aegon.com

Bancassurance Retail Strategy Pitfalls in choosing the right approach to a lasting marriage

Gijs Jeuken CEO Aegon Life Ukraine

CIS Bankers Conference – Kiev June 2013

Overview of Aegon worldwide

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AEGON at a glance

25,000 EMPLOYEES

PENSIONS ASSET MANAGEMENT

+20 markets THROUGHOUT AMERICA, EUROPE AND ASIA

Life insurance

Underlying earnings before tax in 2012

EUR 1.8

billion

Revenue-generating investments

EUR 458

billion1

1) As per Dec 31, 2012

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Aegon  CEE  

Aegon Presence in CEE

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Focused organization with solid financial position

€ millions 2012 2011 %

Underlying earnings before tax 1,787 1,522 +17%

Net income

1,571 872 +80%

New life sales 6,730 5,700 +18%

Total gross deposits (excl. run-off businesses)

39,470 31,690 +24%

Total spending on goods and services 1,34 1,48 -9,5%

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Banc assurance partnerships

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Aegon Life Ukraine

Main partners Products

VTB bank cash loans

Credit Agricole Bank cash loans

Oschadbank mortgages

Creditprombank mortgages

Khreschatyk mortgages

Raiffeisen Bank Aval mortgages

Credit Dnepr Bank cards

Finances&Credit mortgages

Erste Bank mortgages

§  The policies issuing process for cash loans are automatically provided by banks employees, §  Due to having the biggest regional agent network Aegon is able to provide insurance for mortgage

clients.

Bancassurance – the revenue stream of the future

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Structure of the banks’ income – worldwide trends

In mature markets, commission from insurances sales is a major income source for banks

41%

Emerging markets

Pre-mature (new)

markets Mature markets

Loans

Current accounts & deposits

Investments

RU, UA, SM, BH, AL, KO,

BY

PL, CZ, SK, HR, SL HU,

RO, BG

A, D, F, E, B, S, CH, I,

DK

3,2% 6,5%

Insurance

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Bancassurance - the answer to all players’ needs

Banks

§  New income source to compensate for the decreasing margins and slowing down of the

lending activities;

§  Long term client retention;

§  Attracting new clients from competitors;

§  Innovation and differentiation;

Clients

§  Financial solutions for long term objectives;

§  Trustworthy, professional financial consultancy;

§  One stop shop

Insurers

§  Access to quality portfolio of clients and to professional sales force;

§  Long term stability and growth

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Ukrainian market developments

Crisis not over yet…..

§  With pressure on costs and deposit inflows

§  Consumer trust being low

§  Moderate levels of lending

….and banks having cut away some upside

§  by reducing costs in staff, overhead and G&A

§  no longer investing in being distinctive or ahead

§  limited resources in IT, Strategy and Marketing

Insurers

§  consolidating in the Life Insurance sector

§  dichotomizing in the non-Life sector

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Aegon banc assurance frameworks

Partnership

Bank Insurer

Clients

Products

Product

portfolio

Joint venture

Capital Capital

Products

§  A balanced long-term relationship between bank and insurer §  Different models needed for different perspectives

Ø  Depends on partner’s strategic approach, commitment, duration, market practice and regulatory framework

Bank Insurer

JV

Clients

Spain Poland Hungary Romania Romania* * AEGON’s JV with Banca Transilvania changed into a partnership as per January 2009

Turkey

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After sales support of bancassurance clients

working hours of contact center

MON-SAT 08:00 – 21:00

HOTLINE 0 800 500 525

SKYPE aegon_life

EMAIL (SERVICE DESK)

client_service@aegon.ua

FEEDBACK FORM www.aegon.ua

PERSONAL ACCOUNT my.aegon.ua

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The right solution for each client segment

•  Private banking: Ø  Multifund Single Premium

Ø  >30 investment funds available Ø  Successful model and product available in Poland, Hungary and in Romania

§  Individuals: Ø  Guaranteed savings product, regular premium Ø  Simple investment product, low risk investment strategies Ø  Successful model and product available in Romania

§  Explore the future: Ø  Address mass clients from Call Centre, with easy-to-sell solutions Ø  Successful model and product available in Poland, product available in Romania

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§  These are the times where Banks are in a strong negotiation position, but it is not only on getting the price down ! ►  Choose your partner with same share of mind

►  Negotiate soft benefits for yourself (training, marketing, product workshops)

§  Long lasting relationships start open ended – avoid too much administrative burden on tenders – look at profit sharing as a solution to build longer term trust ►  Insurance companies want to share the future only if they can be part of it ►  Healthy competition is in the interest of all stakeholders (clients, banks and IC)

§  Keep the IT systems separated as much as possible, do not forget to spend the right amount of time (and sometimes money) here ►  This is the bottleneck of growth, trust and profit

§  Let insurance companies do the work for you in their core business ►  Expert advice for higher end customers

►  Marketing and motivation of in-branch staff

§  Giving access to client data is a win-win and will give additional yield over time ►  As products are complimentary ►  Savings, endowment and Unit Linked sales require investments all made by the insurer already

§ 

Pitfalls in choosing your partner

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Bank

Clients

Employees

Together, we create value for all your stakeholders

§  Commission + target bonus §  Staff performance increase through trainings §  Long term client retention §  No risks, no costs §  Tailor-made front-end system §  Personalized reporting tools

§  Professional & trusted financial consultancy §  Complete financial solutions under one roof §  Wide range of choices §  Easy to understand and transparent products

§  Bonuses/commissions without costs for Bank §  Professional development §  Motivation (incentives, contests) §  Performance recognition (clubs)

aegon.com

Thank you