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Islamic Bancassurance and Wealth Management Azman Ismail

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Presentation on theme: "Islamic Bancassurance and Wealth Management Azman Ismail"— Presentation transcript:

1 Islamic Bancassurance and Wealth Management Azman Ismail

2 What is Bancassurance? Bankassurance – 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 Credit MutuelNatio Vie (BNP) Predica (Credit Agricole)Sogecap (Societe Generale) % of new business 60% of total premiums

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

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

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

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

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. 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

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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… Insurance, Trustee Services, etc Banking Services, Investment Services etc Client

25 Bankatakaful Model BANK INSU- RER

26 From Banka To IWM BANK INSURER OTHER

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

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

29 Islamic Concept of Wealth

30 Islamic Concept of Wealth Management

31 The Software CALCULATORSINTEGRATIONITERATIONGENERATIONANALYSIS FARAID HAJ EDU. RETIRE. ZAKAT TAX FARAID HAJ EDU. RETIRE. ZAKAT TAX

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

33 Wassalam


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