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Bridging the Cultural Divide Between Banks and
Insurers
In
June 2008, we
completed the new USA Study, and
you are invited to download a copy of the survey in
PDF form
clicking
here. This is the third USA study
in addition to the 2007 South African Study.
All
previously published studies are available on this
site.
The 2005 USA Study was the second of
a continuing investigation of the concerns
confronting banks and their insurance partners,
while the
2007 South African Study is the first of
its kind.
This innovative research quantifies the issues that
create barriers to success and it exposes the non
statutory disincentives to affiliation. These
disincentives are rooted in the cultural differences
between banks and life insurers; their distinctive
business models, as well as how these institutions
are regulated, attract customers, distribute their
products, and make a profit; in essence their
culture.
By identifying the
gaps in perceptions, major themes emerged. For
example in the 2005 USA Study, greater than 67% of
all bank and 63% of all insurer respondents agree
that bank customers are unaware of insurance being
sold through the bank today. And greater than 70% of
the banks and insurers would consider working as
part of a consortium to develop specific solutions
to technology issues which are impeding the
distribution of life insurance to the mass market. A
full 90% of both the bank and insurer respondents
plan to increase the scope of their bank
distribution program.
The Studies
utilized essentially the same robust questionnaire
and sent them to both bankers and insurers. We use a
statistical ''gap analysis'' technique to quantify
the cultural issues; therefore using hard evidence
to uncover and explore the qualitative issues banks
and insurers must tackle to achieve success.
The Studies are
organized along six major topic groups:
distribution, marketing & sales, products, risk &
profitability, administrative & operations, and
effectiveness.
The Studies can be
used as a innovative approach for opening and
continuing dialogues between banks and insurers.
The results of the
study can be reformatted to address individual
company needs. Please call Carmen Effron at (203)
226-2645.
History and Background
In 2003 and 2005,
the C F Effron Company, LLC with the support of
industry sponsors and in cooperation with the ACLI
conducted a ground breaking surveys to quantify the
cultural and perceptual issues that divide banks and
life insurers. Both the 2005 and 2003 Study used a
statistical ''gap analysis'' technique to quantify
issues.
Entitled
''Bridging the Cultural Divide Between Banks and
Life Insurers'' (2005 and 2003 Study), the
Studies probed both insurers and bankers to
determine their sense of importance, interest, and
satisfaction covering the variety of issues each
organization tackles as they develop a working
relationship. The Studies concurrently examined bank
and insurer view's about insurance distribution,
marketing & sales, product design, risk &
profitability, administration, operation and
effectiveness. The results highlighted significant
gaps between banks and insurers in their
satisfaction and evaluated the elements needed to
optimize their joint distribution relationships.
Who
participated?
The surveys have
attracted an average of seventy seven banks and
insurer participants . Responses were predominantly
prepared by senior level management. The respondents
reflected a significant representation of the
leading executives in the bank insurance marketplace
and with vast experience in the bank/insurance field
(figure 1). Of the top 11 banks, as ranked by
insurance activity revenue, six participated in the
survey (9 out of the top 30). Also, six of the top
10 insurance carriers, ranked by life insurance
premiums generated through the bank channel,
participated in the survey.
What happened in
2004?
The 2003 Study was
just the starting point. During 2004, three full day
workshops were conducted to explore in-depth the
more visible differences between the banks and
insurers. The sessions were used to examine, discuss
and develop best practice recommendations to
overcome the obstacles impeding the growth and
distribution of life insurance. Small group meetings
were structured to foster open, creative dialog
amongst the participants.
The workshops were
attended by senior managers of leading companies
such as Transamerica, Nationwide, Aviva, Bank of
America, Washington Mutual, and National City as
well as representatives from other insurers and
community banks which are listed in the Whitepaper.
The Whitepaper summarizing bankers and insurers
thought’s and recommendation’s for market solutions
is the result of the 2004 workshops and can be
viewed through this website immediately upon
publication clicking
the 2005
Whitepaper.
What happened in
2006-2007
In 2006 the second
USA Survey was completed. The 2005 Study built on
the previous body of work and tests a number of the
hypothesis and recommendations that were suggested
by the 2005 white paper. The 2005 Study probes both
insurers and bankers to determine their sense of
importance, interest, and satisfaction covering the
variety of issues each organization tackles as they
develop a working relationship.
In 2007 RGA South
Africa identified Bancassurance as a key business
development area and wished to expand their
knowledge of this field as well as assist its
clients internationally with focused research. RGA
South Africa hired C F Effron Company, LLC to
conduct the first
Bridging the Cultural Divide Between Banks and
Insurers.
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