Insurance Conference-Damascus 2005 Bancassurance in Lebanon AROPE and BLOM Experience. - ppt download (2024)

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 !