Internal distribution channels consist of the network of exclusive insurance agents and the Česká pojišťovna branch network.
In conjunction with the implementation of the new company-wide strategy, Closer to Customers, a major reorganization took place in mid-year: the distribution channels were distributed between the newly established business units ČP Retail and ČP Business Risks. The objective of this step is to achieve a higher degree of sales channel specialization on specific client segments as well as to increase management focus on running operations and maximizing sales personnel performance.
In 2007, we set off on a fundamental transformation of retail distribution channels. The goal of the new initiative, which is entitled My Family, is to introduce a new customer service process through highly trained family financial consultants. Each consultant’s relationships with the customers he or she cares for will be based on regular contacts and modern consulting techniques. Before consultants begin building their family portfolios, both sales personnel and all levels of management underwent specialized training and new sales and management tools were developed.
The retail exclusive insurance agents distribution channel fulfilled most of its planned parameters in both life and non-life insurance as well as the emerging supplemental pension insurance and mutual fund sales areas. In addition to meeting its sales targets, the channel added roughly 500 agents to its team, an increase of approximately 15%.
Board of Directors’ Discussion and Analysis of the Company’s Business Activities and Financial Condition
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Two major sales campaigns were executed during the year to support sales. The first, which took place in the spring, focused on relaunching unit-linked life insurance. Thanks to this campaign, among other factors, we succeeded in growing the share of unit-linked life insurance in overall life insurance sales from 10 to 50%. The second, fall campaign was also very successful and together with the DYNAMIK Plus campaign made a major contribution toward fulfillment of the sales plan. The last months of 2007 saw the successful launch of the new product GARANCE (a single-premium investment contract linked to a guaranteed fund) and support for sales of MTPL insurance. The branch network, too, met the key targets set for it by the business plan. The biggest accomplishment was an over 30% year-on-year increase in life insurance sales. During the year, we managed to fill 100 “mobile teller” job positions with new hires, with the goal of serving clients outside of brick-and-mortar premises of Česká pojišťovna and new acquisitions.
The network of agents specializing in selling insurance to Small and Mid-sized Enterprises (SMEs) also put in a strong performance, achieving significant growth in property and casualty insurance and fleet insurance, as well as in network development and improving the quality of its consulting function.
External Distribution Channels
Insurance agents operating on the basis of Multi Level Marketing (MLM)
In 2007, Česká pojišťovna continued to work with two of the biggest players in the MLM segment: OVB ALLFINANZ, a.s. and ZFP Akademie, a.s. In the last quarter of the year, however, we began to focus more on collaboration with additional partners, such as Finance Albatros,
Effectconsulting, EMTC, Raiffeisenbank and others. In addition to winning a higher share of individual companies’ business, we also emphasized building relationships with other partners in the market.
Česká pojišťovna’s goal in 2008 is to maintain the existing level of cooperation with OVB ALLFINANZ, a.s., intensify our business relationship with ZFP Akademie, a.s., and build significant positions with our other business partners in the segment.
Tour operators and third parties
In 2007, Česká pojišťovna continued to develop business collaboration with third parties such as tour operators, realty agencies, mortgage brokers, and others.
Our relationships with these external partners are pursued on a key account management basis. Individual partners are segmented according to the amount of overall business they generate, and the scope and level of Česká pojišťovna’s value proposition to them are adapted accordingly. In 2007, the tour operator segment, which had been handled at the regional level, was centralized and is now managed centrally from Prague. The reason for this centralization was to improve the quality of the services provided to tour operators. Česká pojišťovna maintained its long-standing market position in 2007, despite heavy competition in the segment.
In recognition of the improved services provided by Česká pojišťovna, the Company was awarded second prize in the Best Travel Insurance category of the TTG Travel Awards 2008 competition.
In 2008, Česká pojišťovna will focus on improving the actual product sold to tour operators and retaining the existing customer base in the tour operators segment. In the other third parties segment, emphasis will be placed on new acquisitions in addition to retention activities focused on existing business partners.
Brokers, car dealerships, and leasing companies
In 2007, Česká pojišťovna continued to pursue business cooperation with other third parties such as brokers, car dealerships, and leasing companies.
Like tour operators, these external partners enjoy individualized services on a key account management basis. Individual partners are segmented according to the amount of overall business they generate, and the scope and level of Česká pojišťovna’s value proposition to them are adapted accordingly. In the brokers segment, Česká pojišťovna focused in particular on further improving day-to-day service, i.e. quick administrative support of individual brokers throughout all the regions. Our focus on service quality did not go unnoticed by the brokers, as Česká pojišťovna placed first in the main category of the Insurance Company of the Year survey conducted by the Association of Czech Insurance Brokers. We also took top positions in all other categories of the contest.
In the car dealerships segment, 2007 saw another year-on-year rise in new contractual partners, bringing their total number to over 600. In this segment, like the others, Česká pojišťovna’s strategy is based on highly professional services, especially in terms of quality and claims processing speed.
Among leasing companies in 2007, Česká pojišťovna maintained its long-standing position as leader in the segment despite heavy competition in the market. Even more significantly, we stabilized the profitability of products offered jointly, thereby laying fertile ground for further business cooperation.
In 2008, Česká pojišťovna will continue to focus on the quality of services provided to these third parties and bring further innovation to this area.
Česká pošta (Czech Post)
Czech Post is a strategic business partner for Česká pojišťovna. Under a long-term contract, Czech Post distributes selected insurance products of Česká pojišťovna through all its sales locations. In 2007, the overall
distribution model was made more effective and we brought about a major improvement in the quality of sales support provided to employees of Czech Post. Within the framework of these changes, over 2,000 more post office workers were trained and certified, bringing the current total to nearly 7,000 certified postal insurance
intermediaries. At the same time, both contractual partners agreed to expand and improve the product portfolio, resulting in a comprehensive offering of four life and three non-life insurance products. The aim of this collaboration is to offer clients simple, high-quality bancassurance services at any of 3,400 post offices in the Czech Republic.