Presentation on theme: "Insurance Conference-Damascus 2005 Bancassurance in Lebanon AROPE and BLOM Experience."— Presentation transcript:
1 Insurance Conference-Damascus 2005 Bancassurance in Lebanon AROPE and BLOM Experience
2 Insurance Conference-Damascus 2005 2 Table of Contents Bancassurance: Regional Trends Lebanese Model proposal Lebanese Insurance Market Bancassurance in Lebanon Arope / BLOM experience
3 Insurance Conference-Damascus 2005 3 Bancassurance: Regional Trends Bancassurance is the distribution of insurance products through bank channels. Europe discovered Bancassurance in the late 70’s and according to a recent study conducted by “AM Best”, significant changes are expected in the Middle East moving over a Bancassurance Distribution Model.
4 Insurance Conference-Damascus 2005 4 Bancassurance: Regional Trends Projections: Growth forecasted for Premiums in Personal Lines insurance over the coming 3 to 5 years, mainly due to the following factors: Expatriate workers are prompting the development of compulsory medical and motor insurance>>impact the concept of insurance among locals Regulations Reforms that provide a comprehensive insurance framework and open the region to foreign investment Low insurance penetration rates in the region’s countries.
5 Insurance Conference-Damascus 2005 5 Lebanese Model Proposal Similarities between our both insurance markets: –Environment effects –Cultural beliefs –Client behavior These similarities lead us to believe that ultimately, the Syrian market will be developing in a similar way to the Lebanese, especially in the area of Bancassurance.
6 Insurance Conference-Damascus 2005 6 Lebanese Insurance Market Socio-demographic environment In 2003, Lebanon’s GDP was around $19 billion, two-third of which came from the Services Sector The Lebanese Population is estimated at around 4 millions Two-third of the Population is in the 15-64 years age bracket Life Expectancy at birth is estimated at 72 years.
7 Insurance Conference-Damascus 2005 7 Lebanese Insurance Market Socio-demographic Environment Active population constitute 40.5% of total population, nearly 1.62 million 83% of the active population work in the private sector 40% of active population hold “white collar” jobs.
8 Insurance Conference-Damascus 2005 8 Lebanese Insurance Market Market Figures Non Life (2003) Penetration Rate 2.1% Per Capita Density $95 Life (2003) Penetration Rate 0.7% Per Capita Density $35
9 Insurance Conference-Damascus 2005 9 Lebanese Insurance Market Non- Life Market ( in Million USD)
10 Insurance Conference-Damascus 2005 10 Lebanese Insurance Market Life Market (in Million USD)
11 Insurance Conference-Damascus 2005 11 Lebanese Insurance Market Non-Life Density in selected countries Density in Lebanon is small by world standard
12 Insurance Conference-Damascus 2005 12 Lebanese Insurance Market Non-Life Penetration Rate in Selected Countries This rate is the highest among Arab Countries
13 Insurance Conference-Damascus 2005 13 Lebanese Insurance Market Opportunities Potential for a future market growth: only 30% - 35% of the Lebanese population is insured and awareness is growing. Insufficiency of NSSF and Government participation in covering all medical needs of population and retirement schemes.
14 Insurance Conference-Damascus 2005 14 Lebanese Insurance Market Opportunities Compulsory motor insurance (bodily injury only) was introduced in 2003 Insurance for expatriates is also compulsory workmen Insurance is compulsory, but not yet in force Introduction of new law for Public safety in 2005: Decennial for new buildings, Third Party for elevators and Earthquake.
15 Insurance Conference-Damascus 2005 15 Bancassurance in Lebanon Market Size Bancassurance operations are estimated at around 20% of the total Lebanese insurance market in 2003. In the Life sector, premiums increased six- fold over the period 1992-2002, with growth mainly fueled by the introduction of Bancassurance during the last few years Today, Bancassurance accounts for 31% of all life premiums.
16 Insurance Conference-Damascus 2005 16 Bancassurance in Lebanon Different Business Models Banks with participation in Insurance Companies Insurance Companies fully or partially owned by Banks Banks writing insurance through their fully owned Brokerage Firms.
17 Insurance Conference-Damascus 2005 17 Bancassurance in Lebanon Market Facts 47% of Lebanese banks sell insurance products OTC 21% of Lebanese banks work only through affiliated insurers 18% of banks work through independent insurers 8% of banks work through both affiliated insurers and independents insurers.
18 Insurance Conference-Damascus 2005 18 AROPE/BLOM Experience BLOM Bank Group BLOM Bank –Network of 44 branches in Lebanon –Off-shore Banking Unit in Limassol, Cyprus –Branch in Damascus Free Zone –Branch in Amman, Jordan B.S.O, بنك سوريا و المهجر 2 branches in Damascus, 1 branch in Aleppo & 1 branch in Latakieh. BLOMINVEST, the group’s Investment Bank Banque Banorient, located in Geneva Banque Banorabe, H/O in Paris with branches in London, Dubai, Sharjah AROPE Insurance, H/O in Beirut and 5 branches in Lebanon
19 Insurance Conference-Damascus 2005 19 Largest Bank in Lebanon since 1981 till 2004 BLOM chosen as the best Bank in Lebanon by renown international sources: the Banker, Euromoney, Global Finance and Capital Intelligence AROPE/BLOM Experience BLOM Bank
20 Insurance Conference-Damascus 2005 20 AROPE Positioning Consolidated results based on regular growth since 1974 Among the best: 7 th rank within a market of 56 Insurance companies. First Insurance company ISO certified Pioneer in the Bancassurance model creating a financial “ one stop Shop” solution. AROPE Insurance was established in 1974 to: Handle BLOM’s own insurance business Supply BLOM clients with all their Insurance needs AROPE/BLOM Experience AROPE Insurance
21 Insurance Conference-Damascus 2005 21 AROPE/BLOM Experience AROPE Financial Indicators New Decree: R.O.E.: 20.39% Solvency Ratio: 45.47%
22 Insurance Conference-Damascus 2005 22 AROPE/BLOM Experience Benefits for BLOM Bank New source of revenue (in tightening financial markets) Leveraging existing infrastructure (network, front office employees, IT, etc.) Strengthening relation with clients (continuity insured by renewals of policies).
23 Insurance Conference-Damascus 2005 23 AROPE/BLOM Experience Benefits for Arope Using a large existing Network Large Existing Client-base allows for synergies in marketing: “A good Bank client is a good Insurance client” Development of Personal Line / Retail insurance business (easy marketing via bank branches) Risk diversification (large number of small policies in portfolio) Low operating & distribution cost Limited collection problems
24 Insurance Conference-Damascus 2005 24 AROPE/BLOM Experience Benefits for Clients Value-added service Convenience: One-Stop Shop for all their financial needs Payment facilities
25 Insurance Conference-Damascus 2005 25 AROPE/BLOM Experience Bancassurance Operations Direct Bancassurance : OTC products Motor Compulsory Bodily Injury Motor Material Damage Travel Property (office and home).
26 Insurance Conference-Damascus 2005 26 AROPE/BLOM Experience Arope Products
27 Insurance Conference-Damascus 2005 27 AROPE/BLOM Experience Bancassurance Operations Indirect Bancassurance: BLOM retail products Retirement Plan:Damanati Education Plan:Waladi Car Loan:Sayarati Consumer Loan:Kardi Home Loan:Darati Credit cards
28 Insurance Conference-Damascus 2005 28 AROPE/BLOM Experience BLOM Retail
29 Insurance Conference-Damascus 2005 29 AROPE/BLOM Experience IT Solution Two existing models of IT solutions: Online: One database for both, Bank and Insurance Company Off-line: Separate Database We opted for the second option for Banking Secrecy’s sake
30 Insurance Conference-Damascus 2005 30 كلمتنا كلمة. Thanks for your attention !
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