Who is a Life Insurer's Biggest Competitor in Bancassurance?

Who is a Life Insurer's Biggest Competitor in Bancassurance?

Is it another insurer with different products? Is it the Bank’s inability to seriously commit to the core fundamentals of bancassurance success?

?Gary W. Denson Shoreline Asia – April 2023

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In the year 2000, I was responsible for Affinity & Bancassurance Business Development across Asia for AIG & AIA. 'Bancassurance' was in its nascent years with great excitement abounding within both the insurers and banks across Asia. Employing a new team and approaching this vastly sought after 'new channel of business', I embarked on a BD strategy to win at least one deal per Sth East Asian country. Banks in Singapore, Malaysia and Thailand seemed to be the most receptive to this new channel.

Of course, other major international insurers were also acutely keen to secure their share of this new channel opportunity as the Banks’ opened up to sharing their customer bases and branches. And so, the bidding wars began. A winning value proposition plus an attractive set of commercial terms was to prove a winning formula in those formative years. I was so excited when we won the Bank of Asia partnership in Thailand!

However, na?veté, ignorance and a lack of resources soon saw the bancassurance opportunity delayed, falter and eventually fail to meet even the modest initial year's projections! Why?

Was it a lack of the Bank's upper management engagement and belief in the new channel? Was there a disjoint between the Bank's training and remuneration of the staff newly assigned to 'the new sales channel'? Were there regulatory delays as the local regulator struggled to approve products already in the market but only distributed by Agents?

The answer is yes, yes, and yes!

?BUT....my BIGGEST competitor or threat to success was none of the above. Those were all learning and executional challenges easily dealt with in time.

My BIGGEST competitor was internal! Believe it or not, I was called into the Assistant Head of Actuarial office in Bangkok one day and told in no uncertain circumstances that I was to cease and desist with any further efforts to make the Bank of Asia deal a success. Apparently, the local Agency force was so confronted, so afraid of this 'new bancassurance channel', that they demanded all activities cease...or else!! Whilst this demand was of course 'off the record', it was serious and threatening.

?Welcome to what is lovingly called "Channel Conflict".

?Thankfully, things have (in the main) changed over the past 23 years, with the Agency and Bancassurance (& more recently, Digital Channels) channels finding their rightful place and roles in providing the best Life, A&H insurance products at the right time through the channel the consumer most prefers.

But at the time I was completely at a loss, confused and frustrated. How could the most senior upper management of an international insurer neglect such strategic and operational considerations? How could they pursue such a strategy without considering these channel conflict implications, mitigate them and still optimise the burgeoning opportunity? All this even before we had to learn, adapt & invent new methods for working with Banks.

Unfathomable! Naively, ignorantly, foolishly I pushed on hard in full belief there was a role for Bancassurance to play across Asia, a role that could work in synergy and harmony with the traditional Agency Channel which dominated (& still does) the life insurance market in Asia as the No.1 distributor of Life products.

Something had to snap! I did!?In early 2001 I joined Cigna International as it started its Life, A&H re-entry into Asia after the sale in 1999 to ACE of its Property & Casualty operations globally.

Shoreline Asia has taken its vast collective 80+ years of experiences in Life, A&H insurance across Asia and created essential tools to ensure such mistakes are never made again. These tools are now available to insurers and banks as they seek to reinvigorate, re-enter and/or drive greater efficiencies and effectiveness from their bancassurance partnerships.

I highly recommend you download Shoreline’s Bancassurance 360 and especially our Bancassurance Touch Point Analysis.

Or contact me directly via email of phone:

[email protected]

Mobile: +61 418551932