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INSURANCE

IN

CENTRAL

EUROPE

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CONTENTS

PREFACE FOREWORD

EXECUTIVE SUMMARY

PART I – THE CENTRAL EUROPEAN ECONOMIC ENVIRONMENT GDP Performance Divides the Region

Elevated Sovereign Debt Levels Increase Uncertainty Uncertainty Further Presses Down

Changing Regulation Presents New Challenges

PART II – THE CENTRAL EUROPEAN INSURANCE LANDSCAPE Market Growth Expected from Selected Leaders

Overall GWP Development Shows Signs of Recovery Key Players Struggle to Break Through

Product Split Reflects Local Characteristics

PART III – FUTURE DEVELOPMENT OF SALES CHANNELS Monitor New Channel Trends

Watch for E-brokers: Threat or Opportunity Capitalize on the Impact of Online Developments Initiate Future Product Innovation

PART IV – CHANNEL MIX SELECTION

Find the Right Channel Strategy (Channel Mix Included) Deploy the Key Success Factors

Drive Profitability and Efficiency Profit from Channel Specific Pricing

PART V – CHANNEL OPERATIONS AND PERFORMANCE Organize Channel Management Strategies

Improvement of the Tied Agent Network

Find the Optimal Network Size (Channel Satisfaction Included) Capture the Channels’ Cross-selling Potential

Understand Client Behaviour PART VI – SUMMARY AND OUTLOOK Summary of Findings

Outlook on Channel Development

METHODOLOGY AND SCOPE OF THE STUDY ABOUT US 3 5 6 9 15 21 27 33 41 44 45 CONTENTS

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PREFACE

EFMA AND ROLAND BERGER STRATEGY CONSULTANTS DECIDED TO HAVE A FOCUSED

REVIEW ON THE CENTRAL EUROPEAN INSURANCE MARKET. IN THIS NEW SERIES OF STUDIES WE ANALYZE THE SPECIALTIES, UNIQUENESS AND REGIONAL STANDARDS. THE FIRST BOOK COVERS THE SALES EFFICIENCY POTENTIAL

PREFACE

The Central European countries are used to be the forerunner of the growth and development in the region, but their limitation due to natural size and the colorful diversities coming from their patchwork setup results in only moderate performance. The level of sovereign debt and uncertainties due to the constant changes from financial markets means challenges at large scale and definitely intensive work for the insurers.

The insurance sector still has a lot of opportunities for growth and efficiency increase in the region, and there is a significant difference from other European countries. But closing this gap will never mean copying the Western European markets.

As we realized and faced several times to the critical differences between the mature and the CE insurance markets, but also the diversity of the countries within the region, we have decided to conduct a focused study. Our overall aim is to create more transparency, to understand and enhance the local insurance markets by a deeper, cross-country analysis and by enforcing more knowledge transfer among the neighboring countries. Our aim in this report focusing on the sales channel efficiency was to provide a regional insight on how insurance companies in CE constructed their sales channel mix, covering topics like:

> The actual performance, future role and optimal size of agent networks > Key success factors or wasteful efforts in online sales channels > The role of the branch networks

> The renaissance of bancassurance channels > Overall channel/product profitability perceptions.

Of course, the study also provides a unique base for comparison of regional players in CE along specific KPIs and strategies.

We truly hope, we can provide you a holistic view on recent sales channel related developments and you also can benefit a lot from reading about challenges and solutions from the whole region.

Frigyes Schannen Managing Director

Roland Berger Strategy Consultants

Patrick Desmarés Secretary General Efma

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FOREWORD

We are not just witnesses but also stakeholders and constructors of those changes that are revolutionarily revis-ing the insurance market in Central Europe in these years. Client behaviors have been significantly changrevis-ing since 2008, which leads us to continuously think about how the CE insurance market will look like in 3-5 years, what products and clients are going to demand, and which channel can be the most convenient and efficient to serve the customers’ needs. This is the path away from crisis management to tackle the current circumstances in 2013 and moving forward. Today, five years after 2008, we can finally go back to the so called “business as usual”.

Insurance, similarly to other Financial Services sectors, reacts with some delay and has its own understanding and resistance against change. But we are already in a transition phase. Old, traditional models seem to strug-gle, but there is no new, perfect model yet on the horizon that would be the ultimate solution for the long run. Therefore, we, insurers being present on these markets, all test new models towards improving cost efficiency, understanding the new era of client needs so that we all play on the same field and achieve success by reaching the same goal: customer satisfaction and profitable growth.

In order to answer the market challenges and elaborate a continuous objective analysis, sales and service chan-nels together with adequate client segmentation and product portfolio are the key to address cost and sales efficiency. We, insurers work on these issues on a daily basis, but we understand there is more out there, exter-nal “eyes” from where we can learn to see and find new solutions, and/or also which can grant confirmation to our existing hypotheses.

Considering all relevant factors, challenges and opportunities we were very pleased to support Roland Berger Strategy Consultants and Efma in the preparation of this study. Among other objectives, we targeted to get a deeper understanding of the channel mix trends, the perceived future of the tied agency channel and also the development directions of web-based insurance.

This study provides a full range of insights and thoughts on strategic dilemmas insurers face nowadays under the challenging CE market conditions, but as diversity is characteristic of each of these countries, it is our job to look for individual strategic answers for the different situations, according to both our strengths and weaknesses in each, unique country.

Forward-looking statements

The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management’s cur-rent views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements. Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group’s core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events) (iii) frequency and severity of insured loss events, including from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

No duty to update

The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.

FOREWORD

Veit Stutz

Regional Chief Business Officer CEEMA

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EXECUTIVE SUMMARY

ECONOMIC LANDSCAPE

The Central European region is still facing recession, as reflected in the GDP develop-ment of the recent years. Growth of the previously well-performing Czech Republic has stagnated and despite Poland and Slovakia have shown a slight growth, the region is in decline overall. The increasing sovereign debt levels and the subsequent downgrading trend of sovereign debt ratings fuel the uncertainty in the financial markets, affecting all players. Consequently, the unemployment rates are growing throughout the region and consumer spending is decreasing.

Additionally, changing regulations impose new capital and risk management require-ments, while mandatory disclosure of received remuneration and stricter product regulation will continue to put pressure on the margins of insurers. At the same time, the new regulatory framework will present new opportunities and the foundation for a more stable future (e.g. by increasing transparency). While the first signs of an upward trend are visible, the crisis is expected to dominate the economies in the mid-term.

INSURANCE MARKET

The financial crisis harshly hit the Central European insurance market in 2009 causing a 20% drop in gross premiums. While signs show slow recovery, the total regional GWP has yet to reach its pre-crisis level. Insurance firms struggle to regain former revenues as markets differ in their progress towards recovery. Despite the fact that the total regional GWP has been growing since, it is mainly driven by the Polish market growth and its size – upturn is yet to come in Hungary, Croatia and Romania. The highest growth in profitability was achieved by the Czech Republic, while Slovakia, Croatia and Romania grew slightly over the last five years. The profitability of Poland and especially Hungary has been declining over the past years.

Overall, the CE insurance market shows a relatively homogenous product portfolio with similar shares of the different life and non-life products in their product split. However, in the Czech Republic, Hungary and Croatia the product mix offered by insurers reflects local characteristics and shows individual patterns. While the share of unit-linked life insurance is the highest in Hungary (65%) across the region, such products represent only 6% of the total life market in Croatia. The market concentration of the top-5 insurance companies is significantly higher (with 10-20 percentage point) in the non-life segment than in the life segment and only Romania deviates from this pattern.

CHANNEL STRATEGY

Following the financial crisis the insurance business has lost its extraordinary profitabi-lity and growth potential in Central Europe, making it crucial to actively assess the existing and new sales channels, and the accompanying strategies. Interviewed market players expect highest growth potential in bancassurance, while tied agent networks linked with branches will keep their importance as a sales channel. Corporate brokers will remain exclusively important in order to reach corporates. Direct web is expected to increase especially in simple, standardized products. However, its potential considered to be limited to the non-life segment. Furthermore, in some countries (e.g. Poland) retail brokers are gaining influence.

The key success factors of a well-performing tied agent network are finding the exact role and USP of tied agents while optimizing their operations, both in terms of product and segment focus. Moreover, the elaboration of a professional recruiting, on-boarding, retaining and training system tailored to agent segments is crucial. Customer experience is an increasingly important topic driving new IT/online developments and enforces stronger quality control on all customer relation activities.

EXECUTIVE SUMMARY

Insurers have to adopted to the difficult economic conditions and also comply with the changing regulatory environment

Insurers are aiming to optimize and transform their sales channel strategies

CE insurance market was harshly hit by the crisis, but signs of slow recovery can be already observed

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PART I

THE CENTRAL EUROPEAN

ECONOMIC ENVIRONMENT

> GDP PERFORMANCE DIVIDES THE REGION

> ELEVATED SOVEREIGN DEBT LEVELS INCREASE UNCERTAINTY

> UNCERTAINTY FURTHER PRESSES DOWN

> CHANGING REGULATION PRESENTS NEW CHALLENGES

CONTENT

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GDP PERFORMANCE DIVIDES THE REGION

European markets have witnessed enormous change over the past five years as a consequence of the financial crisis. Financial sector is especially at the forefront of changes because of its direct exposure to the altered economic landscape. The negative GDP development of the Central European region over the recent years clearly reflects the deep recession which the majority of the countries are facing. The Czech Republic is stuck in recession – the longest in its history – together with Romania, Hungary and Croatia as can be seen in Figure 1. Moreover, decreasing growth can be observed in previously well-performing countries such as Poland and Slovakia.

In fact, Poland has been the only country able to avoid plunging into a recession in the entire region. However, further decrease is expected for Poland in 2013 with GDP growth falling back to 1.2% – The lowest figure in the last twelve years.

ELEVATED SOVEREIGN DEBT LEVELS INCREASE UNCERTAINTY

Central Europe’s sovereign debt levels have increased significantly between 2007 and 2012, fueling the uncertainty in its financial markets. Hungary has witnessed the small-est change since 2007, however its sovereign debt level is the highsmall-est in the region at 79% of the country’s GDP. In contrast, Romania’s sovereign debt level has increased by roughly 189% since 2007, yet only representing 37% of the country’s GDP today. Poland’s relatively small increase in sovereign debt level for the period was partly a re-sult of its continuous economic growth. As shown in Figure 2., sovereign debt accounts for more than half of the region’s GDP.

Economic environment remains challenging as sovereign debt levels continue to rise, fueling uncertainty in financial markets

The Central European region is facing a deep recession with pros-pects of slow recovery – Growth of the top-performers is decreasing

THE CENTRAL EUROPEAN ECONOMIC ENVIRONMENT

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10

5

0 -4

GDP per capita in 2012 [EUR '000]

GDP CAGR 2008-12 [%] CE CE -3 -2 -1 0 1 2 3 4 15

Source: Eurostat, IMF, S&P Bubble size: Population

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While sovereign debt levels are increasing, majority of the countries are witnessing a downgrading trend of their foreign currency long-term debt as can be seen in Figure 3. With the exception of Poland’s stable rating and the Czech Republic’s upgrade to AA in 2011, the remaining countries have been downgraded at least once in the past five years. Moreover, the ratings of Croatia, Romania and Hungary have fallen to non-invest-ment grade during the past two years, significantly increasing their future cost of debt and further undermining the region’s financial outlook.

Figure 2. Gross sovereign debt in 2012 [% of GDP]

S&P DEBT RATINGS CHANGE 2007-2012 CE 56 79 54 55 52 43 37 BB BB+ A A AA BB+ +18% +50% +71% +23% +77% +55% +189%

Source: Eurostat, IMF, S&P

20082009 2010 2011 2012 May 2013 11/23/2012 11/17/2008 12/21/2011 1/13/2013 11/27/2008 8/24/2011 12/14/2012 3/16/2009 11/29/2011 AAA AA+ AA AA-A+ A A-BBB+ BBB BBB-BB+ BB BB-Prime High grade Upper medium grade Lower medium grade Non-investment grade speculative

Source: Eurostat, IMF, S&P

Figure 3. S&P's foreign currency long-term debt ratings development

The impact of the downgrading trend of sovereign debt ratings further undermines the region’s financial stability

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UNCERTAINTY FURTHER PRESSES DOWN

Reflecting the financial uncertainty, unemployment rates are growing throughout the region. Despite signals of recovery in Romania and the Czech Republic up until 2011, the unemployment has increased in nearly all countries in 2012. In fact, only Hungary has seen a minor decrease in unemployment over the past two years. On the contrary, Hungarian inflation is among the highest in the region while consumption is decreasing sharply.

Overall, private consumption has decreased in 2012 in the region. Only Poland’s private consumption has shown a stable growth over the past four years, while the Czech Republic’s consumption declined in 2012 after years of slight growth. As shown in Figure 4., countries with the highest inflation rate between 2008 and 2012 have seen private consumption deteriorate the most in the same time period. In the short-term, further decrease is expected in private consumption for the region, despite a noticeable upward trend signaling slow recovery.

6 2 3 5 1 0 -4 Inflation CAGR 2008-12 [%] Consumption CAGR 2008-12 [%] -3 -2 -1 0 1 2 3 4 4

Bubble size: GDP per capita PPP, 2012

Figure 4. Development of consumer prices and consumption

Source: Eurostat, IMF, S&P

CHANGING REGULATION PRESENTS NEW CHALLENGES

Changing regulation imposes new capital and risk management requirements, while mandatory disclosure of received remuneration and stricter product regulation will transform the playing field of insurers in Europe. The new and amended Directives, as shown in Figure 5., are aimed for creating a more transparent and integrated Euro-pean financial market. While posing new challenges, the new regulatory framework is expected to present new opportunities and the foundation for a more stable and sustainable future.

Stricter regulation challenges the traditional pricing, remuneration and channel strategy models

As a result of increasing unem-ployment and decreasing private consumption, continued pressure on margins is anticipated

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Figure 5. Upcoming European regulatory changes

DIRECTIVES Solvency II Directive 2009/138/EC

IMD II

Insurance Mediation Directive 2002/92/EC

KEY REVISION POINTS OF DIRECTIVES

> Minimum Capital Requirement & Solvency Capital Requirement > Adequate risk management and ensuring adequate capitalization > Disclosure and verification of assumptions to regulator > Market estimation of implementation: January 1st, 2016

> More transparent financial systems – In particular derivatives, securitizations and insurance policies

> More integrated, efficient and competitive EU financial market > Market estimation of implementation: January 1st, 2015

> Enlarged scope of IMD to include direct sales (incl. online), loss adjusting, claims management and ancillary activities

> Simplified declaration procedure for insurance intermediaries and allowance of bundling practices

> Aligned requirements of IMD II and MiFID II for those selling insurance investment products

> Market estimation of implementation: January 1st, 2015

MiFID II

Markets in Financial Instruments Regulation and Directive Amendment to 2004/39/EC

Source: EU

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PART II

THE CENTRAL EUROPEAN

INSURANCE LANDSCAPE

> MARKET GROWTH EXPECTED FROM SELECTED LEADERS

> OVERALL GWP DEVELOPMENT SHOWS SIGNS OF RECOVERY

> KEY PLAYERS STRUGGLE TO BREAK THROUGH

> PRODUCT SPLIT REFLECTS LOCAL CHARACTERISTICS

CONTENT

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The insurance market in Slovakia and in the Czech Republic grew both in terms of revenue and profitability between 2007 and 2011 – Hungary underperforms in the region

Following a 20% drop in 2009, the regional GWP growth is driven by Poland and the Czech Republic

MARKET GROWTH EXPECTED FROM SELECTED LEADERS

Since the financial crisis hit the Central European insurance market in 2009 with a significant decrease in gross written premiums (GWP), companies are struggling to regain momentum. Looking at the 2007-2011 period, Poland, Slovakia and the Czech Republic show initial GWP growth, while insurers in Croatia and Romania were able to grow only their profit levels with stagnating or slightly declining total GWP. As can be seen in Figure 6., the Hungarian insurance market lags behind the region in both profitability and revenue, and as a result it has lost most of its attractiveness. However, due to the size of the Polish insurance market and the GWP growth at its leading firms, combined with relatively high GWP growth in the Czech Republic, the overall region has been developing.

Figure 6. Development of the insurance market in CE

-15 -10 -5 0 5 10 15 -20 -25 -30 -8 -6 -4 -2 0 2 4 6 8 10 -35 CAGR GWP 2007-2011 [%] CAGR PBT 2007-2011 [%]

Source: PIU, CSA, HANFA, CAP, SLASPO, MABISZ, Roland Berger Bubble size: GWP in 2011

OVERALL GWP DEVELOPMENT SHOWS SIGNS OF RECOVERY

The effects of the financial crisis caused a 20% drop in GWP on the Central European insurance market in 2009. Recent signs show slow progress towards recovery. However, the total regional GWP has yet to reach its pre-crisis level, as can be seen in Figure 7. While on the regional level GWP shows signs of growth mainly driven by Polish insurers, firms in other countries struggle to regain former revenues. Since the crisis in 2009, GWP in Poland has been growing at an annual rate of 9% (CAGR) reaching EUR 15.3 bn by the end of 2012. Looking at other countries in the region, the lack of GWP growth slows the revival in Croatia and Romania, while upturn is yet to come in Hungary.

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Only a few companies are able to grow fast and challenge the ‘Tired Leaders’ – Most insurers have a decreasing market share

Figure 7. Total GWP development in CE [EUR bn]

2008 2009 2010 2011 2012 2007 5.2 5.1 5.8 6.0 6.1 4.4 2.0 2.0 2.0 2.1 2.1 1.7 1.3 1.3 1.3 1.2 1.2 1.2 31.4 25.1 27.7 27.9 29.2 24.7 3.5 3.0 3.1 2.9 2.6 3.7 2.4 1.8 2.0 1.8 1.9 2.0 16.8 11.9 13.6 13.9 15.3 11.6 CAGR 2007-2012 0.6% 3.4% 4.2% -1.2% -6.8% 6.5% 5.7%

Source: PIU, CSA, HANFA, CAP, SLASPO, MABISZ, Roland Berger GWP

KEY PLAYERS STRUGGLE TO BREAK THROUGH

Most of the top players in CE lost market share and just a few challengers could benefit from market volatility. As visible at Figure 8, the largest companies could maintain their position, but their outlook is not optimistic. The actual position of the ‘Battlefield’, where the highest the density of players, shows well the current atmosphere of the region.

Figure 8. Top-5 insurance companies' market shares

30 25 20 15 10 5 0 CAGR GWP 2008-2011 [%] Market share 2011 [%] AGGRESSIVE FOLLOWERS Market average Market average

SHARE LOSERS TIRED LEADERS

BATTLEFIELD -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 40 Poland

Source: PIU, CSA, HANFA, CAP, SLASPO, MABISZ, Roland Berger

Croatia Czech Republic Slovakia Hungary Romania

THE CENTRAL EUROPEAN INSURANCE LANDSCAPE

On the other side, looking at Figure 9., there is the solid group of ‘Profit Makers’ companies, who have been strong in profit margins, but unable to achieve growth in their GWP.

The most critical group is ‘Behind the game’, because they not only loose market share but generate loss.

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Figure 9. Top-5 insurance companies' profitability

30 25 20 10 0 -20 CAGR GWP 2008-2011 [%] PBT margin 2011 [%] -15 -10 -5 5 15 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 40

Source: PIU, CSA, HANFA, CAP, SLASPO, MABISZ, Roland Berger

BEHIND THE GAME

BATTLEFIELD

FAST GROWERS

PROFIT MAKERS

Poland

Croatia Czech Republic Slovakia Hungary Romania

Market average

Market average

PRODUCT SPLIT REFLECTS LOCAL CHARACTERISTICS

In general, markets show similarities in their life and non-life product portfolio as can be seen in Figure 10. However, distinctive features can be observed throughout the region. In most of the CE countries the life vs. non-life ratio is close to 50-50%, while in some other countries (e.g. Croatia) non-life dominates the insurance market.

The Hungarian insurance market has the largest portion of unit-linked insurance, making up 65% of all life insurance products – It is highly above the 37% average share of unit-linked products in the CE region. On the other hand, only 6% of the life insurance portfolio is made up of unit-linked products in Croatia.

Source: PIU, CSA, HANFA, CAP, SLASPO, MABISZ, Roland Berger

Figure 10. Structure of life and non-life business lines in CE

COUNTRY SPLIT [%]

PRODUCT SPLIT [%]

LIFE INSURANCE [%] NON-LIFE INSURANCE [%]

Other Life Unit- Linked 33 67 52 48 65 35 35 65 35 65 6 94 Motor Property Other 25% 20 25 55 32% 26 32 42 18% 43 18 39 18% 24 18 58 19% 19 19 62 25% 20 25 55 50% CE TOTAL 50% CE TOTAL 4 8 11 2 56 19 2 7 10 10 44 23 6

The product structures of Hungary, Croatia and the Czech Republic show individual local pattern in product mix

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19 THE CENTRAL EUROPEAN INSURANCE LANDSCAPE

In the non-life segment the product split of Hungary significantly stands out of the group. The Hungarian market is described by a particularly high share of property insurance and a relatively low share of motor insurance. Of the total non-life portfolio in Hungary 43% is made up from property insurance, whereas the regional average is only 25%. Conversely, motor insurance only adds 39% of the market, while it usually makes up the larger portion of the market, on average 52%. This phenomenon has been indirectly developed by the strong performance of e-brokers in car insurance.

Croatia has a unique situation in the region in terms of MTPL insurance market. In this country the average policy value is the highest, due to the still regulated market. This could leave room for service differentiation and also for agent commissions.

The given product split in the region reflects huge impact on applicable channel mix. If we look at non-life products, the following important consequences can be derived for the channel perspective:

> The clients require significantly less advisory service than in case of life product > The products are mainly “pull” types, clients demand automatic (e.g. mandatory

MTPL)

> The products are less customizable, rather commoditized, therefore can be offered through e-channels

> In most of the CE countries non-life cannot guarantee long term, sustainable monthly income for most of the agents

> The typical number of claims is higher, therefore there is a certain and inherent need for branch administration.

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PART III

FUTURE DEVELOPMENT OF

SALES CHANNELS

> MONITOR NEW CHANNEL TRENDS

> WATCH FOR E-BROKERS: THREAT OR OPPORTUNITY

> CAPITALIZE ON THE IMPACT OF ONLINE DEVELOPMENTS

> INITIATE FUTURE PRODUCT INNOVATION

CONTENT

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MONITOR NEW CHANNEL TRENDS

TIED AGENT

NETWORK

BRANCHES

BANC-

ASSURANCE

The majority of participants is looking at bancassurance as a channel with outstanding growth potential throughout the region. The key drivers of growth are overall market perfor-mance, banking cycles and cooperation possibilities with the banking sector. Majority of the companies are constantly looking for cooperation with banks, especially in the life segment, taking advantage of their large customer base.

The tied agent network is currently the most important sales channel in CE and is expected to keep this position in the mid-term. The majority of the respondents foresee that it will play a key role in the long-term as well, even if number of agents in Poland and Hungary are expected to decline, especially in the non-life segment. Key challenges will be the optimization and the adaption to regulatory changes, and also the competition with retail brokers.

Branches’ importance as a stand-alone channel is expected to decline in the region, currently just some market leaders can afford maintaining it in the channel form. In most participating countries the key function of branches is strongly linked to the tied agents network, providing negotiation, hiring, retaining and motivational support. The outlook of respondents on the chan-nel’s future emphasized the support function for the tied agents network.

RETAIL

BROKERS

Respondents foresee the major trends for retail brokers to be market consolidation and tightening regulation. Expectations for growth differ greatly among participants: Slovakia, Romania and Poland expect significant growth, while Croatia and the Czech Republic do not expect relevant changes. Meanwhile this is in constant change in Hungary. In some of the participating coun-tries, shifts to MLM are among the key trends, although there is significant intermediary regulatory pressure against it.

CORPORATE

BROKERS

The channel is regarded firstly as expensive, however, it fulfills a key role in managing corporate clients exclusively. As a result, the channel is expected to remain strong throughout the region. Most of CE markets are currently dominated by highly profes-sional international players, trends are pointing towards further consolidation.

E-BROKERS/

AGGREGATORS

In its current state, the segment of e-brokers and aggregators is viewed as underdeveloped. Channel expectations of participants are mixed, but overall growth is predicted. Big players indicate to see the segment as a threat to their established network, ruling out cooperation. The possibility of a price-war is mostly related to this channel according to the majority of participants.

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DIRECT WEB

INSURANCE

Currently, the direct web insurance channel plays a minor role with expectations of high growth in the near future. According to the participants, growth will be driven primarily by the non-life, especially travel & MTPL products. Despite the growth poten-tial, the channel is not expected to gain a dominant position in the near future as its sales potential is seen as limited to simple standard products.

INBOUND CALL

CENTER

Overall declining importance is expected, although Hungarian participants are predicting the channel to gain significance in the future. The channel has its limitations, as personal contact is preferred to over-the-phone service in most countries. On the other hand, aggregators and other online channels could act as possible substitutes in the future.

OUTBOUND

CALL CENTER

The outbound call center channel currently has neutral impor-tance in most participating CE countries, with no significant growth expectations.

SOCIAL MEDIA

Currently, the social media channel is viewed as a supportive channel by the majority of respondents. Moreover, most of them do not expect relevant growth in the future as a sales channel. The greatest challenge indicated for social media is the conver-sion of visitors to leads and finally to the clients.

OTHER (ATM,

RETAIL, ETC.)

Insurance companies are constantly searching for new opportuni-ties. The major potential channels mentioned were car dealer-ships, MLM, franchise systems, loyalty schemes, telco and retail partners. Similarly to direct web, these channels are not expected to gain dominant positions in the near future.

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WATCH FOR E-BROKERS: THREAT OR OPPORTUNITY

The presence of e-brokers and aggregators could be a rising threat in the future according to the majority of respondents in the region. Most correspondents agreed that cooperation with aggregators deteriorated P&C profitability and as consequence, the majority of the big players refuse the possibility of cooperation. One of the key issues regarding e-brokers and aggregators is their focus on prices instead of services, which harbors the possibility of leading to a price war, further deteriorating profitability. On the other hand, small players on the insurance market seek partnerships with up-coming and established e-brokers and aggregators, expecting to be able to gain market share through the cooperation.

CAPITALIZE ON THE IMPACT OF ONLINE DEVELOPMENTS

Online channels are relatively underdeveloped in most CE markets at the moment and according to correspondents, direct web insurance is likely to be one of the channels showing the steepest growth in the mid-term. However, online sales is not expected to overtake the traditional channels. According to expectations, only standard non-life products like travel insurance and MTPL have potential for this channel.

Most market players forecast no or just very limited potential in life products – only low risk, simple, highly standardized products (e.g. injury accidents, protection life) could be interesting in the future. Additionally, high IT investment requirements make insurance companies reconsider the development of this channel.

INITIATE FUTURE PRODUCT INNOVATION

Figure 11. shows the potential future possibilities for new product and service offerings. Majority of the respondents valued linked MTPL as interesting for the future. Currently, new loyalty programs and digitalization for asset tracking have priority and are planned to be launched in the short-term in most of the countries.

Figure 11. New product/service efficiency possibilities

CULTURAL INCOMPATIBILITY

> Off-the-shelf products > Family all covered insurance > Whole-life products > Large number of health related

products

> Partial return of paid fee in case of no return

> Linked MTPL > Healthcare insurance > Sophisticated accident products > More-you-buy, more discount you

get offers > Best doctors' lists

> GPS based all-risk insurance > Insurance on smart devices > New loyalty programs > Increased client experience > Digitalization for asset tracking and

to avoid administration

FUTURE

POSSIBILITIES EXPECTED LAUNCHES

Source: Efma, Roland Berger

Many insurance companies see e-brokers and aggregators as a threat and rule out future cooperation

Online channel will be relevant for simple products – Life insurance has limited potential

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PART IV

CHANNEL MIX SELECTION

> FIND THE RIGHT CHANNEL STRATEGY (CHANNEL MIX INCLUDED)

> DEPLOY THE KEY SUCCESS FACTORS

> DRIVE PROFITABILITY AND EFFICIENCY

> PROFIT FROM CHANNEL SPECIFIC PRICING

CONTENT

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FIND THE RIGHT CHANNEL STRATEGY

Different general channel focus strategies can be distinguished among insurance companies in the region. The most common is the ‘agent focus’, utilized by over half of the respondents (see Figure 12.), in which insurance companies rely on their own tied agent network. This strategy is characterized by a large share of non-life sales and lack of dominant partnership with a banking institution. Roughly, a quarter of the respon-dents indicated to rely on the ‘bancassurance focus’, in which the insurance company operates in close cooperation with another financial institution. In this case large share of the sales is usually in the life segment. The remaining quarter of the participating companies utilizes a ‘multichannel approach’, maintaining both a tied agent network and close cooperation with a financial institution, resulting in a fairly balanced share of life and non-life sales.

Insurance companies tend to offer all products for a wide spectrum of customers through all available channels

Figure 12. Strategic options for general channel focus

54% 23%

23%

SHARE AMONG RESPONDENT COMPANIES

Source: Efma, Roland Berger

BANCASSURANCE FOCUS MULTICHANNEL APPROACH AGENT/BROKER FOCUS

The tied agent network linked with branches has priority among the channels through-out the region (see Figure 13). However, while tied agent networks are expected to keep their importance, branch networks are to be less prioritized in the near future according to the respondents. Growth in priority is foreseen for the bancassurance and corporate brokers channels, as well as for direct web insurance. Other channels with potential growth are expected to only play a minor role in the region.

Figure 13. Relative importance of channels and planned shifts in priorities

Tied agent network

RELATIVE PRIORITIES PLANNED CHANGES

Branches Bancassurance Retail brokers Corporate brokers E-brokers/Aggregators Direct web insurance Inbound call center Outbound call center Social media Other (ATM, Retail, etc.)

3.6 3.3 2.9 2.5 3.2 1.1 2.0 2.3 2.3 0.9 1.9

Source: Efma, Roland Berger

Average scoring (on a scale of 1 to 5; 5 - very important) Top 1-4 Top 5-8 Rest

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DEPLOY THE KEY SUCCESS FACTORS

The key success factors indicated among channels: recruitment, training and relation-ship management. Below is an overview of the most mentioned further advantages, disadvantages and key success factors per channel:

Adequate training and the education of employees are considered to be the key success factors

CHANNEL MIX SELECTION

Corporate brokers > Tailored products > High level of professionalism > Expensive > Inactivity > Relationship management > Service level

Figure 14. Key success factors by channel

Source: Efma, Roland Berger

ADVANTAGES DISADVANTAGES KEY SUCCESS FACTORS

Tied agent

network > Local knowledge and quality > High cost efficiency and

loyalty

> Expensive

> Good agents are aging > Recruitment and training> Motivation and control

Branches > Supporting career path > Geographical presence

> Capital intensive > Very high training

requirements

> Visibility and country-wide coverage

> Highly trained and professional staff Banc-

assurance

> Stable partnership > Reach of banking clients

> Support intensive > Only simple products

> Close interaction > Partnership on all levels

Retail brokers > Flexibility > Client proximity > Difficult to control > Conflict of interest > Relationship management > Segmentation E-brokers/ Aggregators > Market transparency > Reach niche segments

> Deteriorates margins > Cannibalization

> Price transparency > Right pricing and

commission Direct web

insurance

> Convenient, easy access > Good cost efficiency

> Limited product offering > CAPEX need

> User friendliness > Online service provision

Inbound call center

> Constant client interaction > Focus on service

> Reactive – Inactivity when waiting for inbound calls

> Education, training > Quality control

Outbound

call center > Campaign, sales push> Cross-sell potential > Difficult to identify potential targets > Focused effort> Education

Social

media > Attracts large number of potential customers > Lack of control> Uncertain profit generation > Image> Community building

Other (ATM, Retail, etc.)

> Reaching new customer groups

> Potential for external network

> Uncertainty and limited flexibility

> Risk, high market dependency

> Product design > Adequate service levels

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30

Figure 15. Profitability and cost efficiency of different channels

COST EFFICIENCY PROFITABILITY

Tied agent network Branches Bancassurance Retail brokers Corporate brokers E-brokers/Aggregators Direct web insurance Inbound call center Outbound call center Social media

Other (ATM, Retail, etc.)

2.2 1.8 2.4 1.8 1.8 2.4 3.7 3.1 3.2 3.8 4.0 1.5 1.2 1.0 1.6 1.1 2.3 4.3 n.a. 3.6 n.a. n.a.

Profitability and cost efficiency evaluation based on market interviews (scored on a scale of 1 to 5; 5 is the most profitable/cost efficient)

Source: Efma, Roland Berger

DRIVE PROFITABILITY AND EFFICIENCY

Closely inspecting profitability and cost efficiency, the tied agent network and the branches are indicated to be relatively expensive, however considering the main revenue generators, these are the most profitable channels with the best perceived quality of work. Interviewed companies suggest further training, increased motivation and segmentation of agents for improved performance.

As seen in Figure 15., the direct web insurance channel scores high for both profitabil-ity and cost efficiency, due to its low cost level. Social media has a relatively high cost efficiency, however interviewed managers do not see the sales potential of the channel – only used for support and market monitoring functions.

In order to avoid cannibalization, prices throughout the channels are in line with the offered service – Products tailored to customer needs Considering the main revenue generators, tied agent network and bancassurance are the most cost efficient sales channels

CHANNEL MIX SELECTION

PROFIT FROM CHANNEL SPECIFIC PRICING

According to the majority of respondents, the pricing principle does not differ among channels, however, products can be adjusted to the specificities of the channels. The prevailing reason for not using differentiated pricing across channels is the avoidance of cannibalization.

The premium per policy shows significant differences across channels. The highest premium per policy is achieved by corporate brokers, while in retail segment

bancassurance and retail brokers have the highest policy size. Premiums have declined significantly from 2011 to 2012, only the tied agent and inbound call center networks were able to achieve growth, as can be seen in Figure 16.

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Figure 16. Average premium comparison of different channels

[Indexed to corporate brokers]

CHANGE 2011-2012 Tied agent network

2012 2011 Branches Bancassurance Retail brokers Corporate brokers E-brokers/Aggregators Direct web insurance Inbound call center Outbound call center Social media Other (ATM, Retail, etc.)

25 26 45 31 95 4 6 7 9 n.a. 39 23 27 51 35 100 5 6 6 11 n.a. 45

Source: Efma, Roland Berger

-51.5% 8.2% -4.1% -10.9% -8.8% -4.9% -20.4% -3.7% 6.7% -16.0% n.a.

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33

PART V

CHANNEL OPERATIONS AND

PERFORMANCE

> ORGANIZE CHANNEL MANAGEMENT STRATEGIES

> IMPROVEMENT OF THE TIED AGENT NETWORK

> FIND THE OPTIMAL NETWORK SIZE (CHANNEL SATISFACTION INCLUDED)

> CAPTURE THE CHANNELS’ CROSS-SELLING POTENTIAL

> UNDERSTAND CLIENT BEHAVIOUR

CONTENT

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34

ORGANIZE CHANNEL MANAGEMENT STRATEGIES

Management responsibilities for sales channels among board members differ among participants. As shown in Figure 17., while at 55% of respondent companies all sales channels directly report to the CSO, 45% are utilizing a flat hierarchy with separate board members designated to separate sales channels. A widely used structure among respondents is to separate reporting of corporate, retail and bancassurance divisions, and to dedicate a board member to the management of the direct sales channel.

In most cases, companies use profit center setup for management of all channels.

Figure 17. Channel management in the organization

CHANNEL MANAGEMENT ON BOARD LEVEL COST/PROFIT CENTER DISTRIBUTION OF CHANNEL MANAGEMENT COST CENTER PROFIT CENTER 20% 80% CEO

CSO COO LIFE N-L 45%

55% ... ... ... ... ... ... ... ...

Source: Efma, Roland Berger

One of the other key differentiators of channel management among insurance com-panies is the role played by the branch network. The models depicted in Figure 18. differentiate three broadly used branch network types among insurers:

>Country-wide coverage: The branch network functions as an individual channel, ensuring local presence and visibility

>Branches as agents’ hubs: Branches serve only as agents’ home bases, increasing flexibility and cost-efficiency

>No branch network: Tied agents operate independently and are only supported by the headquarters/regional centers.

BRANCH NETWORK AS INDIVIDUAL CHANNEL

Figure 18. Branch and tied agent network models

NO BRANCH NETWORK BRANCHES AS AGENTS' HUBS

45%

41% 14%

SHARE OF RESPONDENT COMPANIES

Source: Efma, Roland Berger

The board members split the sales responsibilities among them at almost half of the insurers

Insurance companies in the region utilize different branch/tied agent network setups

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35

IMPROVEMENT OF THE TIED AGENT NETWORK

The tied agent network remains the key sales channel for most of the respondents. Although fluctuation was somewhat lower in 2012 compared to the previous year (29% vs. 33%), the decrease was mostly due to lack of alternative options on the labour market for agents.

High fluctuation is also related to the structure of the agent network. As indirectly reflected in Figure 19., 58% of the participants stated that their network consisted solely of contractors, which generally does not invoke the long-term relationships. The conctractor status is widely used in most countries, because it is preferred for tax optimization reasons.

Figure 19. Channel management in the organization

ANNUAL FLUCTUATION RATE [%] RELATIVE EFFECTIVENESS OF AGENT AGENT NETWORK TYPE [%] INCENTIVES Non-monetary incentives Outsources Contractors Employees Mixed (Employees +contractors)

Source: Efma, Roland Berger

Competition Extra bonus 2011 2012 33% 29% -12% 6 58 24 12

Effective Not effective

Majority of agent networks operate with contractors – Fluctuation declined compared to last year

CHANNEL OPERATIONS AND PERFORMANCE

Insurers will have to focus even more on agents’ enhanced onboarding programs to maintain the promising declining trend of fluctuation. Besides training programs, best practices of agent incentives include competition, extra bonuses and non-monetary incentives. There is consent that competition might be the optimal tool for high-performing agents and extra bonuses are a relevant motivational tool for average performers, companies have mixed views on the efficiency of non-monetary incentives. For all insurers the right segmentation of agents is crucial. The industry consensus says that the training and development of a highly productive, high quality agent from the basics takes usually 2-3 years from the time of the recruitment. But this three years is (usually) still not enough to create a portfolio of 200-300 clients to become a ‘farmer’. In our typology, we identify at least three types of agents, that have different behavior and priorities, so require different trainings, coaching, remuneration and motivation. 1. ‘Starters‘

> After basic training significant coaching effort needed from unit managers > The first priority is to discover and understand the client needs

> Refreshment trainings can always boost their performance

> Campaigns do not really motivate them but ATL communication makes their life significantly easier

> Motivation scheme must focus on natural selection, that shall allow talented agents to see a positive career path.

2. ‘Hunters’

> Individual workers having the basic product and sales know-how and experience > The challenge of this agent segment is how to generate leads

> ATL campaigns can help them a lot, but the real added value for them is the outbound call center, if it forwards leads to agent network

> In campaigns and internal competitions they are usually the winners, they love selling, growing and being successful (and being rewarded)

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36

> Some of those, who reach the ‘farmer’ size of portfolio would prefer continue ‘hunting’, but the number of clients require operational model change, therefore cooperate with less experienced but talented agent to support him/her in client relationship management (e.g. calling and contacting existing clients to discover changes in needs or life-cycle).

3. ‘Farmers’

> They have already built the client and policy portfolio that allows them to mainly focus on cross-selling and managing the existing clients

> Campaigns do not motivate them for extra productivity, but help them promoting new products

> Refreshment trainings needed for them on an annual basis to keep them informed about all actual developments and trends

> It’s worth utilizing their know-how in product development and also in trainings as best practices

> They do not need lead generation support, prefer contacting their clients on their own to maintain the relationship

> Motivation scheme shall be in-line with their priorities, not pressing them to find a lot of new clients, but to take care of the current client/policy portfolio.

The average productivity of agents - measured in annual premium equivalent - is the highest in the Czech Republic and Slovakia, possibly driven by pension business. On the overall regional level it has decreased by approximately 7% from 2011 to 2012. Only Slovakia and Romania grew in terms of APE while Poland and the Czech Republic witnessed a decrease of 36% and 11% respectively. We have to also make a note that APE/agent indicator is highly influenced by product mix.

CHANNEL OPERATIONS AND PERFORMANCE

Likewise, the policies per agents decreased overall in the region and only Slovakia showed some growth, as indicated in Figure 21. In terms of APE per policy, only Romania and Slovakia gained size, while Croatia managed to remain relatively stable.

Annual premium equivalent per tied agent slightly decreased over 2012 in the CE region overall

ANNUAL APE PER AGENT [EUR ‘000]

0 75 CHANGE [%] -11% -5% -36% -33% 34% CE -7% 15%

APE - Annual premium equivalent calculated from channel share of earned net premium (ENP) and adjusted for real prices 2011

2012

Figure 20. Agent productivity development

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37 200 250 300 150 100 50 0 0 100 200 300 400 500

POLICIES PER AGENT [#] APE PER POLICY

[EUR]

CE

Source: Efma, Roland Berger

APE - Annual premium equivalent calculated from channel share of earned net premium (ENP) and adjusted for real prices 2012 2011

Figure 21. Tied agent channel productivity comparison

Source: Efma, Roland Berger Compared to current channel size.

Direct web insurance excluded as the channel has no physical network.

Figure 22. Expected channel size changes

-50% Stable +50%

CHANNELS PREFERRED CHANGE

Tied agent network Branches Bancassurance

E-brokers/Aggregators

Social media Retail brokers

Inbound call center Outbound call center

Other (ATM, Retail, etc.) Corporate brokers

CHANNEL OPERATIONS AND PERFORMANCE

FIND THE OPTIMAL NETWORK SIZE

Performance in terms of sales and profitability is prone to differ greatly across sales channels, therefore insurers’ satisfaction with the channels’ relative performance is also slightly different. Satisfaction with branches, tied agent and corporate broker networks is high due to their excellent level of process and product knowledge, while retail brokers are considered rather unsatisfactory due to the difficulty of quality control. While the current size of corporate broker and bancassurance networks is considered to be adequate by most of the respondents, in- and outbound call center networks are expected to grow at the given current market conditions, as seen in Figure 22. At the same time, a reduction in the retail broker channel is foreseen, although it is not yet clear to respondents which part of their partner portfolio to maintain.

Slight changes in the different channel size is expected to optimize the channel mix’s performance

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38 CHANNEL OPERATIONS AND PERFORMANCE

CAPTURE THE CHANNELS’ CROSS-SELLING POTENTIAL

The relevant phenomenon about cross-selling is related to the difficulty connecting P&C products with life products. The current success rate is very low. The root cause can be that agents that are good in P&C product sales are rarely good in life products. Another cause is that clients consider non-life agents as pure agents and not as advisors, while conversely a life agent may sell P&C product with higher success rate as an accepted financial advisor.

When considering business potential of channels and current performance, the tied agent network also shows a high potential for cross-selling. Additional relevant cross-selling opportunities include car dealers and conglomerates.

However, cross-selling possibilities across channels are not similar in each country. Czech clients for example are service- and relationship-oriented and thus prefer personal contact.

In Romania, cross-selling as a whole is limited by low personal income levels.

In general cross-selling potential is higher at the sales channels with personal contact

IT development will enable better inhouse communication and increas-ing customer experience

Source: Efma, Roland Berger

Direct web insurance Inbound call center Outbound call center Social media Other (ATM, Retail, etc.) E-brokers/ Aggregators Corporate brokers Tied agent network Branches Banc- assurance Retail brokers

High potential Low potential

Figure 23. Channel cross-selling potential

UNDERSTAND CLIENT BEHAVIOUR

Branches and tied agents have received the most positive rating overall for payment behavior of acquired clients. While the payment habits and cancellation rates are the most stable for clients acquired through branches and tied agents channels, e-brokers performed poorly in these categories. According to the respondents, the highest number of products sold is related to tied agents and banks, while e-brokers show poor performance in this dimension too. Branches and agents are also faced with the least client complaints among sales channels and bancassurance on the other hand receives relatively the highest number of complaints (probably caused by limited client understanding of investment life insurance products).

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39 CHANNEL OPERATIONS AND PERFORMANCE

Increasing penetration of IT solutions and the online channel is expected to have a major impact on both channel strategies and client behaviour. More support will be provided to the agents on the insurer’s side, while more up-to-date information and transparency will be provided to the clients.

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41

PART VI

SUMMARY AND OUTLOOK

> SUMMARY OF FINDINGS

> OUTLOOK ON CHANNEL DEVELOPMENT

CONTENT

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SUMMARY OF FINDINGS

Following the financial crisis, the insurance business has lost its extraordinary profitability and growth potential in Central Europe, making it crucial to actively assess the existing and new sales channels and the accompanying strategies.

Interviewed market players expect the highest growth potential in bancassurance, while branches linked with tied agent networks will keep its importance as a sales channel. Corporate brokers will remain important. Direct web is expected to increase significantly, especially in simple non-life products. However, its potential considered to be limited to the non-life segment. Furthermore, in some countries retail brokers are gaining influence, while the channel’s size is expected to decline overall in the region. The key success factors of a well-performing tied agent network are finding the exact role and USP of tied agents while optimizing their operations, both in terms of product and segment focus. Moreover, the elaboration of a professional recruiting, on-boarding, retaining and training system tailored to agent segments is crucial. Stricter recruitment and on-boarding programs can reduce the fluctuation of agents, of which the majority is made up of contractors throughout the region. Customer experience is an increasingly important topic driving new IT/online developments and stronger quality control on all customer relation activities.

The tied agent and branch networks are indicated to be relatively expensive, however considering the main revenue generators, they are the most profitable channels with the best perceived quality of work. The direct web insurance channel scores high for both profitability and cost efficiency, due to its low cost structure. Social media has a relatively high cost efficiency, however interviewed managers indicated not to see the sales potential of the channel – only used for support and market monitoring functions. In order to avoid cannibalization, prices are in line with the offered service – products are tailored to the customer’s specific needs throughout different channels.

The productivity of agents, measured in annual premium equivalent, has decreased by approximately 7% for the region overall from 2011 to 2012. Only Slovakia and Romania grew in terms of APE, while Poland and the Czech Republic witnessed a decrease of 36% and 11% respectively. Likewise, the policies per agents decreased overall and only Slovakia has shown a slight growth.

SUMMARY AND OUTLOOK

Following the crisis, sales channel strategies have to be revised and optimized

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43 SUMMARY AND OUTLOOK

Direct web insurance Inbound call center Outbound call center

High growth rate is expected, however utilization is limited Overall declining importance is expected No significant growth is expected and will keep its marginal role

Social media Other (ATM, Retail, etc.)

Role seen as a supportive channel – Uncertainty how to exploit sales potential

Insurance companies are constantly searching for new opportunities

Positive, negative trend Stable

Retail brokers Corporate brokers E-brokers/Aggregators

Major trends are market consolidation and tightening regulation

Will continue to play an important role with strong SME focus

Mixed expectations – Seen more as threat than an opportunity – Big players refuse cooperation

Tied agent network Branches Bancassurance

Strong position – Optimization and regulatory changes as key challenges Its importance is expected to decline – Key function is to support agents Generally strong growth is expected throughout the region

OUTLOOK ON CHANNEL DEVELOPMENT

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METHODOLOGY AND SCOPE OF THE STUDY

METHODOLOGY AND SCOPE OF THE STUDY

METHODOLOGY OF THE ROLAND BERGER AND EFMA STUDY ON THE CE

INSURANCE MARKET

Representative interviews among top managers of CE insurance companies have been conducted by Roland Berger and Efma to develop a study on the regional insurance market. The key objective of the study was to provide a regional insight on how insurance companies in CE constructed their sales channel mix, as well as to provide a base of comparison for regional players in CE. The main topics covered in the study were the following:

> Assessment of actual performance and potential future role of agent networks > Identification of success factors and wasteful efforts in online sales channels > Definition of the branch network’s role

> Examination of the bancassurance channel

> Assessment of perceptions of channel/product profitability.

Focusing on Poland, the Czech Republic, Slovakia, Hungary, Romania and Croatia, Roland Berger organized and completed the study with continuous support from Efma.

Following the methodology outlined in Figure 24., the first step was to define the scope and required data of the study, which was jointly accomplished by Roland Berger and Efma. Following this, Roland Berger designed the survey guidebook/FAQ which was used by all data collectors and facilitators. Data collection was done by Roland Berger through face-to-face interviews with board members, where occasionally a second round meeting took place for clarification reasons. Based on analysis of the collected data, Roland Berger drew conclusions and compiled a preliminary report, which then provided a base for the final Efma report. As of May 2013, the report is communicated by Efma.

During the whole process, Efma played a role in providing support and input for the study, challenging Roland Berger propositions on content. Efma’s role as a facilitator was also key, providing contacts and acting as an intermediator.

Roland Berger and Efma conducted representative top manager inter-views for a study among insurance companies to identify the best practices in sales channel mix in CE

Frame & indicators

definition Data collection

Data analysis &

key learnings Report writing Communication

Figure 24. Study methodology

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ABOUT US

THE EUROPEAN FINANCIAL MARKETING ASSOCIATION

As a global not-for-profit organisation, Efma brings together more than 3,300 retail financial services companies from over 130 countries. With a membership base consisting of almost a third of all large retail banks worldwide, Efma has proven to be a valuable resource for the global industry, offering members exclusive access to a mul-titude of resources, databases, studies, articles, news feeds and publications. Efma also provides numerous networking opportunities through working groups, online communi-ties and international meetings.

For more information: www.efma.com

ABOUT US

ROLAND BERGER STRATEGY CONSULTANTS

Roland Berger Strategy Consultants, founded in 1967, is one of the world’s leading strategy consultancies. With 51 offices in 36 countries, the company has successful operations in all major international markets. The strategy consultancy is an independent partnership exclusively owned by about 250 partners. Roland Berger Strategy Consultants has also made a name for itself beyond the standard consulting business, establishing itself in the field of research and development. Numerous studies on current business and management issues bear the company’s logo.

The Roland Berger Strategy Consultants Academic Network, an association established in 1998 and comprising various universities, puts the company at the core of a continuous exchange of theoretical and practical knowledge. In addition, Roland Berger sponsors chairs at several universities and publishes the „Roland Berger Strategy Consultants Academic Network” and the „Papers on European Management” series.

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Many thanks to the following persons for collaborating in the production of this study:

Roland Berger Partners, Principals, Project Managers and Consultants who helped col-lect the data with the participating companies: Krzysztof Badowski, Constantin Kinsky, Codrut Pascu, Vladimir Preveden, Daniel Voiculescu.

Furthermore, we would like to thank Patrick Desmarès, Lukas Dzuroska, Lubomir Olach and Jean-Luc Mery, our partners within Efma for providing insights, industry expertise and overall guidance.

Roland Berger Financial Services team for analyzing the data and writing the study: Frigyes Schannen, Iván Radnai, Kristóf Schum, Johanna Járai, Balázs Zoletnik, Ákos Újlaki, Dávid Soós.

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© Roland Berger Strategy Consultants, Efma 2013, all rights reserved

www.rolandberger.com www.efma.com

References

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