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Bancassurance in a Growth Economy David Went - CEO Merrill Lynch - Banking & Insurance Conference 2000 London 10-13 October, 2000.

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Presentation on theme: "Bancassurance in a Growth Economy David Went - CEO Merrill Lynch - Banking & Insurance Conference 2000 London 10-13 October, 2000."— Presentation transcript:

1 Bancassurance in a Growth Economy David Went - CEO Merrill Lynch - Banking & Insurance Conference 2000 London 10-13 October, 2000

2 zIL&P Group zLife market distribution mix zBancassurance development zIL&P Bancassurance model zGrowth opportunities zPerformance highlights Agenda

3 zMerger of Irish Life plc and Irish Permanent plc in April 1999 zLargest life company and mortgage lender in the Irish financial services market zGeographic focus on Ireland and its booming economy zBusiness focus is on two of the fastest growing sectors of the financial services market (life & pensions, mortgages) zMarket shares over 20%, total assets €29 billion Group Profile

4 zOpportunity in rapidly growing Irish Retail Financial Services Market zBlurring of boundaries between life insurers, banks, mortgage lenders zOpportunities for cross-selling products zComplete distribution mix - bancassurance, direct, intermediaries Rationale for Merger

5 Group Structure Irish Life Retail Irish Life Corporate Associate Allianz-C&G Irish Life Inv. Mgrs. Irish Permanent Bank Other Life US, UK & Offshore Retail life, pensions, investments & savings in Ireland Group life & pensions in Ireland Asset manager for Irish & UK businesses and clients Life & pensions in US & UK. Offshore from Dublin IFSC Retail mortgage lending & banking in Ireland. Mortgage lending in UK Partner (30%) with Allianz in non-life insurer in Ireland Group CEO - David Went

6 Group Structure Irish Permanent Bank Retail mortgage lending & banking in Ireland. Group CEO - David Went Irish Life Retail Retail life, pensions, investments & savings in Ireland

7 zCompetitive market with c. 15 companies zConsolidation commenced zRisk, Pension and Investment Products zStrong demand for pension and investment products ã Demographics ã Economic growth zMarket growth of c. 25% per annum Irish Insurance Market

8 Retail Life Market - Distribution Mix* * Estimated Bancassurance grows from 0% in 1985 40% 10% 50%

9 Bancassurance - Why Successful? zClient relationship - strong zTrust - high despite criticisms zQuality of staff - well educated zProducts - simple and ‘bought’

10 Irish Life Retail - Distribution Mix 45% 24% 2% 18% 11%

11 Brokers Salesforce Branches Institutions Direct Customer Reach High end / middle Middle and lower middle Middle and lower middle Middle and lower middle High end Product Segment Investments Pensions Protection Investments/ Pensions Protection (mortgage related) Investments Pensions Protection (mortgage related) Investments Protection Competitive Levers Product pricing/features Service Local presence Segmentation Management process Productivity improvement Prospecting & sales process Product pricing Service Relationship Product pricing/features Irish Life Retail - Distribution Matrix

12 IL - Bancassurance Development zIrish Life - Tied Agent with First Active ã Exclusive provider ã Continual margin squeeze ã Discontinued on Merger z Irish Life - Institutional Provider ãUlster Bank, ACC Bank, TSB Bank, INBS, NIB ãVolume gains, lower margin ãWide experience of branch sales process

13 IP - Bancassurance Development zIrish Permanent Branches ã Good growth ã Higher margins but ã Limited product range ã Old sales model zMerger presented huge opportunity

14 IL&P Bancassurance Model zTransparent and level charges zAppropriate for risk profile of customer - “needs based” Product Range z Simple and jargon-free - “Crystal Mark” zRecognised brand to support products Shares made simple zStrong innovation skills

15 IL&P Bancassurance Model zCounter staff key zSales culture - focus on higher value sales not processing zTrained/qualified in protection, investment and pensions zSell majority of products zGenerate leads for consultants (high ticket sales) Sales Process

16 IL&P Bancassurance Model zStaff managed on integrated basis zSingle reporting line for bank staff and life consultants zIncentives based on branch product mix Management Process z Rigorous Activity Management

17 Irish Permanent Opportunity z Over the counter sales of new pensions product (PRSAs) zLarge depositor/savings base ã Offer alternative to low interest accounts ã Migrate to higher margin equity products Shares made simple zIncreased take-up of Irish Life mortgage protection

18 Bancassurance Progress Update z600 IP branch staff trained zTarget branch life sales growth: ã 100% over 3 years ã 40% in 2000 z Actual H1 2000 branch life sales up 59% z Mortgage protection - from 75% to 90% penetration z Record sales of “Scope” investment product

19 Growth Opportunities zVision to create ‘Best in Class’ bancassurer z Irish economy and demographics drive growth z Bid for TSB Bank ã Complementary activities ã Attractive customer base ã Significant competitive force

20 Competitive Threats? zConsolidation within Ireland z Direct selling ã Phone - 2% to 3% ã Internet - commodity products

21 IL&P - AssureBanker zMulti-access channels zBancassurance most profitable zClose to customers zContinued product innovation Vision - Number 1 in Personal Financial Services in Ireland

22 IL&P - Past Performance* zLife sales increased by 128% zBank lending increased by 145% zFunds under management increased by 88% zOperating Profit increased by 73% 4 Years to 1999 * pro-forma basis

23 IL&P - Current Performance Interim Results 2000 - Highlights zNew business up 23% in Life, 20% in Banking zRetail Life Sales up 42% zPersonal (non-mortgage) lending up 50% zIP bancassurance up 59% zOperating profit up 8% zTotal profit up 22%

24 Bancassurance in a Growth Economy David Went - CEO www.irishlifepermanent.ie Merrill Lynch - Banking & Insurance Conference 2000 London 10-13 October, 2000


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