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Sep
14
AIA and ICBC Agree On Strategic Bancassurance Partnership in China
Posted on Sep 14, 2010 by Sergio Ulloa (G+)
American International Assurance Co. Ltd. (AIA) is set to form a long-term and strategic bancassurance partnership with the Industrial and Commercial Bank of China (ICBC) with the aim of becoming a more prominent player in the Chinese insurance market. The term 'bancassurance' is often used to refer to the Bank Insurance Model ('BIM'), which describes the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank's sales channels, including branch offices, in order to sell insurance products. Bancassurance allows the insurance company to maintain smaller direct sales teams as their products are marketed and sold through the bank to customers by bank staff. Replacing the role of an insurance salesperson, bank staff and tellers become the point of sale and contact for the customer. Bank staff are advised and supported by the insurance company through product information, marketing campaigns and sales training. AIA, the life insurance operations in Asia of American International Group Inc. (AIG), and Beijing-based ICBC, have reached a working agreement to set-up a bancassurance platform. The purpose of which, according to a recent statement by Mark Tucker, Group executive chairman and chief executive-designate of AIA, would be to "further strengthen its business developments in China and provide innovative products and services to meet the protection and savings needs of the people of China." As set out in the bancassurance agreement, both companies will endeavour to develop systems covering sales and marketing under this platform, further grow direct marketing, telemarketing and wealth protection planning, whilst continuing pushing for product innovation, service quality and at the same time, strengthening its agency force. ICBC, purportedly the largest listed bank in the world by market capitalisation, deposits volume and profitability, will work with AIA to continue developing its banking businesses including bank deposits, asset and cash management, investment banking, internet banking, credit cards, customer services, fund-raising, credit lending and staff training. According to analysts and recent local media reports AIG is looking to spin off AIA through a listing in the Hong Kong stock market, after the collapse of negotiations with Prudential on the sale of AIA. AIA has approximately 320,000 agents and 23,500 employees across 15 branches geographically dispersed across Asia, and in excess of 23 million policies in-force in the Asian region. It also possesses the bancassurance expertise on a range of models applied across several markets in Asia. Companies mentioned: AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
AIA
AIA is a Hong Kong-based life insurance company doing business across Asia that has been in business since 1919. They service over 20 million policies through 23,000 employees and 300,000 agents throughout markets in Asia, including; Vietnam, Thailand, Taiwan, South Korea, Singapore, Philippines, New Zealand, Malaysia, Macau, Indonesia, India, Hong Kong, Mainland China, Brunei and Australia.
ICBC
By the end of 2008, ICBC had altogether 385,609 employees and 16,386 domestic and overseas branches, providing extensive and high-quality financial products and services to 190 million personal clients and 3.1 million corporate clients.