• Home
  • COVID-19
  • Life
  • Critical illness
  • Income protection
  • Health
  • Employee benefits
  • Regulation
  • Diversity
  • Mental health
  • Events
  • Industry Voice
  • Newsletters
  • Sign in
  •  
    •  

      Personalise your on site experience.


      Download and use the apps.


      Access your subscription from outside of the office.


      Get relevant news and insight straight to your inbox.

      • Sign in
     
      • Account details
      • Contact support
      • Sign out
     
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • YouTube
    • Instagram
  • Register
  • Events
    • Upcoming events
      event logo
      Mental Health & Wellbeing 360
      • Date: 25 Mar 2021
      • Digital Conference,
      View all events
      Follow our events

      Sign up to receive email alerts about our events

      Sign up

  • Industry Voice
Cover Magazine
Cover Magazine
  • Home
  • COVID-19
  • Life
  • Critical illness
  • Income protection
  • Health
  • Employee benefits
  • Regulation
  • Diversity
  • Mental health
 
  •  

    Personalise your on site experience.


    Download and use the apps.


    Access your subscription from outside of the office.


    Get relevant news and insight straight to your inbox.

    • Sign in
 
    • Account details
    • Contact support
    • Sign out
 
  • uncategorised

Around the world: Turkish Bancassurance

  • Greg Becker
  • 08 June 2011
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
0 Comments

The rise of bank-based distribution for many long-term insurance products led to the term ‘bancassurance'. But is bancassurance distribution ready for a rethink? Greg Becker investigates

Many have seen the obvious synergies between banking and insurance, and the potential for banks to become distributors of insurance products.

People interact with banks at key milestones in their life: for example, after a marriage, when a name is changed, a joint account is set up or when a house is being purchased.

Related articles

  • How is Covid impacting mental wellbeing?
  • COVER Webinar this Monday… Who are our speakers?
  • Stephen Crosbie: Getting back to business
  • The 'big five' benefits trends for 2021

At these milestones, a person’s insurance need may change, and a needs-driven sales opportunity arises.

Banks have different ways of monetising this lead: some by selling other firms’ products, some brand and sell a white-labelled product from a product provider, and others manufacture their own product range internally.

While banks have changed their distribution and product strategies since first launching insurance products, one thing has remained constant: their desire to maximize their share of the customer wallet.

On-sell and up-sell are almost certainly viable business strategies for financial services firms: the marginal cost of this form of distribution is often substantially cheaper due to reduced administration and distribution costs.

Firms can build targeted selling onto this, and can thus improve the customer profile, which can have important implications for insurance products where risk cost varies materially. UK banks invite us to purchase additional products at almost every opportunity:

■ The brochure stuffed into the letter from the bank

■ The ‘click here to buy’ on their internet banking homepage

■ The ‘call back to activate the card’ process that leads to a call-centre based tele-sales opportunity, or

■ The proactive bank teller who invites you to talk to a customer services person at every opportunity.

SHEDDING LIGHT ON A TURKISH DELIGHT

Many have learnt to decline these invitations as they are generally preceded by a wait, and the advice has been of questionable quality. Yet they do not approach us where we most frequently interact with the bank: the ATM.

Many middle aged, middle class and middle income people in the UK avoid bank branches, but use banking services regularly – ­branchless banking services.

People increasingly use the internet to view their latest account balance and to transfer money, while they use ATMs to withdraw cash.

This is good news for bankers as the costs of ­branchless transactions is significantly less than that of branch-based transactions.

However, it is bad news for insurance sales if potential customers are not being propositioned.

Garanti is a financial services company with Turkish origins. It describes “alternative distribution channels” as being one of its core competencies.

It has a focus on technological innovation and distribution, and this focus has led to a position where its Paramatiks (or ATMs) are able to serve more than 140 different products.

More than half of all Paramatik or ATM ­transactions do not involve cash withdrawals, and more than 250,000 banking products were sold through Paramatiks in 2010 alone.

Garanti has been the first in the Turkish sector to sell insurance via Paramatiks, and has sold nearly 400,000 insurance products in the past three years.

The group has innovated at every stage of the customer journey to make it as quick and painless as possible.

For example, by interacting through the Paramatik/ATM, and regarding the users’ PIN as a signature substitute, the need for a wet signature is avoided. Garanti currently sells life insurance through push offers on Paramatiks, known as Garanti’li Yarinlar.

It has also reworked the underwriting and sales process as such that customers can buy a simple five-­diseases CI cover by completing only two additional Paramatik/ATM screens.

There surely cannot be a less burdensome insurance product sales journey – and it is certainly faster than the journey that many of us last followed, which involved a 30-minute wait in the bank branch reception.

While this development may or may not be transferable to the UK, it is worth considering what can we do to improve the customer journey.  

Greg Becker is product development actuary at RGA

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • uncategorised
  • RGA
  • Around the world
  • Bancassurers
  • reinsurance

More on uncategorised

WATCH: COVER Excellence Awards Afterparty DJ Live Stream w/ Waxwork

Get that Friday feeling!

  • uncategorised
  • 13 November 2020
Planet Insurance - Is anger the cost of a GP report?

The news that the ABI and British Medical Association (BMA) agreement on GP report (GPR) fees has broken down will usher in a period of uncertainty.

  • uncategorised
  • 07 February 2012
Call for UK innovation investment as RGA wins in the US

Lack of innovation investment in the UK insurance market has been highlighted by recognition of RGA's work in the US.

  • uncategorised
  • 23 January 2012
Protection 2012 - Facing the future

Protection business in 2012 and 2013 will be affected by events this year and some fundamental changes to the way customers policies are priced into the next. Richard Verdin explains.

  • uncategorised
  • 20 January 2012
EAPs - The pursuit of happiness

Employee assistance programmes are in the spotlight due to a schizophrenic approach by government. But as Sue Weir points out, they are backed by solid research.

  • uncategorised
  • 20 January 2012
blog comments powered by Disqus
Back to Top

Most read

Johnny Timpson to leave Scottish Widows
Johnny Timpson to leave Scottish Widows
MetLife launches simplified income protection policy
MetLife launches simplified income protection policy
Richard Kateley to retire from Legal & General
Richard Kateley to retire from Legal & General
Supreme Court 'substantially' rules in favour of BI claimants
Supreme Court 'substantially' rules in favour of BI claimants
Protection: Four opportunities on the horizon
Protection: Four opportunities on the horizon
  • Contact Us
  • Marketing services
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • YouTube
  • Instagram

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading