Abstracts » Business

Raising aspirations

Article Abstract:

Banks looking for growth opportunities should consider entering the insurance business, particularly life insurance. According to a study, the size of the markets for insurance and investments is about 150% of the present retail banking market. However, many banks treat insurance as merely a subordinate additional product or incremental fee-generating business. This view should be abandoned because traditional banking is already experiencing dwindling profits and market share erosion. Those banks intent on mining their insurance potential should emulate successful European bancassurers. They should ensure senior management commitment, develop a properly trained generalist sales personnel working with bank branches, offer simplified products, and provide a sufficient incentive system for branch managers and sales staff.

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Crossing the divide

Article Abstract:

Banks are increasingly interested in the insurance business as a new source of revenue and a means for strengthening customer relationships. Should the remaining legal barriers separating banking and insurance be eliminated, the banks that will enter the insurance market could generate at least $1 billion in additional annual revenues. Banks are well-positioned to compete in this market given their frequent customer contact, trust-based customer relationships, detailed customer information, and established customer relationships with households overlooked by the life insurance industry. These strengths could give banks competitive advantages, including customer convenience. While the arrival of banks presents a threat, insurance companies are recognizing the potential benefits of bank alliances.

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Jump starting insurance sales

Article Abstract:

Banks can improve their marketing efforts by offering innovative products such as deep discount insurance, one-hour applications processing and insurance policies index to pay raises. Retail insurance has the potential of becoming one of the three or four most important businesses for banks. It could generate for banks at least $3 million to $5 million for every $1 billion in assets. To succeed in this market, bankers will need to play closer attention to the unique requirements of the market and to develop suitable marketing solutions. An effective marketing strategy involves market segmentation oriented toward selling insurance rather than bank services, value propositions that motivate customers to buy insurance from the bank, and an improved distribution system.

Methods, Marketing, Bank marketing

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