Presentation on theme: "Islamic Bancassurance and Wealth Management"— Presentation transcript:
1 Islamic Bancassurance and Wealth Management Azman Ismail
2 What is Bancassurance? Bankassurance Allfinanz Merge between banking and insuranceAllfinanzAll financial services under one roofFinancial supermarket
3 What lead to the growth? Main reason Regulatory barriers between banking and insurance have diminishedResults in more “friendly” environment
4 Other reasons… Banks =>one method to increase deposits Insurers => alternative modes of distribution due to high agency costsInsurers own and control relationships with customers.Low expense ratioCross selling of services
5 Regulation & Market Leaders USAFinancial Services Modernization Act of 1999CitigroupUKFinancial Services ActHSBCFrancemost significant developmentCredit AgricoleMalaysiaBAFIA 1989 => banking, finance company, merchant banking, discount house and money-broking businessesMaybank
6 USA Citigroup 100 million customers 100 countries Total assets of $ 800 Billion and total revenues of $ 90 Billion15% contributed by the insurance16% of income thru’ insurance.
7 Citigroup’s subsidiaries Citi BankSalomon Smith Barney (CitiFinancial)SSB Citi Asset Management GroupSalomon Brothers Asset Management,Smith Barney Asset ManagementCitibank Global Asset Management.Travelers Property Casualty and Travelers Life & Annuity
8 Travelers Total assets > $ 50 Billion Total annual revenue >$ 10 BillionNet 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 profitsHSBC Insurance Holdings => back office operationadministration, 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 Mutuel1970198019902000
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 employeesPolicies > 5 million,Policyholders > 3.5 million.
14 Malaysia Maybank From Bancassurance to Islamic Financial Supermarket Wealth Management
17 Between Bancassurance and Agency System WEALTHMANAGEMENTBanksFINANCIALPLANNINGFinancialPlanners
18 From Transactional Banking To Wealth Management PrivateWealthManagementPrivate BankingPreferred/Priority BankingTransactional Banking
19 TrendsIn 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 portfolioCitibank, 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 2006Private 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?