1. Islamic Bancassurance and Wealth Management
Azman Ismail

2. What is Bancassurance? Bankassurance Allfinanz
Merge between banking and insurance
Allfinanz
All financial services under one roof
Financial supermarket

3. What lead to the growth? Main reason
Regulatory barriers between banking and insurance have diminished
Results in more “friendly” environment

4. Other reasons… Banks =>one method to increase deposits
Insurers => alternative modes of distribution due to high agency costs
Insurers own and control relationships with customers.
Low expense ratio
Cross selling of services

5. Regulation & Market Leaders
USA
Financial Services Modernization Act of 1999
Citigroup UK
Financial Services Act
HSBC
France
most significant development
Credit Agricole
Malaysia
BAFIA 1989 => banking, finance company, merchant banking, discount house and money-broking businesses
Maybank

6. USA Citigroup 100 million customers 100 countries
Total assets of $ 800 Billion and total revenues of $ 90 Billion
15% contributed by the insurance
16% of income thru’ insurance.

7. Citigroup’s subsidiaries
Citi Bank
Salomon Smith Barney (CitiFinancial)
SSB Citi Asset Management Group
Salomon Brothers Asset Management,
Smith Barney Asset Management
Citibank Global Asset Management.
Travelers Property Casualty and Travelers Life & Annuity

8. Travelers Total assets > $ 50 Billion
Total annual revenue >$ 10 Billion
Net annual profit > $ 1 Billion.
Travelers contribute 15% of Citigroup net profit

9. UK HSBC Group > 5,500 offices in 80 Countries
Insurance comprises 8% of group profits
HSBC Insurance Holdings => back office operation
administration, underwriting, product development, sales training and compliance

10. HSBC Insurance Holdings
General Insurance Underwriting;
Life and Pensions Insurance Underwriting;
General Insurance Broking;
Personal Financial Services Advisory and Consultancy;
Medical Insurance Underwriting;
Insurance Agency;
Risk Management services, (including captive insurance management).

11. France 70% of new business 60% of total premiums
Sogecap (Societe Generale)
Predica (Credit Agricole)
Natio Vie (BNP)
Credit Mutuel
1970
1980
1990
2000

12. Credit Agricole leading retail bank one family out of three
25% market share of mortgage lending,
21% market share of banking savings collection,
11% market share of life insurance.
Assets >$500 billion

13. Predica Total assets > $60 Billion in 1999;
Gross premiums > $12 billion;
Shareholders funds > $2 billion.
Net income > $150 million.
Expense ratio < 5% (compared with 25%-30%)
Distribution channel - 12,000 bank employees
Policies > 5 million,
Policyholders > 3.5 million.

14. Malaysia Maybank From Bancassurance to Islamic Financial Supermarket
Wealth Management

15. Flashback… WEALTH MANAGEMENT/ FINANCIAL PLANNING Product -Separated
Premium
Channel
Banks &
Financial
Planners
PROTECTION & SAVINGS
Market
-Sophisticated
Product
-Fused
Premium
Channel
- Agency
Market
-Fairly
Simple

16. Bancassurance  Banks Agency  Financial Planners
Channel
Banks &
Financial
Planners
Financial
Planners

17. Between Bancassurance and Agency System
WEALTH
MANAGEMENT
Banks
FINANCIAL
PLANNING
Financial
Planners

18. From Transactional Banking To Wealth Management
Private
Wealth
Management
Private Banking
Preferred/Priority Banking
Transactional Banking

19. Trends
In the year 2000 alone, the figure hit $13.6 trillion, and is currently still growing at a rate of 30 percent per year. In fact, there is now an emerging consensus in the banking world that, in order for top banks to stay lean, they must beef up their private banking portfolio
Citibank, Chase Manhattan and Merrill Lynch are currently managing more than $100 billion each.

20. “Wealth management has evolved rapidly over the past three years
“Wealth management has evolved rapidly over the past three years. Transparency, globalization and the growth of an entre- preneurial culture have led high net-worth clients to demand a new type of private bank. Such a bank needs a global presence, innovative investment ideas and strong investment banking capabilities.” - EUROMONEY

22. EUROMONEY DEC 2006
Private banks have never had it so good. Every region in the world offers a growth opportunity. Clients want an ever-increasing array of products and services. This leads to intense competition, evident in Euromoney’s latest annual private banking survey. But is further consolidation inevitable?

23. Who’s Who In Wealth Management

24. Back To Maybank… Client Insurance, Trustee Services, etc
Banking Services, Investment Services etc

25. Bankatakaful Model
BANK
INSU-
RER

26. From Banka To IWM BANK OTHER OTHER INSURER OTHER OTHER

27. Client-based model CLIENT INVEST MENT ZAKAT /TAX LEISURE FAMILY ETC
BUSINESS
& MGMT
TRUSTEE
SERVICES
LOAN/
OD/
CARD

28. IWM Tools BACK OFFICE ISLAMIC WEALTH MGR PRO- CLIENT DUCTS SOFT CLIENT
WARE
CLIENT
INFO
& NEWS

29. Islamic Concept of Wealth

30. Islamic Concept of Wealth Management

31. The Software ANALYSIS CALCULATORS INTEGRATION ITERATION GENERATION
FARAID
FARAID
HAJ
HAJ
EDU.
EDU.
RETIRE.
RETIRE.
ZAKAT
ZAKAT
TAX
TAX

32. The Future Model? TAKAFUL INVEST MENT ZAKAT /TAX BROKING ASSET MGMT
TRUSTEE
SERVICES
BANKING

33. Wassalam