BanCassurance in THE REGION OF former Yugoslavia

Outline 1. Why bancassurance? 2. Market overview – Austria, Slovenia, Croatia, Serbia 3. Case studies – Serbia & Macedonia 4. Roadmap of bancassurance 5. Best practice

Why bancassurance? Reasons for the BANK Extension of bank’s services Better market positioning “Risk-free” increase of revenues Increase of bank deposits in terms of reinvestment Increase revenue from fees charged for payments Loan repayment security in the case of death Loan repayment security in the case of loss of property Reasons for the INSURER Increase of sales: Life insurance Property insurance Increase of revenues Better market positioning Extension of services Extension of target group

AUSTRIA LIFE MARKET CPI – Death, Permanent Total Disability , Temporarily Total Disability Traditional Life insurance – Endowment, Unit-linked + riders (primarily Accident) NON-LIFE MARKET Group accident / Group health / Travel insurance Property – Home / Household insurance, SME

SLOVENIA LIFE MARKET CPI – Death, Permanent Total Disability , Temporarily Total Disability Traditional Life insurance – Endowment, Unit-linked + riders (Accident, Dread Disease) NON-LIFE MARKET Group accident / Group health / Travel insurance Property – Home / Household insurance, SME Car – MTPL, Casco

CROATIA LIFE MARKET CPI – Death, Permanent Total Disability , Temporarily Total Disability Traditional Life insurance – Endowment, Unit-linked + riders (Accident, Dread Disease) NON-LIFE MARKET Group accident / Group health / Travel insurance Unemployment Property – Home / Household insurance, SME Car – MTPL, Casco

SERBIA LIFE MARKET group life not allowed NON-LIFE MARKET Group accident / Group health / Travel insurance Unemployment Property – Home / Household insurance, SME, Industry

CASE STUDIES Serbia & Macedonia

Macroeconomics SERBIA MACEDONIA Population 7.181.505 (Census 2012) Active population Employed Around 2,200,000 Around 1,700,000 Number of unemployed 792,344 Average salary 385 EUR Average pension 200 EUR Average debt per capita 818 EUR Average savings per capita Around 45 EUR per month Number of banks 30 Number of insurance companies 28 (life and non-life) Average insurance premium per capita 75.5 EUR Average non-life insurance premium per capita Around 60 EUR Average life insurance premium per capita Around 12 EUR Population 2,045,262 (Census 2002) Active population 637,855 (2011) Number of unemployed 294,963 Average salary 360 EUR Average pension 144 EUR Average debt per capita 650 EUR Average savings per capita Around 40 EUR per month Number of banks 16 + 4 savings banks Number of insurance companies 14 Average insurance premium per capita 56 EUR Average non-life insurance premium per capita Around 50 EUR Average life insurance premium per capita Around 5 EUR

Case Study - SERBIA Group Accident

Serbia Focus of the project partner OPPORTUNITY Bank, Novi Sad group accidental insurance incl. death from sickness CPI for pensioners’ loans partner OPPORTUNITY Bank, Novi Sad start of project: May 2011 Development of insured:

Voditelj i član tima trebaju iste sposobnosti i vještine ? Case Study - MACEDONIA Voditelj i član tima trebaju iste sposobnosti i vještine ? Group LIFE

Macedonia Focus of the project group life insurance Death from accident/sickness Permanent Total Disability Total and Irreversible Loss of Abilities CPI for all sorts of loans partner OHRIDSKA BANKA SOCIETE GENERALE Bank, Skopje start of project: January 2013

ROADMAP

Roadmap traditional life risk life property / car / SME / UE Affluent clients Deposits HIGH involvment of sales force training intensive Key persons in SMEs Credit protection traditional life Addition to deposits Cards - Assistance Credit protection risk life Addition to Deposits Payment protection Credit protection Overdrafts Cards property / car / SME / UE LOW involvment of sales force „easy to sell“ group accident / travel insurance LOW premium / commission margin HIGH premium / commission margin

Best practice

Technical Support Sales Processes Policy issuing process WEB-portal (info on products, application form data, premium calculation, health questions, acceptance,…) Production reports (daily, weekly, monthly + specific campaigns) incorporation of premium calculation and underwriting (health declaration/questionnaire) into bank‘s software and processes Policy issuing process electronic data transfer bank-insurer (WEB-portal or incorporated software) underwriting with fast response rates – feed-back on acceptance policy issuing to bank and/or policyholder Ongoing business processes payment procedures – standing orders/direct debit reminder/cancellation procedures

Sales Force Trainings and Support Centralized and on-site trainings trainers provided by insurer advisors/mentors per branche office e-learning product trainings – hard skills sales skills trainings – soft skills expert trainings (claims handeling, prevention of cancellations/surrenders/…) dedicated sales trainings (e.g. best sellers club) Call centers / Support centers claims handling clarification and conciliation for on-site questions by sellers or customers

Marketing Marketing material Branch Marketing Product Marketing Insurer's image brochure give aways ATM advertising banners on web-sites intranet-promotions Branch Marketing co-branded posters / flyers within branch offices dedicated co-branded sales desks Product Marketing sales tools – FAQ, „reasons to buy“, underwriting guidelines Incentives remuneration/commission paid to sales force competitions: best sales persons‘ reward, co-organized events/trips

Side Business Commission schemes Incentives clear definitions per product / product line Incentives profit sharing bonus commission schemes Bank to act as Depot bank for the respective investment portfolios Premium collection / recommendation to insurers existing clients

Bancassurance in THE REGION OF former Yugoslavia