurersalikewillneedtothinkthroughthedifferentoptionsavailabletothem—takingtheirspecificcapitalresourcesanddistributionnetworksintoaccount—andadoptastrategythatisalignedwiththeirlong-termaspirations.Bettingontherightstrategicoptionnowandensuringbest-in-classexecutioncanresultinextraordinarybenefits.
Reaching the Next Level
Bancassurance in China
DECEMBER 2009 THE BOSTON CONSULTING GROUP • Swiss Re
Bancassurance in China2
Executive Summary
◊BancassurancehasalreadyemergedasChina’sbiggestplatformforlifeinsurancesales,yetitcurrentlyoperatesona“many-to-many”distributionmodel.Thismodelhasbeenfacilitatedbyregulationsthatallowbankstoselltheproductsofmultipleinsurerssidebyside.
◊ Inthelongrun,themany-to-manymodelisnotsustainable.SimpleanalysisofoperatingprofitssuggeststhatbancassurancedoesnotcreatesignificantvalueforinsurersinChinatoday.Ingivingbanksmoreleverageovertheinsurerswhoseproductstheysell,themany-to-manymodelfailstoincentivizeproduct,marketing,orservice innovationamonginsurers.Bankshavelittlemotivationtochangethissystembecauseitprovidesthemwithhandsomecommissions.
◊Thelackofproductdiversityandsalesknow-howresultingfromthecurrentsystemisstartingtoimpactdemandforinsuranceproductssoldthroughbanks.Withoverallpenetrationstilllow,however,bothlifeandnon-lifeinsurancepremiumsinChinashouldcontinuetogrowannuallybydoubledigits,supportedbybroadermacrotrends.Still,althoughthesizeandwealthoftherelevantbuyergroupwillcontinuetomushroom,thegrowthofbancassurerswillbeweakenediftheyareunabletotakealargershareofwalletfromincreasinglysophisticatedanddemandingcustomers.Otherinsurancedistributors,suchasagentsandbrokers,mightwinbackmarketsharesoncelosttobanks.
◊ Inordertoremaincompetitive,bancassurerswillhavetowidenandupgradetheirproduct linesandimprovetheircustomerservicemodels—inessence,givingcustomersmoreandbetterproductsinamoretargeted,service-orientedwayinordertocreatebrandloyalty.Thiswillrequiresubstantialinvestment.
◊Banksandinsurerswillalsohavetoforgemoreexclusiveandbetterintegratedpartnershipsinordertojustifytheseinvestments.Therearefourbancassurancepartnershipmodelsthat,dependingoneachparty’sneeds,haveproventobesuccessful:exclusivedistributionpartnership; jointventure;financialholdingcompany;andintegratedlineofbusiness(whichtakesanorganizationalratherthanlegal-entitypointofview).
◊Sharpexecutionofthesepartnerships—whosescopecanvaryfromregionaltonationalandfromsingle-tomulti-product—iscritical. Inparticular,partnerswillneedtofocusoninitiativesthatformthe10buildingblocksofasuccessfulbancassurancemodel:developproducts jointly;streamlineproducts;adoptageneralistsalesmodel;createmeaningfulsalestargetsandincentives;bundleproductsforlifeevents;trainrigorously;upgradeITsystems;defineorganizationalroles;bolstercustomerserviceandpost-salesupport;andensurecapitalandriskmanagement.
◊ Insum,webelievethatthemarket-sharelandgrabchapterofChina’sbancassurancesagaisnearinganend.Winning intheemergingcompetitivephasewillrequirequantumimprovements inproductinnovationandintheintegrationofmarketinganddistribution.Allofthesegoalscanbeachievedonlythroughtheintroductionofmore,deeper,more-exclusive,longer-termpartnershipsbetweenbanksandinsurers.
DECEMBER 2009THE BOSTON CONSULTING GROUP • Swiss Re
Bancassurance in China 3
A Brief Introduction to China’s Insurance Market
Overview
China’sinsuranceindustryisstillyoung—anditisbooming.Thecountry’s$108.7billioninlifeinsurancepremiumsin2008representednearlyatwelve-foldincreaseoverthe1998level.1In2010, life insurancepremiumsinChinacouldwellexceed$150billion, leavingGermany,currentlyrankedfifthworldwideintermsof lifepremiums,farbehind.China’snon-lifesector isalsopoisedforstronggrowth.Non-lifepremiums,forthefirsttime,exceeded$30billionin2008.
Inpercentageterms,China’s insurance industryhasexpandedrapidlyover thepastdecade,with lifepremiumsgrowingatabout28percentannuallyandnon-lifepremiumsincreasingatroughly20percentannually.Comparedwithotherglobalmarkets,however,penetrationasapercentageofGDPremainsrelativelylow.Forinstance,inAsia,theinsurancemarketsinMalaysia,Thailand,HongKongandTaiwanallhavehigherpenetrationrates.(SeeExhibit1.)ThisunderscoresthegrowthpotentialthatthehighlypopulousChinesemarketholds.
Thispotentialissupportedbyextremelyattractivefundamentals.Onthedemandside,overallwealthinChinaisincreasing.Household-savingsrates,ataround35percentofincome,areimpressivelyhigh.Retaildeposits,around$3.3trillionattheendof2008,representroughlyseventimesthetotalassetsofChineseinsurersand20timesthose insurers’bankdeposits. Inaddition,theChinesepopulationisageingandinvestmentoptionsinthecountryarestilllimited.
Exhibit 1. China’s Insurance Market Still Offers Tremendous Growth Potential
VietnamPhilippines
Indonesia
Japan
China
Taiwan
S.KoreaHK
Singapore Australia
New ZealandIndiaMalaysia
Thailand
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Tota
l pen
etra
tion
(in p
erce
ntag
e of
GD
P)
Developing markets
Markets with relatively low penetration
Mature markets
1,0000 4,000 5,0001,500500 4500
GDP 2008 (in USD billion)
1.AllcurrencyreferenceshavebeenconvertedtoUSData$1=RMB6.85exchangerate.
DECEMBER 2009 THE BOSTON CONSULTING GROUP • Swiss Re
Meanwhile,supplyisexpandingfast,causingrapidproliferationofnewsaleschannelsandaratchetingupofmarketingefforts.Atthesametime,regulatorshavestartedtoconsiderfinancialintegrationmoreseriously;forexample,bankshaverecentlybeenallowedtobuystakesininsurancecompanies.
Bancassurance in China—A Story of Explosive Growth
Thepracticeofsellinginsurancethroughbanks—knownasbancassurance—hasgrownataparticularlybriskpaceinChinainrecentyears.In2002,bancassurancepremiumsamountedtojust$730million.Butaftera2003insuranceregulationstipulatedthatbankswerenolongerlimitedtorepresentingjustoneinsurancefirm,premiumsstartedtoexplode,reaching$11billionin2004.In2008,Chinesebancassurerssold$52billioninlifepremiums,about48percentoftotallifepremiumsinthecountry.Today,banksandinsurersarestartingtodevelopfar-reachingstrategicmovesinthissector.
InacountryasvastanddiverseasChina, it ishardlysurprisingthatbancassurancehastakenholdsoquickly.Banks,withtensofthousandsofbranches,provideconvenientsalesplatformsthatreachintoeverycornerofeveryprovince.Throughthesebranches,insurerscanleveragethebrandreputationsofbankstogainfootholdsinnewmarkets.Also,bycooperatingwithbanks,insurersgainaccesstoavastcustomerbasewithstrongpotentialinterestininsuranceproducts—especiallythosedesignedtoreplacebankdeposits.Inaddition,settingupbancassuranceasadistributionchannelisinitiallyrelativelyinexpensiveforinsurers,especiallywhencomparedtothecostsofbuildingupandmaintainingtheirownagencies.
Thecurrentsystemalsoallowsbanks tobroadentheiroverallproductoffering,strengthencustomerloyalty,andaddmorefeestotheirotherwiseinterest-rate-dominatedrevenuemix.Indeed,bancassurancegeneratedaround$1.5billionincommissionincomeforChinesebanksin2008.
WhenitcomestothecurrentbancassurancelandscapeinChina,theinsurersidehasfairlyhighmarketconcentration.Thetoptwolifeplayers inthisarena—ChinaLifeandNewChinaLife—heldabout50percentofthemarket in2008.Thesegiants,alongwithfiveother institutions,accountedfornearly90percentofthemarketin2008.(SeeExhibit2.)
Thisisnottoimplythatthebancassurancemodelisnotprevalentamongsmallerindustryplayersaswell.Infact,mostsmallandmedium-sizedinsurancecompaniesrelyheavilyonbankchannelsandonsavings-typeproducts.Consequently, inthefirsthalfof2009,bancassurancesalesstillaccountedfornearly40percentoftotalpremiumsinChinadespiteageneraltrendtowardfewersavings-typeproducts(resultingfromtheglobaldownturnofinvestmentmarkets).
Infact,virtuallyeveryChinesebankhasbeensellinginsuranceproductsoncommissionforatleastseveralyears,somestartingasearlyas2000.Theregulatorychange in2003thatenabledbankstorepresentmultipleinsurersallowedthe“many-to-many”modeltoarise,andtheresulthasbeenajumbleofproductsandbrandsbeingofferedinbankoutlets.Forinstance,theproductsofthetoptwoinsurersaresoldbynineofthetoptenChinesebanks.Ontheflipside,thetwolargestlendersbothselltheproductsof12ofthetop15insurersinChina,includingthoseofallofthetopsixproviders.
Tofurthercomplicatethepicture,themixofinsurancebrandsofferedatanyonebanktendstodifferfromprovincetoprovince.Negotiationsoverwhichbrandstocarryoftenoccuratthebranchlevel, leadingtopotentiallyinefficient—andinsomecasesdicey—businesspracticeswhensecuringdistributiondeals.
Ultimately,althoughthemany-to-manyarrangementhaspavedthewayformomentousgrowthinthepastfewyears, ithasalsobroughttheChinesebancassurancemarkettoitscurrentimpasse.Simplyput,the
Bancassurance in China4
DECEMBER 2009THE BOSTON CONSULTING GROUP • Swiss Re
Exhibit 2. China’s Life Bancassurance Market Is Highly Concentrated
1415
33343839
140
0
50
100
150
Bn RMB
China Life New China Life
Taikang Life CPIC Life PICC1 Ping An Life Taiping Life
Gross written premiums through banks 2008
Source: China Insurance Yearbook 2009.1PICC Life and PICC Health.
Marketshare(%)
39.5 10.9 10.6 9.6 9.3 4.2 3.8
necessaryinvestmentsbytruebancassurancepartnershipsintobetterproductsandservicethatwillleadtoprofitable,sustainablegrowthinthefuturearenotyetbeingmade.
The Next Wave of Growth
The “Many-to-Many” Model: An Imbalance of Power
SimpleanalysisofoperatingprofitssuggeststhatbancassurancedoesnotcreatesignificantvalueforinsurersinChinatoday,largelybecauseofthemostlysimple,low-marginproductssoldthroughbanks.Also,insurerslackbargainingpowervis-à-visbanks—which,inturn,benefitdisproportionatelyfromthesystem.
Indeed,withinsurerscompetingagainsteachotherondistributioncommissions,banksareabletoenjoyarelativelylargesliceofthepie.Notsurprisingly,whilebancassurancepremiumsrepresentanever-largershareoftotalpremiums,operating-profitmarginsforinsurersmayactuallybefalling.Insurershavehadfewchoices,however,giventhesystem.Moreover,thosethathavenotestablishedawidemarketpresencethroughrelationshipswithdifferentbanksmayhavemissedoutonthecurrentland-grabphaseofmarketdevelopment,whichisalreadywindingdown.
These imbalancedconditionsbetween insurersandbanksmayhavespurred therapidexpansionoftheChinesebancassurancedistributionmodel,but theyhavealsohinderedthedevelopmentofmore
Bancassurance in China 5
DECEMBER 2009 THE BOSTON CONSULTING GROUP • Swiss Re
sophisticatedbancassurancemodels.Ifthisinequalityisnotatleastpartlybalanced,insurers,customers,andfinallybanksaswellwillincreasinglysufferfromaviciouscycleofsluggishproductdevelopmentandweakinnovation.Otherdistributionchannelsmightridehigheronthenextgrowthwaveifbancassurerscontinuetomisscrucialopportunitiestomeettheirclients’true,andevolvinginsuranceneeds.
The Need for Product and Service Innovation
Againstthisbackdrop,majoryetuntappedsourcesofgrowthwillbethebroadeningofproductofferings,the improvementof financialadvice,and thedevelopmentofmore (andbetter)peripheral services.Moreover, thepotential forgrowthandinnovationisobviouswhenviewingChinanexttomanyothermarkets.Forexample,thebreadthofbancassuranceproductsavailableinChinaisfarnarrowerthanthatinSpain—whichdespitebeingfarlesspopulousisoneoftheworld’smostrobustbancassurancemarkets.(SeeExhibit3.)
Mostproducts sold throughChina’sbancassuranceplatformsarebynaturesavingsproducts.A fewstandaloneprotectionproductsaresold,butvirtuallynohealthorpensioninsuranceisavailableviabanks.Similarly,Chinesebancassurersdistributeveryfewtypesofnon-lifeproducts.Thosethatareavailable—motor,property,andcreditorprotection,forexample—aresoldinminisculevolumes.What’smore,thefocus isentirelyonindividual lines.Truth is, theproductrangeofferedintheChinesebancassurancemarketisstilldwarfedbythewhitespace.
Thestoryontheservicessideissimilar.Sincethesamebankstaffsellmultipleinsurancebrands,insurershavelittleincentivetotrainthemeitherinsalesmanshiporinpost-salecustomerservice.Bothelements,
Exhibit 3. The Chinese Bancassurance Market Is Far Less Evolved Than the Spanish Market
Life (savings-oriented)
Agricultural
Loans unemployment
Fleet insurance
Individual pensions
Group life
Disability & long-term careCritical illness
Mortgages (death & disability)
Creditprotection
insurance (CPI)
Non-Life
Life & Health
Product line
Household Motor own damageMotor third party liabilityMortgage endowment
Private health
Personal accident
Life (protection-oriented)
Loans deathSimple covers (Term, PD)
ChinaSpainProduct
= Virtually unknown = Pioneer providers = More widely available = Standard o�ering
Bancassurance in China6
DECEMBER 2009THE BOSTON CONSULTING GROUP • Swiss Re
however,areessentialforpromotingmore-sophisticatedproducts.Moreover,forbankstomeaningfullyengageinpost-saleservice,theywouldhavetoreducethevarietyandchoiceofbrandnamestheyoffer,potentiallyunderminingtheperceivedcompetitivenessoftheirproductportfolio.
Anecdotally,therateofmis-sellingofproductsisfairlyhighinChina.Forinstance,lifeinsuranceplansareoftensoldasadd-onstolargerwealth-managementproductsthataredesignedbybanks.Customersoftenreceiveminimalinstructionontheinsuranceproduct,andinmanycasesdonotevenunderstandwhatitis.Thistrendhasgivenrisetocomplaintsaboutmis-soldproductsandpoorcustomerservice,leavingsomecustomerssuspiciousofbothbanksandinsurers.
For two industriesbasedontrust, this isworrying tosay the least.Yet thestatusquothatwesee inChina’sbancassurancemarketis,toalargedegree,self-perpetuating.Justastheproliferationofmore-complex, targetedproducts isheldbackbybankingstaff’s lackofproductunderstandingandunevencustomerservice,demandiscurbedby limitedconsumerawarenessand lukewarmconfidence intheproducts.
Yethere lies theopportunity.Bancassurers thatpossessboth targetedproductofferingsandaclearwayofexplainingandmarketingthemwillbeable,inessence,toteachcustomerswhattheydonotyetrealizetheyneed.Orinmoreformalterms,firstmoversinproductinnovationandinthedevelopmentofcomprehensivecustomer-supportserviceswillhaveanopportunity—possiblyagoldenopportunity—toinfluencelong-termpurchasingbehaviorandcatalyzebrandloyaltyinarelativelynascentmarket.
Ultimately,bancassurersandbancassurancepartnershipsthatcanrepositionthemselves inawaythatallowsthembothtodifferentiateandsignificantlyupgradetheirproductsandserviceswillcapturealargershareofcustomerwalletandgetaheadstartonestablishingtruecompetitiveadvantageforthefuture.
The Way Forward: Integration and Exclusivity
Ifmore-complex, sophisticatedproductsare tobe successful, theymustbe reliable—delivering tocustomersexactlywhatispromised.Makingthemthiswaywillrequiremorerigorousproduct-developmentprocessesaswellashigherdegreesof integrationandexclusivity inrelationshipsbetweeninsurersandbanks.Indeed,thecurrentlackofexclusivitygoesalongwaytowardexplainingtoday’sstatusquo.
Just lookatEuropeanbancassurancemarketscomparedto theChinesemarket.Europe ishometoadiversecastofcooperativemodels,noneofwhichresembleChina’smany-to-manymodel.Infact,manyEuropeanmarketssawtheirpenetrationpeakaround2000,atwhichpointtheengineoffurthergrowthhadtobecomemoretailored.Productofferingswerewidened,andexclusivepartnershipsbetweenbanksandinsurerswereforged.Obviously,thishasnotyetbeenthecaseinChina.
Ofcourse,exclusivepartnershipsaresustainableonlyiftheybenefitbothsides.WhilemanyinsurersinChinahavelearnedthatthebankplatformoffersthemquickaccesstoalargecustomerbaseatreasonableinitialcost,Chinesebanksmustrealize—farmorethantheyalreadyhave—thatincreasingtheirshareofwalletandbuildingcustomerloyaltyalsodependsonthegrowthoftheirtotalfinancial-servicesoffering.Insurancewillremainafast-growingsector inChina’seconomyforyearstocome.Butbancassurancepremiumswillgrowatacorrespondingpaceonly ifpenetration isnotheldbackbyafee-driven,sub-parproductandserviceoffering.IfbancassuranceistothriveandreachitspromiseinChina,banksandinsurerswillhavetoachievefurtherintegration,forgingexclusivepartnershipsthataremutuallybeneficialandthatsteertheindustryawayfromthecurrentmany-to-manymodel.
Bancassurance in China 7
DECEMBER 2009 THE BOSTON CONSULTING GROUP • Swiss Re
Regulatory Reform: A Transition Already Underway
AlthoughwhollyexclusivebancassurancepartnershipshavenotyetappearedinChina,theemergenceofsomeintegratedfinancialgroupsrepresentsastepintherightdirection.Mostofthisincipientcooperationhascomeaboutthroughregulatoryreformcreatedbythetworelevantgovernmentbodies—theChinaInsuranceRegulatoryCommission(CIRC)andChinaBankingRegulatoryCommission(CBRC).
Ingeneral,bothagenciesaimtofosterhealthy,stablegrowthoftheinsuranceandbankingsectors,aswellasprotectconsumersfromunfairandunsavorybusinesspractices.Bydevelopingaregulatoryregimethatpromotesgreater integrationandexclusivitybetweenbanksand insurers,CIRCandCBRCwillenablegreaterinvestmentinproductdevelopmentandservicequalitywhilesimultaneouslyallowingforreasonableprofitmargins.BancassuranceisalreadythebiggestchannelforinsurancesalesinChina,andmuchisridingonitsfuturesuccess—bothforindustryparticipantsandforconsumers.
Thusfar,thepaceofreformhasbeengradual.SincetheChinesegovernmentfirstofficiallypermittedbankstooperateasmultipleinsuranceagentsin2003—galvanizingthemany-to-manydistributionmodel—ithasquicklyyetcautiouslyintroducednewpoliciesthatenabledeeperintegrationbetweenbanksandinsurers.
Oneof thestandardapproaches to integration iscross-shareholdings. InSeptember2006,CIRCfirstpermittedinsurancecompaniestoinvestinlocalcommercialbanks,settinginmotionawaveofactivity.Then,inJanuary2008,adraftregulationwascirculatedbyCBRCthatwouldgrantbankspermissiontostart insurancebusinessesbyacquiringstakes in insurancecompanies.Thepracticaldetailsofexactlyhowthiswouldworkremainedunclearat first,but later informationprovideddetailsaboutapilotprograminwhichfourChinesebankswouldacquirestakesinexistinginsurancecompanies.Thepresssubsequentlyreportedon furtherdecisions involvingCIRC,CBRC,andtheStateCouncil,aswellasonseveralanticipateddeals involvingtheaforementionedpilotbanksaswellasotherplayers. In lateNovember2009,CBRCfinallyissuedthelong-awaitedrulesgoverningcommercialbanks’investmentsintoinsurers.Nonetheless,bankshavenotyetbeenallowedtoopentheirowninsurancebusinesses,althoughgovernmentsourcessaythatrelevantpoliciesareintheworks.
Incrementalregulatoryreformofdistributionchannelsandproducttypesisunderwayaswellin2009.Forexample,CIRChasaskedinsurerstocontrolvolumesandadjustthetypesofproductsoldthroughbanks.Thisstipulationispartlytheresultofsomeinstancesofmisrepresentationofunit-linkedproducts—aswellasofthecomparativelylowembeddedvalueofproductscurrentlysoldthroughthebancassurancechannel. Inaddition,CIRCnowrequiresbankstosetupanaptnessassessmentsystemforcustomersbuyingunit-linkedinsuranceproducts.Suchproductsmustbesoldindesignatedareasinsideabankingoutlet,andhandledonlybyspecializedsalespeople. Inaneffort toavoidmisinformation inproductpromotions,anycross-sellingofunit-linkedinsuranceproductsinbanks’wealthmanagementdivisionsisnolongerallowed.
CIRCandindustrybodiessuchastheChinaInsuranceIndustryAssociationhavealsoputmoreemphasisonriskmanagementrecently,andseemtobecommittedtofosteringhealthierbancassuranceeconomicsoverall,partlyasareaction to fiercepricecompetition.Back in2006, theChina Insurance IndustryAssociationfirstpioneeredthedevelopmentofaself-disciplineagreementforbancassurance,whichsetceilingsoncommissionratespaidbyinsurerstobanks,bytypeofproduct.
Bancassurance in China8
DECEMBER 2009THE BOSTON CONSULTING GROUP • Swiss Re
Successful Pathways to a Winning Bancassurance Model
The Opportunity
Amovetowardgreaterintegrationandexclusivityamongbanksandinsurersisinlinewithgoodbusinesspracticeaswellaswithregulatoryagendas.WebelievethatChinawillsoonundergoatransitionperiodinwhichmajorplayersmovestronglyinthisdirection,leavingbehindthecurrentlydominantmany-to-manymodel.
Theexactshapethatpartnershipstakewilldependlargelyonthespecificplayersinvolved.Eachcompany’sexpansionstrategy,organizationalstructure,riskappetite,andcapitalrequirementswilldeterminewhichtypeofarrangementisbest.TaketwoestablishedexamplesinHongKong.StandardCharteredhaselectednottoownaninsurancecompanyoutright,insteadforgingastrategicpartnershipwithPrudential,theU.K.insurer.TheaccordallowsStandardCharteredtoreceivepurefeeandcommissionincomewithminimalcapital investment.HSBC,ontheotherhand,createditsowninsuranceentityandatotally integratedlineofinsuranceproducts,whichareexclusivetoHSBC.WhilethismodelprovidesHSBCwithadditionalrevenuestreams,thebankhasalsohadtomakeasignificantlyhighercapitalcommitment.
Suchstructurescanalsoworkonaregionalscale,orfocusonasingleproductorproductsubgroup.Forinstance,anexclusivedistributionpartnershipcouldbeforgedsolelyforseveralbranchesorregionswithinamuchlargernetworkorforaspecificproducttypeonacountry-widebasis.Abankcouldalsointegrateacustom-designed insurance jointventure into its systems. Inessence, the integrationof insurancebusinesses intoabankingsaleschanneloffersupmyriadopportunities forpartnerships thatcanbetailoredtoeachplayer’sparticularstrategy.
A Win-Win Approach
Banks: What they stand to gain
Whyshouldbanksalterasystemthatpaysthemsohandsomely incommissions?Aswehavealludedto,banksthatestablishexclusivepartnershipswith insurerswillbebetterpositionedtokeepa largershareoftheircustomers’wallets inthefuture.Furthermore,webelievethatfuturegrowthinChina’sbancassurancesectorwillnotcomeaseasilyasithasinthepast,andthatcontinuedsuccesswillrequiremore innovation.Banks,byprovidingbetter service to theircustomersandofferingmore targetedinsuranceproducts,candramaticallyincreasecross-sellingpotentialandfeerevenues,earningattractivemarginsfromawholenewrangeofproducts.Inaddition,withoverallpenetrationofinsuranceproductsinChinastillatarelativelylowlevel,thereissignificantroomforbankstoparticipateinhighervalue-addedpartsoftheinsurancevaluechainwithoutdirectlycompetingwithincumbents.
Some international insurershave theexperienceandcapabilities fromseveralmarkets tomakeanintegrated,exclusivebancassurancemodelwork,particularlywithrespecttosetup,productdesign,go-to-marketapproach,operations,backofficeandPOSsystems,and,ofcourse,capitalandriskmanagement.Thisisaso-farwidelyuntappedsourceofvalueforChina’sbanks.
Insurers: What they stand to gain
For insurers,buildingmore-exclusive,better-integratedrelationshipswithbanksrepresents farmorethanjustachancetocapitalizefurtheronChina’sstronggrowthinbancassurancepremiums.Therealopportunityistosolidifybrandreputationandcustomerloyaltyatatimewhenmostconsumersarestilluncommitted,overallinsurancepenetrationisstillshallow,andcompetitorofferingsarestilllimited.But
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DECEMBER 2009 THE BOSTON CONSULTING GROUP • Swiss Re
successwillrequiresubstantialinvestmentbothincapitalandhumanresources.Insurersmustthereforegainalargersliceofthepiethanthecurrentsystemaffordsthem.
Aswehavementioned,bankbranchnetworkscanprovideveryattractivemarketaccesstoinsurers.Thisisespeciallytrueinprovinceswhereinsurancepenetrationislowrelativetothebankinginfrastructure.Foreignplayers,especially,tendtolagbehindlocalplayersbothintermsofsalesnetworksandlicensecoverage.Someforeignplayershavesufferedmarketsharelossesduringtherecentrapidexpansioninbanassurancechannels—growththathasdisproportionatelybenefited localplayersgiventheir largergeographiccoverage.Joiningforceswithalocalbankmayalsohelpinsurersspeedupthelicensingprocessinnewareas.
Different Models Work for Different Players
Ofcourse,banksand insurersmustchoosethemodels thatmakethemostsensegiventheirspecificresourcesandstrategicobjectives.Wehaveobservedfourdifferentmodelswhich,dependingontheexactcontext,haveproventobesuccessfulacrossmarkets:
◊exclusivedistributionpartnership
◊ jointventure
◊financialholdingcompany
◊ integratedlineofbusiness
Exclusive distribution partnership. In thismodel, thebankand insurancecompanyagree to totalexclusivity,either inonedirectionorboth.This typeofagreementallowsbothcompaniestobroadenthespectrumof theirofferingsand leverageeachother’sbrandreputationsandexpertise inproductdevelopmentandsales.Itrequiresonlyasmuchinitial investment—insetupcostsforsalesoutlets, IT,training,etc.—asthepartnersneedinordertolaunchtheireffortsatthesametime.
This typeofpartnership canbe reinforcedbya cross-shareholding structure.However, since thebankearnsonlyadistributionmargin, insurersmustofferbanks incentives to sellaproduct thatwill complement—orpotentiallyevencompetewith—otherbankingproducts.Thismodel is idealforbanks thatopt fora lowcapital commitment in their insuranceoffering, since relatively smallinitial investmentsare required.Awidevarietyofpilotprogramsarepossibleunder this typeofarrangement.
Ultimately,anexclusivedistributionpartnershipfostersgreaterfocusandcooperationbetweenthebankandtheinsurer,andenablesamoreprofessionalizedandeffectivesalesforce.Theaccordallowsinsurerstoreachbanks’existingcustomerbasesaswellasfully leveragebankingsaleschannelsgoingforward.Inturn,thebankcanutilizetheinsurer’sexpertiseinproductdevelopmentandsalesstrategy.Also,thearrangementcanbelaunchedwitharelativelyshortramp-upperiodsincelimitedoperationalintegrationisnecessary.What’smore,thepartnershipcanbeusedasaviablelong-termstrategyifthecontractlengthissufficientandifthemutualcommitmentdeepens.
Inpractice,exclusivedistributionpartnershipsworkbestwhenbanksandinsurerscoordinatetheirsalesapproach.Thereferralprocesscanbetailoredtosuitcapacityandneeds,andcanincludesolutionssuchas
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DECEMBER 2009THE BOSTON CONSULTING GROUP • Swiss Re
specializedcallcenters.Ingeneral,financial-servicesmanagersfromtheinsurancesidecollaboratewithbankbranchagentstoexplaininsuranceproductstocustomersalongsidebankproducts.
Prudential’sexclusivepartnershipwithStandardCharteredinHongKongisagoodexample.Underthearrangement,whichhasbeeninplaceformorethanadecade,PrudentialassignsmanagerstoStandardChartered’sbranches.Thesemanagersoffer insuranceandfinancial-planningadvicetocustomers,aswellasprovidetrainingtothebank’sstaffonhowtosellPrudential’sproducts.ThemodelhasbeensosuccessfulthatthepartnershiphasbeenexpandedtomanyotherAsianmarkets.
Joint venture.Toformajointventure,abankandaninsurersetupaseparatelegalentitytoleveragethemanufacturingcapabilitiesoftheinsurerandthedistributioncapabilitiesofthebank.Thistypeofaccordtypicallyrequiresa longer investmenthorizonthanexclusivepartnerships,andallowsthetwopartiestosharecapitalcommitment—sometimesallowingonepartytotakefullcontrolinthefuture.Theestablishmentofarevenuedistributionmechanismthroughsharepercentagecangivebanksadegreeofflexibilityinadjustingcommissionfees.
Onesuccessfulexampleofthejoint-venturemodelinAsiaisCIMBAviva,forgedbyAvivaandCIMBBank,thesecond-largestfinancialservicesproviderinMalaysia.AkeyelementofsuccessforthisventureisthatAvivasharesitsinsuranceexpertisebytransferringhighly-experiencedseniorexecutivestothenewentity,whileCIMBoffersitslargebranchnetworkforexclusivebancassurancedistribution.
Financial holding company.Thefinancialholdingcompany(FHC)model involvesasinglelegalentitywithseparateinsuranceandbankingsubsidiaries,whichmayormaynotbewhollyowned.Thisstructureallows thebalancingofdifferent financial-servicesbusiness lines,withsynergies, risk sharing,andcapitalmanagementattheholdingcompanylevel.Themodeloffersapowerfulresponsetoheightenedmarketcompetition,allowingrapidexpansionthroughaggressiveM&Aandtheflexibilitytoinvestinordivestbusinesses.Exclusiveandintegratedpartnershipsbetweengroupcompaniesarerelativelyeasytoestablishandcustomize.Whenexecutedwell,thefinancialholdingcompanymodelcankeepproductivityparticularlyhigh.
InTaiwan,mostmajorfinancialinstitutionsareorganizedassubsidiariesunderanFHC.AprimeexampleisFubonFHC,whichholdsTaipeiFubonBank,FubonInsurance,andFubonLife.Byseparating itscompanies,FubonFHCisabletoleveragesynergiesviathebancassurancemodelwhilestillmaintainingindependentoperationofeachunit.Thisisanorganizationalfeaturethat, inChina’scurrentregulatoryenvironment,wouldrepresentasignificantadvantage.
Integrated line of business. Inthismodel—basedoninternalorganizationratherthanlegalintegration—thebanksetsupanewlineofbusinessforinsurance.Thiscanbedoneorganicallyorbyacquisition,muchinthesamewayabankmightsetupanynewlineofbusiness.Thismodelprovidesmaximumstrategicandoperationalcontroltothebank,allowingittolookatinsurancefromtheperspectiveofthefullvaluechain—includingbothproductionmarginanddistributionmargin.Internalcompetitionisminimizedandeachbusinesslinefocusesonitscorecompetenceinawaythatisdifficulttoachievethroughanyothermodel.Also,aligningdifferentbusinessunitsunderthesamecorporatebusinessstrategy,governanceframework,andmanagementsystemcanenhancesynergiesbothonthecostandrevenuesides.
Whatismore,thismodelmaximizescorporatebrandingopportunities.Theincentivestosellinsurancearegreaterthaninadistributionagreement,andthebankcanbenefitfromtakingacomprehensive“lifetimevalue”viewofitscustomers.
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One of the best examples is HSBC’s success in Hong Kong, where it has developed an in-housebancassurancebusinessandsetupHSBCLifeandHSBCInsurance.HSBChasalmostfullypenetrateditsdepositbaseinsellinginsurance,allowingittogainmarketsharerapidly.ItisnowtheleadinginsurerinHongKongintermsofnewbusinessgenerated.TheintegratedlineofbusinessmodelallowsHSBCtomaximizeitsshareofthecustomerwalletthroughatargeted,highly-differentiatedproductline.Ontheoperationsside,HSBCinHongKongdoesnothingbutbancassuranceandhasnosaleschannelswithtiedagents—eliminatinganyconflictsofinterest.
Finally,itisworthnotingthatofcoursenotallplayersaresuitedfortheintegratedlineofbusinessmodel,oreventhefinancialholdingcompanymodel.Whiletheaboveexamplesarewidelyrecognizedassuccessful,manyotherattemptshavebeenlessso.Someoftheseinitiativeshavealreadyledtodivestitures,andothersarestillintheprocessofsplittingup,mostnotablyinEurope.Whiletherootcausesofeachcasemaybedifferent,thereisawideconsensusthatmanagementcapabilitiesforbanksandinsurancecompaniesdiffermarkedly,andthatcombiningbothinonecorporationcanleadtoconsiderablechallengesandcomplexities.
The 10 Building Blocks of a Successful Bancassurance Model
SucceedingatbancassuranceinChinainvolvesmorethanjustchoosingtheoptimalmodel.Italsoinvolvesexcellingattheeverydaynutsandboltsofthebusiness.Inourview,therearetencriticalbuildingblockstosuccessthatrequireflawlessexecution.Let’sexplorethem.(SeeExhibit4.)
Develop products jointly. Ofcourse,therearemanywaystocombineexpertiseandtalentfrombothsidesofthepartnershiptocreatecompellingbancassuranceproducts.Inourexperience,agenuinelyjointeffortbetweenthebankandtheinsurerworksbest.
Forexample,asoundjointeffortmightstartwithmonthlymeetingsinwhichmarketingmanagersfromthebank’skeyproductlines—transactionbanking,credit,savingsandinvestment,andinsurance,forexample—gatherwithrepresentativesoftheinsurancecompanytodiscussnewproductideas.Then,inquarterlystrategycommittees,insuranceproduct-linemanagerscouldpresenttheirideastobankmanagers,whocouldthendecidewhichideastodevelopfurther.Fromthatpointon,jointproductdevelopmentteamscouldworkontheselectedideas.Meetingstructuresandformatscanvary,ofcourse.Butthegoalistosetuplastingforumsthatfosterthecross-pollinationofideasamongrepresentativesofbothsidesofthepartnership.
Streamline products.GiventhelimitedofferingsavailableinChinatoday,bancassurerswillhavemultifariouswaystodifferentiatethemselves.Forthemassmarket,however,strategiesthatconcentrateondevelopingalineofsimple,highly-targetedproductswithinseveralproductsegmentswilllikelybemetwiththemostsuccess.
RoyalBankofScotland’sstrategyintheUnitedKingdomisagoodexample.RBSoffersonly10productsviaitsbancassuranceplatform—threeinlifeinsurance,andseveninnon-life(propertyandmotorinsurance).Thisfocused,streamlinedapproachallowsRBStooptimizeproductdesignandenhanceservicequality.
Affluentcustomersegmentshavemorediverseandsophisticatedneedsthatrequiremore-complexproductsandhencecallforsalesstaffwithhigherqualificationsandamoreindividualizedsalesprocess.Largercontractvaluescanjustifytheresultinghighercostbaseandgeneratesomeveryattractivereturns.
Adopt a generalist sales model. Besidesofferingtherightproducts,establishingtherightsalesapproachcanmakeatremendousdifference.Therearetypicallythreebasicsalesmodels,definedbyhowtheyallocatethethreestepsofasalestransaction:needrecognition,clientadvice,andcontractclosure.
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Exhibit 4. There Are 10 Building Blocks to a Successful Bancassurance Model
“What” “Who” “How”
Bancassurancesuccess
Bancassurance foundation
Products Sales management Sales processes
Develop products jointly
Streamline products
1
2
Adopt a generalist sales model
Create meaningful sales targets
and incentives
3
4
Bundle products for life events
Train rigorously
5
6
Upgrade IT systems
7Define
organizationalroles
8Bolster customer service and post-
sale support
9
Bancassurance success
Source: BCG experience.
Ensure capital and risk management
10
Inthe“generalist”model,allthreestepsareinthehandsofbankstaffpeopleinthebranch.Inthe“referral”model,bankstaffdirectscustomerstoin-branchinsuranceagentsafteridentifyingacustomerneed.Thethird,“specialist”modelrequiresjointneed-recognitionbybankstaffandbyanin-branchinsurancespecialist,whothenoverseescompletionofthesale.
Allthreemodelsareworkable.Yetourresearchindicatesthatthegeneralistapproach,inwhichbankstaffistrainedtosellavarietyofinsuranceproductsinadditiontobankproducts,tendstobethemosteffective.
Create meaningful sales targets and incentives. Meaningfultargetsandincentivesarecriticaltobuildinganeffectivesalesforce.Althoughvariousstrategiescanbeviable,ourexperienceworkingwithindustryparticipantsdemonstratesthatthebestwaytoboostproductivityusuallyinvolvessomecombinationofvariablecompensationforagentsandspecialrewardsforteamsuccess.Variablecompensationstructurescanbeusedtocreateadditionalsalesincentives,buildingfromabasecommission.Specialrewards,ontheotherhand,mightfocusongroupeffort,thusencouragingcooperation.Thecombinationoftheseelementsiscrucialforcreatingincentivesthatwillmotivateeverybankstafferandinsuranceagenttoattainaggressivesalesgoals.
Bundle products for life events. Offeringproductcombinations linkedtospecific lifeeventscan liftbancassurancesalessignificantly.ProjectworkcarriedoutbyTheBostonConsultingGroupinEuropehasshownthatconversionratesforevent-drivenproductcombinations—whichcanrelatetothecustomer’sfirstjob,marriage,relocation,andretirement,forexample—canreachbetween15and25percent,comparedwith2to3percentfordirectmarketingand3to10percentforgeneralproductofferingswithfollow-upcalls.
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Train rigorously. Regular,comprehensive training is,naturally,avitalpartofbuildingasuccessfulbancassurancebusiness.Trainingisparticularly importantwhentheintegrationofbanksandinsurersbeginstodeepen.Thelevelofcoachingbothonthedetailsofinsuranceproductsandonsalesprocessesshouldbetailoredtothedegreeofexperienceofeachtrainee.
Upgrade IT systems. Theintegrationoffront-andback-officeITsystemsisanotherimportantelementofaneffectivebancassurancestrategy.Thefront-officesystemshouldfeatureguidelinesfordialoguewithcustomersandforefficientdataentry.Theback-officesystemmusthavehighprocessingefficiencyfeaturing fullyautomaticandpaperlessdataexchange,onlineunderwriting,andcommondatabasemanagementbetweenthebankandtheinsurer.
Define organizational roles. Theorganizationofanybancassurancepartnershipwilldependinpartonexistingmanagerialstructures.Withinthisframework,ahierarchyofrolesshouldbeclearlydefinedforagendasetting,coordination,andexecution.Evenmoreimportant,thebankandinsurershouldeachhaveparallelhierarchies inordertobalanceprioritiesandensurethebestpossible integrationateachoperationallevel.
Bolster customer service and post-sale support. Top-flightcustomerservicemustbedrivenjointlybythebankandtheinsurer.Thisrequiresthecoordinatedassignmentofspecificdutiestobankstaff,in-branchinsurancestaff,out-of-branchinsuranceagentsassignedtoagivenbranch,andcallcentersdedicatedtopost-salesupport.Selectiveuseofthird-partyadministratorscanbeconsidered,particularlywhenitcomestolinesofbusinessthatgeneratecomparativelycomplexclaims.Obviously,claimsprocessesmustbecarefullymanaged,asfailuretodosohasledtosomestrategicreadjustmentsforbancassurersinthepast.
Ensure capital and risk management. Abancassurancebusinesscanneversimplybeaself-financing“add-on”forthebank.Underwritingandassuminginsurancerisk,especiallyoverthelongterm,requiresadditionalcapitalupfrontandongoingriskmanagement.Thelatteroftenincludesthetransferofcertainriskstoareinsurer.
Regardingcapitalmanagement,whenbancassurancepartnershipsareexclusiveandstable,thebusinesscangrowrapidly. In suchcases, insurance-driven solvencycapital requirementswill increase justasrapidly for thebancassurer,andmaystrainaccountingprofitabilityaswell.Breakingevenonaninsuranceinvestmentcanthereforeappeartotakelongerforabankthanoriginallyanticipatedbyseniormanagementandinvestors.Also,insurancecapitalrequirementsprescribedbyregulatoryauthoritiescanbehigheroratleastdifferentfromthosecalculatedbythebank’sin-housemodels,requiringthebanktomakenecessaryadjustments.
Theobvioussolutionstocapitalduress involve issuingdebtorequity—orusingreinsurancesincethetransferofpremiumsandrisktoareinsurertypicallyresultsinloweredsolvencycapitalrequirementsforthebancassurer.Alloftheseoptionssecureorfreeupfundsthatcanbereinvestedelsewhereinbankingorusedtogrowthebancassurancebusinessevenfaster.
Asidefromitsusesinstandardriskandcapitalmanagement,reinsurancecanalsohelpbyofferingtailoredcoreandauxiliaryserviceacrossthebancassurancevaluechain—including,inmanycases,cooperationonproductdesign,underwritingmanuals,standardprotocols,training,provisionofITsystems,andthelike.
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A Call to Action
If thecurrentstatusquoinChina’sbancassuranceindustryremainsunchangedformuchlonger,saleswillhitawallofsorts.Theprevalentmany-to-manymodelwillhamperfuturedevelopment.Already,thedemandforsophisticatedinsuranceproducts—stokedbytheforceandspeedofChina’smacroeconomicevolution—isbeingcloggedbytheimpassebetweenbanksandinsurers.Cutthroatandmono-directionalpricecompetitionwillnotfosterinnovationorraisecustomerawareness.Partnersthatintegrate,becomemoreexclusive,andinvestinthequalityoftheirproductsandservicesnowwillhaveagoldenopportunitytoestablishcompetitiveadvantage.
Indeed,banksthatdevelopexclusivepartnershipswithinsurerswillbeabletobettermeettheircustomers’currentandfutureneeds,increasecross-sellingandfeerevenues,andperhapsaddapotentiallyattractivemarginfromthelifeinsurancebusinessitself.Forinsurers,buildingsuchrelationshipswillallowthemnotonlytomaintainthepremiumgrowthwehaveseensofar,butalsotoshowcaseandsolidifytheirbrandswhilecustomerconsciousnessand loyalty isstillunderdeveloped,while thegeographicreachofmostbancassurersisstilllimited,andwhilemostcompetitorproductofferingsarestillrudimentary.
Playersmustchooseamongthefourbasicmodelsofmore-exclusiveandintegratedcollaborationbetweeninsurersandbanks.Thesizeandcapitalbaseoftheplayers,thedegreeofcontrolthateachcomesawaywith,andtheoveralleconomicsofeachdealwillstronglyinfluencetheirchoiceofpartners.Tobesure,therewilllikelybemanyregionalandproduct-specificcustomizationsofthesebasicmodels.Thedevil,asalways,willbeinthedetailsofexecution.Companiesthatbothmaketherightstrategicchoicesandthatexcel inswift implementationofamoreadvancedandcustomercentricbancassurancemodelwillfindthemselveswieldingconsiderablepowerinChina’sopportunity-richfinancialservicesmarket.
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About the Authors
TheBostonConsultingGroup’s(BCG)officesinChinaandSwissRe’sofficesinChinahaveworkedtogetherover the last fewmonths toproduce thisWhitePaper. Ifyouare interested inobtainingadditionalinformation,pleasecontactBCG’sorSwissRe’sBeijingoffice.
BCG15/F.,EastTower,TwinTowers,B-12JianGuoMenWaiAvenue,ChaoyangDistrictBeijing100022,China+861085279000greaterchina.mkt@bcg.comwww.bcg.comwww.bcg.com.cn
ChrisKaye isapartnerandmanagingdirectorintheHongKongoffice.
Frankie LeungisapartnerandmanagingdirectorintheHongKongoffice.
Dr. HolgerMichaelis isapartnerandmanagingdirectorintheBeijingoffice.
SwissRe23/F.,EastTower,TwinTowers,B-12JianGuoMenWaiAvenue,ChaoyangDistrictBeijing100022,[email protected]://www.swissre.com
Chee Kok PohisaDirectorandheadofLife&HealthChina.
Eric SchuhisaDirectorandheadofBusinessDevelopmentChina.
Robert WiestisaMemberofExecutiveTeamandManagingDirectorforChina.
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TheBostonConsultingGroup(BCG) isaglobalmanagementconsultingfirmandtheworld’s leadingadvisoronbusinessstrategy.Wepartnerwithclients inallsectorsandregionstoidentifytheirhighestvalueopportunities,addresstheirmostcriticalchallenges,andtransformtheirbusinesses.Ourcustomizedapproachcombinesdeepinsight intothedynamicsofcompaniesandmarketswithclosecollaborationatall levelsof theclientorganization.Thisensures thatourclientsachievesustainablecompetitiveadvantage,buildmorecapableorganizations,andsecurelastingresults.Foundedin1963,BCGisaprivatecompanywith66officesin38countries.Formoreinformation,pleasevisitwww.bcg.com.
Founded in1863 inZurich,Switzerland,SwissRe is renowned for its commitment toexcellence insecurity,solutionsandserviceandhasaproud146-yearhistoryofdeliveringforcustomers.SwissReoffers traditionalreinsuranceproductsandrelatedservices forpropertyandcasualty,aswellas thelifeandhealthbusiness.Thesearecomplementedbyinsurance-basedcorporatefinancesolutionsandsupplementaryservicesforcomprehensiveriskmanagement.
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Havingestablisheditsfirstphysicaloperationsintheregionin1956,thecompanyhasofficesinanumberofAsiancountries, includingJapan,Korea,Singapore,China,IndiaandAustralia.Thecompany’sAsiaDivisionheadquartersisinHongKong.
SwissRewasamongthefirst foreignreinsurerstoenterChinaafterthecountrygraduallyopeneditsinsurancemarket.SwissResetuprepresentativeoffices inBeijingandShanghai in1996and1997respectively,andopeneditsBeijingbranchonDecember19,2003toconduct lifeandnon-lifebusinessthroughoutthecountry.
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