Board Level Presentation
Bancassurance Business
New Initiatives
Board Review
1
Bancassurance
Bancassurance Journey – 2012 – 2017
Total Cost
Net Revenue
Issued Business
35%
Paradigm Shift
61%
CAGR
25%
PKR
Mils
182
CAGR
32%
21
2012
491
27%
20%
CAGR
21%
1,600
1,184
734
372
CAGR
34%
CAGR
22%
386
322
Value Creation while
remaining efficient
-33%
-4%
48
2015
CAGR
8%
32
30
2016
B 2017
Insurance Partners
EFU Life
(2010)
Jubilee Life*
(2011)
IGI Life
(2012)
Pak Qatar Family Takaful
(2013)
Alfalah Insurance Company (2013)
Asia Care Life & Health
(2013)
State Life
(2014)
Jubilee Life Window Takaful*(2015)
IGI Life Window Takaful*
(2015)
*Current New business Partners (Referral Model)
Keeping Stakeholders cohesive & making partnerships work
Broader Products Pallet & Increased Focus on Trainings
- Frequent trainings and knowledge improvement
initiatives
towards need based sales
- Potential cost saving
of approx. PKR 150Mil
by 2018 with 6x
increase in sales staff
- BSMs retained for
bank oversight at
cluster level
- Additional rewards post
restriction on Conventions
-Low Premium &
Conventional Takaful
plans contributing over
PKR 270 Mil
- ADCs Products
- Optimized Debit Process
2017
- Independent Banca system (Recon Ready)
2012 - 2014
- Offering Bancassurance & Banca Takaful solutions
- Aspiring for 35% business
growth with 80% renewals
- CBC function
overhauled, moved to
CE
2015
- 1st bank to implement 100% Call Back
Confirmations (CBC)
- Wide Variety of Products – Unit Linked, Bonus
Linked, Health & Terrorism Insurance
- 1 Billion milestone
with highest industry
growth
- Move to Referral
Model with:
-JLI for RMM/CIBG
-IGIL for IBG
2016
Laying a compliant Foundation
4th Largest Player
2nd Highest Avg./Br
2
Bancassurance Industry
A Brief Outlook
2012
2013
2014
2015
Growth
2016-15
2016
CAGR
Q1-2017
H1 2017
YoY Bancassurance Business (PKR Million)
Bancassurance Industry
Bank Alfalah
Market Share
6,-%
2015
8,-%
9,-%
Growth
2016-15
2016
11,-%
14,100
1,184
8%
Avg./Branch
p.m.
FY 2016
20%
61%
20%
34%
Avg./Branch
Q1 2017
p.m.
Q1 2017
3,-%
H1 2017
6,-%
Avg./Branch
p.m.
H1 2017
Bank wise Business (PKR Million)
A
B
5,600
1,400
6,500
1,700
C
1,-
1,201
1,-
D
E
F
16%
21%
-11%
61%
-5%
-14%
325 K
115 K
76 K
157 K
230 K
135 K
1,-
319 K
140 K
115 K
142 K
91 K
108 K
3,-
325 K
122 K
101 K
130 K
89 K
98 K
Average Per Branch (p.m.)
Highest
Industry Growth
325 K
FY 2016
319 K 325 K
H1 2017
2nd Highest per Br.
Average
115 K
HBL
Q1 2017
140 K 122 K
76 K
MCB
115 K 101 K
UBL
157 K 142 K
BAFL
130 K
230 K
91 K 89 K
FBL
135 K
108 K 98 K
SBL
3
Bancassurance
Key Performance Indicators
New Business Sales
Cancelation Ratio
Total Business
3,153 CAGR
39%
2,858
BAFL Industry
4% 5-6%
1,157
1,600
-
201 4
45,376
26,113
12,188
17,568
5,865
807
201 5
3,793
201 6
B 2017
10,389
9,035
10,565
1,191
609
201 2
CAGR
33%
61,376
51,308
32,980
1,640
385
LTD Portfolio
PKR Mil
(including renewal)
Consistent growth
in New & Renewal
Portfolio
2,106
776
LTD Customers
1,055
2,198
201 2
2013
Quantum of Complaints
Complaint Ratio
201 4
201 5
201 6
2016 H-% 1.9%
MAY-17
Jun-17 B 2017
Improving both financial and qualitative indicators, leading to a more promising and sustainable business model
New Business per Branch p.m. (PKR 000)
218
2nd Year Renewal Persistency
Average Ticket Size (PKR 000)
79%
158
97
91
102
115
75
2012
86
2013
97
2014
Fostering
Sustainability
108
2015
101
100
2016
B 2017
80%
78%
76%
76%
2014
2015
72%
2012
2013
2016
B 2017
4
Bancassurance
Profit & Loss Statement
Actual
2012
Actual
2013
Actual
2014
Actual
2015
Actual
2016
Actual YTD Budget YTD Budget
Jun 2017
Jun 2017 FY 2017
Bancassurance Business (PKR Millions)
New Business Premium (Regular & Ad-hoc)
378
597
731
773
1,503
574*
800
1,600
Renewal Business Premium
224
546
864
1,299
1,667
781
748
1,553
Net Revenue*
182
269
332
322
386
128
244
491
Total Cost
21
38
53
48
32
13
15
30
Net Profit
162
231
279
274
354
115
229
460
Cost to Income Ratio
11%
14%
16%
15%
8%
10%
6%
6%
* 3-4% of BAFL NFI
*Ad-hoc: PKR 121 Mil
Aspiring to increase the contribution to Banks overall NFI
Banca Regulations & Referral Model
16%
14%
11%
15%
Reduced
Commission
60% to 40%
460
354
279
274
231
8%
Growing on a lean
cost line
6%
162
CAGR
-11%
Net Profit (PKR Millions)
Cost to Income Ratio
2012
CAGR
23%
2013
2014
2015
2016
B 2017
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
5
Bancassurance
Key Challenges & New Initiatives
Key Challenges & Mitigations
Restriction on
Convention
Trips
Restriction on overseas convention trips by the regulator
Short Campaigns
Business
Ownership by
Retail
Half of the network unproductive on MoM basis. Dependency on ASPIRe/Rewards
Clarity on core
protection
products
2nd Year
Persistency
Quarterly/Half yearly campaigns. Business reviews with key members, keeping them engaged
Sales via ADCs on hold due to call back & fact sheet requirements
Taken up with SBP via PBA Sub-committee to re-visit CPD circular 2012
Eligibility of Persistency Bonus & S&M Incentive on 80% persistency; PKR 125 Million at stake
Linking Persistency with Rewards. Implementation of Text-File based auto renewal system
New Initiatives
People &
Partnership
Rewards
Products
Process
Additional hiring of Bancassurance Sales Officers through Insurance Partners, currently ~ 500
Increased focus on trainings & knowledge initiatives
Segment wise power play campaigns; empowering the clusters
Having 3-4 shorter campaigns in a year as alternate to overseas conventions
Building in Health Insurance within Unit Linked and conventional offering, industry first
Core Protection based products from branches and ADCs
Scan based premium deductions with decentralized forwarding and issuance
Renewal deductions based on Text Files to ensure achievement of 80% persistency
Annexure
Bancassurance Referral Size
H1 2017
Referral Model Industry Size: PKR 4.8 Billion
Total Bancassurance Industry Size: PKR 6.4 Billion
Total Resources Deployed: 5,500+
New Business
PKR 3.3 Billion
No. of Branches
1,650+
Avg/Branch (p.m.)
PKR 325 K
New Business
PKR 837 Million
No. of Branches
1,350+
Avg/Branch (p.m.)
PKR 101 K
Deputed BSOs
1,525
BSO to Branch Ratio
0.9 : 1
Deputed BSOs
1,215
BSO to Branch Ratio
0.9 : 1
New Business
PKR 478 Million
75%
•
•
•
•
•
New Business
PKR 168 Million
No. of Branches
600+
Avg/Branch (p.m.)
PKR 130 K
No. of Branches
260+
Avg/Branch (p.m.)
PKR 98 K
Deputed BSOs
505
New Business
PKR 110 Million
No. of Branches
1450+
Avg/Branch (p.m.)
PKR 12k
Deputed BSOs
205
BSO to Branch Ratio
0.8 : 1
Key Players:
Jubilee Life
EFU Life
IGI Life
Adamjee Life
State Life
BSO to Branch Ratio
0.8 : 1
Deputed BSOs
740
BSO to Branch Ratio
0.5 : 1
Bancassurance
Mission Statement & Strategy Pillars
Bancassurance Business – Mission Statement
To become the leading, foremost and reliable distributor of Insurance/Takaful products for Banking customers by providing them
with a one-stop solution to all their protection and saving needs while maintaining sustainable growth
Strategy Pillars
Stakeholder
Management
Engaging staff
while managing
the Insurance
Providers (IPs)
Bridging b/w
Staff and IPs
Process
Sustainable
Growth
System based
with reduced
TATs
Harnessing all
distribution
channels,
including ADCs
Leveraging on
Insurers’
expertise
Addressing
criticality of
renewals with
new business
Cost
Customers
Controls
Capitalizing on a
cost effective
model (Referral)
Innovative
products catering
to protection
needs
Compliance with
tightening
Regulatory Regime
Maintaining an
efficient cost to
income ratio
Pre & Post sales
solutions
including Claims,
Renewals and
Grievances
CREATING OPTIMAL MIX OF BUSINESS & CONTROLS
Continuous
process and
policy
improvements