© Swedbank Bancassurance implementation in the Baltic countries National Bancassurance Conference Chisinau, November 2013 Mindaugas Jusius CEO Swedbank Life Insurance SE

© Swedbank 2. Convenience = simplicity Our slogan “Peace of Mind” Simple Convenient Transparent (Open) KISSKISS Keep It Simple Standardized (Stupid) Develop such products for the bank, which would your broker or tied agent will not be willing to sell at all.

© Swedbank 3. Target clients based on their needs Bancassurance strength is access to: Customer income, age Behavior data Lending - mortgage - consumer loans - leasing - credit cards Families Childs

© Swedbank Products and Processes

© Swedbank Swedbank Life Insurance SE Bancassurance offering GroupSub-GroupOffering in Latvia Offering in Lithuania Offering in Estonia Protection solutionsMortgage protection Pure risk protection Savings solutionsPension saving Child saving Investment solutionsInvestment (unit-linked) products OtherCorporate motivation schemes Annuities x x x x

© Swedbank Credit life..From “buy insurance with mortgage loan” to protected mortgage loan ProductCredit life Marketing nameProtected mortgage loan PositioningThe aim is to cover mortgage loan in case one of mortgage borrower or co-borrower dies becomes disable during the contract term and not to leave obligations to relatives. Targeted customersSwedbank Retail & Affluent customers with mortgage loans ChannelMortgage sales channel KPIsVolume based mortgage portfolio penetration

© Swedbank Reviewed offering for the customer 7

© Swedbank Credit life process changes 8 Simplified health questionnaire (8 or 15 easy to understand questions depending on the sum insured) Fully integrated sales process with loan issuing (“one click”, no paper document flow) Tele-underwriting Automatic premium collection from customers account

© Swedbank Credit life penetration 9 Up to 80% penetration with new loans 40% penetration in the total mortgage portfolio 85% Average loan protection

© Swedbank Can price increase stimulate more sales? 10 Pure protection product can be considered 25% more expensive due to tax system, but simplicity and easy access creates more value for sales people and customers

© Swedbank Can price increase stimulate more sales? 11 Pure protection product price was set based on customer survey

© Swedbank Other products

© Swedbank Positioning of protection insurance products ProductCredit lifeSimple term lifeAffluent term life Marketing nameProtected mortgage loanFamily income protectionFamily income protection plus PositioningThe aim is to cover mortgage loan in case one of mortgage borrower or co-borrower dies becomes disable during the contract term and not to leave obligations to relatives. The aim is to provide financial compensation for families in case family income decrease due to death of earner. Targeted customersSwedbank Retail & Affluent customers with mortgage loans Swedbank Retail activeSwedbank Affluent & VIP ChannelMortgage sales channelTellersPersonal managers, Private banking KPIsVolume based mortgage portfolio penetration Net salesNet sales; Risk under management

© Swedbank Positioning of saving&investment insurance products ProductPension insuranceSaving insuranceInvestment insurance Marketing nameSafe Pension FundChild fundPrivate portfolio, Investment fund portfolio PositioningThe aim is to accumulate sufficient money to be used after retirement. The aim is to accumulate a fund which would enable financing studies or other needs of grown child. The aim is to protect or increase the assets in medium-term perspective. Targeted customersSwedbank Retail & Affluent customers & VIP Swedbank Retail active & Affluent customers Swedbank Affluent & VIP ChannelTellers Personal managers, Private banking KPIsNumber of contractsNumber of new contractsAssets under management

© Swedbank Channels and processes..from a stand alone solutions to fully integrated processes and systems

© Swedbank Central IT System Supported by Insurance Dedicated IT team Is A Competitive Advantage 16 takes info from: Internal core systems sends info to Internal core systems CRM systems Payment systems Finance systems Data Warehouse Alerts/Notice/Letter systems Reporting systems etc Database & Code Front-office application (integrated to bank) Internetbank application (integrated to bank) Back-office application

© Swedbank Physical and E-Channels All products available in bank branch are also available in the Internet bank – Internet bank sales reached ca. 10% Majority of follow-up service functionality is available in the Internet bank (changes, reporting, graphs, etc.) – Ca. 50% of follow-up services done in the Internet bank Quality double-check, channel integration is used for “advice-intensive” operations – e.g. pre-advice over the phone is required before canceling an agreement in the Internet bank One application development & same interfaces – e.g. the advisor’s view is the same as the customer’s view in the Internet bank, making it easy to give advice over the phone Straightforward processes (immediate, automatic execution) – e.g. >50% credit life policies are underwritten immediately at point of sales incl policy issue – e.g. ca. 80% of tele-interviews are completed within 2 working days followed usually by customer confirmation using Internet bank 17

© Swedbank Thank you!

© Swedbank Key success factors

© Swedbank 1. Financial model Profit sharing, but not sales commissions Better customer selection, less claims Interest for after-sales service Open doors for integrated solutions

© Swedbank 4. Act as a regular wholesaler How would you sell Santa Maria spices in ICA stores? 1 step Enter 2 step Make ICA customer choose you

© Swedbank 5. Integrate systems and processes Integrate insurance offering with other bank products Align interface formats ”colors and fonts”

© Swedbank Key Success Factors: Insurance Company Bank How to Keep The Wheel Running? Systematic co-operation models Mutual financial interest & bank support for the insurance business Clear, value-added products and services, avoid internal competition Middle-class focus oriented to large volumes and scale effect Simplified products and processes (stand-alone risk vs. saving products, tele-underwriting) Integrated solutions (channels, IT systems, Internet bank, products, etc.) Remove all complexity from channels (e.g. claims and underwriting) Strong product support Competent sales channel Visibility and PR (both internal and external)