Eurapco

1
Eurapco European Alliance Partners
CompanyAvoiding Conflicts and Dissatisfaction
between Multichannel and Sales

• Jacob Flemming
• 17.09.2009 / Vienna

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Index

• Eurapco
• Multichannel concept Business value proposition
• In each Market / Partner
• Best Practice How to avoid conflicts?
• Understanding management requirements in every
  channel
• Increasing productivity without spoiling
  remuneration systems

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Partners
4
Partners
5
TOTAL Business 2008 (million Euros)
TOTAL 43361
6
Non life Business 2008Premium income (million
Euros)
TOTAL 31412
7
Life Business 2008 Premium income (million Euros)
and market positioning
TOTAL 11949
n.a.
4
12
9
5
13
4
Note that the figures mentioned are not directly
comparable between Partners as their accounting
rules and requirements differ.
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Multichannel concept
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Business Value proposition and model
Traditional Ag Bks Bancassurance Direct
Marketing Case oriented Segment oriented Cherry pickers
Product Wide product range Permanent adaptation to individual consumers needs Few simple and wide products linked or not to financial products Easy to modify Few, simple wide Easiest modifiable product
IT Very complex processes Processes must be adapted to the Bank Fixed streamlined
Claims Involvement desire No involvement No involvement
Training In depth - wide Basic In depth - standar
Controls Mgm. Info. High costly controls - UW, Claims Financial Mgm. Info. Vital volatile seldom shared Easy, transparent shared control UW, Claims Financial Mgm. Info. Vital, shared and more meaningful Easy, permanent control - UW, Claims Financial Mgm. Info to aloud permanent fine tuning
10
Business Value proposition and model
Traditional Ag Bks Bancassurance Direct
Service levels Segmented Agents intranets Brokers Access to UW / Claims Segment oriented Cherry pickers
Product Wide product range Permanent adaptation to individual consumers needs Few simple and wide products linked or not to financial products Easy to modify Few, simple wide Easiest modifiable product
IT Very complex processes Processes must be adapted to the Bank Fixed streamlined
Claims Involvement desire No involvement No involvement
Training In depth - wide Basic In depth - standard
Controls Mgm. Info. High costly controls - UW, Claims Financial Mgm. Info. Vital volatile seldom shared Easy, transparent shared control UW, Claims Financial Mgm. Info. Vital, shared and more meaningful Easy, permanent control - UW, Claims Financial Mgm. Info to aloud permanent fine tuning
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Preliminary considerations

• Channels in different Markets can have different
  weight and development
• Multichannel to diversify from main channel
• Protect main channel or not ?
• Use the strength of the brand or create a new
  brand ?
• Price and Service Levels by channels ( personal
  lines )
• Not subsidize
• Different loss ratios by channels
• Certain channels are still marginal but we think
  have high growth potential

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Multichannel Channels conflicts ?

• ALLIANZ TO CLOSE ALLIANZ 24
• Allianz is to close its direct internet operation
  Allianz 24, moving the system to the Allianz web
  site, reports Insurance Day.
• Allianz was said to be planning a new presence in
  the discount insurance market via another
  yet-to-be-launched online platform that will not
  use the Allianz brand name. The new platform will
  be pan-European. BRAND ISSUE
• Allianz launched Allianz 24 in 2005, attempting
  to sell traditional policies via agents MAIN
  CHANNEL and cut-price policies via the internet.
  Allianz conceded this week that it was a classic
  case of the collision between two different sales
  channels.
• Allianz 24 caused resentment amongst the
  insurers 10,000 agents because customers could
  buy the same policies for up to 30 less but
  then, having bought the policies online, demanded
  the same after-sales service from agents. PRICE
  AND SERVICE
• Allianz 24 insured only about 300,000 vehicles
  online last year, out of nearly 9m vehicles in
  total. MARGINAL IMPACT

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France Covéa (2008)
Covéa
Channel distribution

• MARKET
• French Market shrinks by 6 in 2008
• ( Life -10.3, Non life 4 )
• Life 62 Bancassurance - Non life 38 Direct,
  35 Tied Agents
• COVÉA
• Stable GWP in 2008
• 6 Market Share. Rank 8 overall, 1 in Motor, 1
  in Property Liability

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Distribution Strategies
Covéa

• Covéa Group Partnership structure. Composed of
  3 independent Insurance Companies
• MAAF Direct insurer, 574 points of sales
• MMA Tied agents, 1971 points of sales Broker
  Business (Covéa Risks)
• GMF Direct insurer, 400 points of sales
• Besides
• Covéa Fleet Fleet business through Maaf, MMA,
  GMF and brokers

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Multichannel strategy
Covéa

• Covéa as such does not really have a strategy on
  this topic these strategies are up to each
  Company.
• Therefore, the 3 brands are competing against
  each other at a sales level
• MAAF business done by Maaf employees in Maaf
  shops MMA business is done by tied agents in
  MMA Agencies GMF business is done by GMF
  employees in GMF shops
• MAAF, MMA and GMF propose online insurance
  brand, prices are the same as in the shops. No
  internal competition, unlike some other companies
  (Groupama and their low-cost amaguiz.com)
• Nexx a MAAF daughter company (Online / Phone).
  Used for White Labelling and to have a different
  pricing policy without competing against the main
  distribution channel.
• MMA/Covéa Risks identical U/W guidelines and
  Terms Conditions to avoid internal competition

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EUREKO
Description Sales Channel
Source Company Data 2007/2008 figures not
available
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EUREKO
Distribution channel
Characteristics
Brand
Direct
Agents
Brokers
Bank

• Leading multi-channel insurer in The Netherlands
• Innovative service propositions
• Strong portfolio of brands

• Leading insurance company in Greece
• Superior agent management best recognized brand

• Leading broker channel co-operation in Ireland
• Highly successful and well respected
  multi-specialist financial services company.

Distribution Strengths

• Leading insurance company in Poland
• Strong and loyal distribution network
• Very strong brand (99 brand awareness)

• Medium sized Life and Non-Life insurer

• Niche market player,single distribution
• Strong bancassurance as result of BCP relation

• Developing operations in Romania, Bulgaria and
  Cyprus

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EUREKO

• When there is a channel conflict product and
  price are the same, but the marketing strategy
  will be different.
• We strive for market leadership in all segment
  and for a leading position in all distribution
  channels, direct, broker, bank distribution
  (currently 1 in direct and bank distribution and
  5 in broker distribution)
• Key to our Dutch strategy are operational
  excellence and cost leadership

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GERMANY GOTHAER / Description
GOTHAER
Channel distribution

• MARKET
• 1,5 German market growth in 2.008
• ( Life 1,8 - Non life 1 )
• Life 75 Agents and Brokers
• Non life 89 ( Agents 45 Brokers 44 )
• GOTHAER
• 2,3 Growth ( Life 3 - Non life 1,7 )
• Market quota 2,2 number 12 in the ranking GWP

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Multichannel strategy
GOTHAER

• Main channel traditional ones (Agents and
  Brokers)
• Complementary channels companies Juanitos (white
  label) and Asstel (direct business)
• Different branding by channels besides
  traditional which are under the original
  Company/Brand.
• Price differs from one channel to the others,
  according to different cost structures
• Service levels the same in all channels
• Economic impact
• Volume very small, just start up companies

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Market shares non-life per regional insurance
company
Länsförsäkringar
31,4
75 of the Swedish population lives outside
Stockholm
43,0
52,2
41,6
31,3
40,0
57,9
16,7
38,9
36,8
41,5
38,5
45,9
55,6
27,7
50,2
50,9
35,8
44,5
49,1
41,5
36,7
43,7
30,1
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Distribution of Life, Non-Life and Bank
productsCommercial Lines
Private Lines
Länsförsäkringar
Salaried staff 35
Captive agents 10
Brokers 65
Increased sales through brokers and captive agents
Telephone 60
Agents (captive and car dealers) 20
Internet 15
Direct mail / Affinity Groups 5
Increased sales through the Internet channel
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Channel Strategy
Länsförsäkringar

• No channel conflicts on the personal lines
• Brand Name endorsing each region, e.g.
  Länsförsäkringar Göteborg
• Same price for all channels, services depends on
  channel

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Potential for increased customer commitment in
LF Large customer base few full-service
customers
Länsförsäkringar
Total Approx. 3.3 million customers
Länsförsäkringar in the market
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SPAIN CASER
CASER
Channel distribution

• MARKET
• 7,6 Spanish market growth in 2.008
• ( Life 15,2 - Non life 2 )
• Life 72 Bancassurance - Non life 66,9 ( Agents
  38,6 Brokers 28,3 )
• CASER
• 11,6 Growth ( Life 30,4 - Non life -0,8 )
• Market quota 4 number 5 in the ranking GWP

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Multichannel strategy
CASER

• Main channel Bancassurance / Shareholders
• No different branding by channels
• Coming from White brand in Bancassurance and
  Affinities
• Price restriction diversification channels higher
  than highest in Bancassurance
• Service levels the same in all channels
• Economic impact
• Volume smaller than 22 but 40 in Non life
• Results below average
• No cross subsidising

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10
Swiss Mobiliar
Call-Centre Internet Brokers
Agents
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Business Model
Swiss Mobiliar
Today
Tomorrow
Internet
Call Center(Mobi24)
Using more channels, but all business canalised
through local general agencies. Commercial
business possible also through brokers
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5 Main Drivers for Successful Implementation of
integrated Multi Channel Business Model
Swiss Mobiliar
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Finland / TapiolaMarket Description
Tapiola
Market Channel distribution

• MARKET
• Market value 200815bn
• Finland is predominately a direct market
• Exception car dealers and tied agents /
  franchise office
• Tapiola
• Tapiola Group is at present a financial
  conglomerate consisting of seven companies
• 13.97 of the market 3rd largest Group
• 164 Sales point of which 61 are own offices and
  rest is exclusive service offices
• 3000 employees

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Multichannel strategy
Tapiola

• Agents
• Car dealers and
• Agents Franchise sales offices which are
  exclusive to Tapiola
• No price or service differentiation between
  channels
• Brokers mainly in industrial business
• Increased importance of call-centres and internet
  as sales channels
• Bancassurance related concepts increasing in
  importance
• Increased importance of white-label products

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Thanks for your attentionMuchas GRACIAS
They asked rabbi Ben Zoma Who is a wise man? He
said The man that always finds something to
learn from the others