PSZAF Insurance Conference 2007

Transcription

1 PSZAF Insurance Conference 2007 K&H Banking and Insurance Luc Cools, CEO, K&H Insurance Deputy Country Head, K&H Banking and Insurance 16 May 2007.

2 Contents Introduction to KBC Group KBC in CEE The Bancassurance Concept Key Success Factors for Bancassurance

3 Introduction to KBC-Group 5 Business Units Strategy, capital & Risk management Belgium 1 2 CEE Private Banking Merchant Banking Czech Rep. Slovakia Poland Hungary Other 3 4 Belgium: ± 43% of Group profit 4bn allocated equity 143bn AUM CEE: ± 17% of Group profit 1.9bn allocated equity 10bn AUM Slovenia Romania Serbia Bulgaria Russia Merchant Banking: ± 34% of Group profit 4.1bn allocated equity 1bn AUM 5 Shared Services & Operations European Private Banking: ± 7% of Group profit 0.5bn allocated equity 55bn AUM N.B.:Profit contribution of business units excluding non-recurring items as at 31 Dec Over the past few years, KBC has strengthened its bancassurance position in Belgium, its traditional home market, while building up an additional franchise in 4 CEE countries and holding a top-3 position in that region KBC holds a 34% stake in NLB, with 40% market share the largest bank in Slovenia. Most recent acquisitions include presences in Romania, Serbia, Bulgaria and Russia KBC also operates in selected merchant banking and private banking markets, primarily focusing on niche strategies 3

4 Introduction to KBC-Group Business Mix Belgium: retail bancassurance asset management private banking Gross income breakdown (FY 2006) * 23% 39% 9% 29% CEE-4: retail bancassurance asset management private banking commercial banking (mostly SME) Private banking: boutique-style onshore in Belgium s neighbours offshore (mainly Luxemburg) * Gross income Net technical charges, insurance Selected merchant banking activities: commercial banking (SME/corporate), mostly in Belgium and its neighbours (export-oriented) capital market activities

5 Introduction to KBC-Group Scale in Euroland Euroland TOP-20 banks ranking by market capitalization KBC Group: 36 bn euros BSCH BNP Paribas Intesa Unicredito BBVA Societe General Deutsche Bank Credit Agricole ABN AMRO Fortis KBC NATIXIS DEXIA Allied Irish Banks Commerzbank Capitalia Erste Nat Bank of Greece Bco Popular Bank of Ireland Situation as of 03 January,

6 Contents Introduction to KBC Group KBCinCEE The Bancassurance Concept Key Success Factors for Bancassurance

7 KBC in CEE TOP-3 Player Proforma 2005, as of perimeter mid-2006 Countries of presence¹ Consolidated assets (bn euros)² Unicredit 17 86,2 Erste 6 48,7 KBC 8 42,7 RZB 15 42,3 SocGen 10 30,1 Intesa 9 22,1 OTP 6 19,1 Source: Unicredit Notes: ¹ Including direct and indirect presence in the 21 CEE countries, excl representative offices; ² 100% of total assets for controlled companies (>50%)

8 KBC in CEE Investments Czech Republic CSOB Bank (97%) CSOB Insurance (97%) Slovakia CSOB Bank (97%) CSOB Insurance (100%) Hungary K&H Bank (100%) K&H Insurance (100%) Slovenia NLB Bank (34%) NLB Life Insurance (67%) * financial participation Poland Kredyt Bank (80%) Warta Insurance (100%) Latest evolutions: Romania Romstal Leasing INK Insurance broker Swiss Capital stock broker Serbia A Banka Hungary Equitas stock broker Bulgaria DZI Insurance(70%) Russia Absolut Bank (93%) Percentages concern direct + indirect presence

9 KBC in CEE Governance: a Stronger Hands-on Approach KBC s governance has evolved in line with the phases of expansion Acquisition phase Decentralized governance Consolidation phase Controlled decentralization Integration phase Centralised steering, integrated management KBC s new structure implies strengthened central management of CEE business one country management, in charge of steering all banking, insurance and asset management businesses within a single country greater focus on synergies and best-practice sharing via crossborder shared services, Group-wide product factories and peer groups

10 KBC in CEE Key Figures Business Unit CEE FY05 FY06 Net profit 409 m EUR 464 m EUR Underlying return on allocated capital 24.9% 24.8% Net profit, Poland C/I (banking) 65.3% 63.6% FY05 FY06 Combined ratio - NL 98.6% 99.4% 138 m EUR 156 m EUR Net profit, CZ + SK FY m EUR FY m EUR Net profit, Hungary FY05 FY06 79 m EUR 58 m EUR

11 KBC in CEE K&H Banking and Insurance Profit contribution, Hungary m m Core Networks Bank 170 branches Insurance 570 exclusive agents Total assets, bank : 8.7 bn EUR Market share, bank : 10% (No.2) Market share, life : 3.7% (No.9) Market share, non-life : 4.0 % (No.6) Staff Main Activities Retail and Corporate Banking Treasury 270 Life Non- life Asset Management Investment Consulting Leasing

12 Contents Introduction to KBC Group KBC in CEE The Bancassurance Concept Key Success Factors for Bancassurance

13 The Bancassurance Concept 3 Levels KBC is stepping up from a Level-2 to a true Level-3 bancassurer Level 3: Integrated distribution Acting as a single company: bank and insurance operations working under unified governance, with integrated distribution channels & centralised FCCE external benchmarking? marketing, integrated customer databases & centralised IT platform and streamlined remuneration schemes Level 2: Exclusive distribution Bank branches sell insurance products from intra-group insurance company as additional source of fee income Level 1: Non-exclusive distribution Bank branches selling insurance products of thirdparty insurers as additional source of fee income. This is the model of most European banks

14 The Bancassurance Concept Unified Governance Country Team Portfolio Committees: alignment of product entities, distribution channels, starting from the customer s needs Cross- border cooperation Streamlined target- setting and remuneration schemes

15 KBC Joint Commercial HQ (Leuven)

16 The Bancassurance Concept Integrated Distribution Channels One Head of Distribution Align, streamline and strengthen the core channels (exclusive agents and bank branches) Use other channels to complement or reinforce the core channels

17 The Bancassurance Concept Micro-markets Bank Agent Employed personnel Self employed

18 The Bancassurance Concept Micro-markets The micro-market concept was developed in Belgium, as the cornerstone of the bankassurance model In essence, the model provides for Exclusive, self-employed agents being linked to the bank branches Bank branches selling standardized insurance products, and referring more complicate products to the agents Agents referring customers to the bank branches The model holds challenges: Linking self-employed and salaried people, with different drivers and culture Different incentives and remuneration systems Customer ownership

19 The Bancassurance Concept Integrated Customer Databases and IT platform Bank Clients Insurance Clients Mutual clients Cross selling Comply with data protection requirements IT: integrated systems and one front- end application

20 Contents Introduction to KBC Group KBC in CEE The Bancassurance Concept Key Success Factors for Bancassurance

21 Key Success Factors for Bancassurance High top management commitment Alignment and buy-in at all levels within the organization. Corporate culture that promotes cooperation. Successful micromarkets have one thing in common: a good personal relationship between branch management and insurance agent Fair and transparent agreements between branches and agents in terms of customer ownership, referrals, service levels, Transparent targets and incentive systems, that closely follow performance and reward cross- selling Integrated IT- systems And

22 Key Success Factors for Bancassurance a lot of hard work The KBC-insurance agent. You d better be his client than his wife