effective distribution strategies to boost produc t ivity and sales margerita boskovic
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EFFECTIVE DISTRIBUTION STRATEGIES TO BOOST PRODUC T IVITY AND SALES Margerita Boskovic DUNAV Insurance Company. Agenda: Structure of channels developed on the Serbian market Focus on profitable channels and actions in that m a tter Balanced development of internal and external sales - PowerPoint PPT PresentationTRANSCRIPT
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.Vienna September 2009.
EFFECTIVE DISTRIBUTION STRATEGIES TO BOOST PRODUCTIVITY AND SALES
Margerita BoskovicDUNAV Insurance Company
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Agenda:
1.Structure of channels developed on the Serbian market
2.Focus on profitable channels and actions in that matter
3.Balanced development of internal and external sales
4.Differences between domestic market and foreign market of insurance via distribution channels
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
...and the most significant indicator is the continous growth since year 2004.
2004 2005 2006 2007 20082008 Mill.EUR
TrendBill. RSD
Global premium income 22,6 34,7 38,3 44,8 52,2 580 Life Premium 1,7 3,3 4 4,9 6,3 70 Share in Global premium 7,4% 9,5% 10,6% 11,0% 12,2% 12,2 Non Life premium 20,9 31,4 34,3 39,8 45,8 508,9 Insurance density € 38 € 55 € 65 € 77 € 80 € 80 Life insurance density € 3 € 5 € 7 € 8 € 10 € 10Premium share in gross domestic product 1,6% 2,1% 1,9% 1,9% 1,9% 1,9%
Estate 30,8 46,4 56 70,6 84,8 942,2Net assets 15,6 18,6 20,7 24,7 25,3 281,1Technical reserve 11,5 22,9 28,9 39,5 51,5 572,2 Number of insurance companies 40 19 17 20 24Number of employees 5407 7283 7876 9697 11713
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
AMOUNT OF INSURANCE PREMIUM
DUNAV SERBIA DUNAV SERBIA
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
TYPES OF INSURANCE PRODUCTS IN SERBIAN MARKET
Serbia
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
PREMIUM STRUCTURE
Gross premium by types of insurances in the first trimester of 2007. and 2008. quarter I
Property Motor
Casco Other non-life insurance
Life Insurance
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
•Our financial sector did not operate with complex financial instruments, and was not plagued with so called toxic assets.
•IMF forecast: Serbia will record 2% of GDP decrease in 2009;
•Activities in the next period should be focused on: development and improvement of risk management functions UW developing in the selling policies process strengthening corporate management, that requires education of insurants and improved sales network, also all kind of distributive channels
FINANCIAL CRISIS IMPACT ON THE SERBIAN INSURANCEMARKET
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Primal strategic directions which contain all of the standard and nonstandard products:
creating packages - better image of company that offers an integrated product and servicesImprovement of cross-selling and up-selling techniques of selling – better focus the on clientdeveloping of distribution channels – to concentrate on comparative advantages
CRISIS IMPACT ON INSURANCE - DUNAV
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Agenda:
1.Structure of channels developed on the Serbian market2.Focus on profitabile channels and action in that matter3.Balanced development of internal and external sales4.Differences between domestic market and foreign market of insurance via distributive channels
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Sales Channels according to Legal Act:
• INTERNAL – sales force • EXTERNAL:-Brokers - 32-Legal Entities - 65-Physical Entities - Enterpreneurials - 123-Banks - 13-Tourist Agency - 1-800 Physical Entities licenced in insurance. Additionally, insurers tend to develop alternative channels essential for segmentated clients, various by structure and types of sales and consistant with the needs and comfort aproach to the client.
STRUCTURE OF CHANNELS DEVELOPED ON THE SERBIAN MARKET
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
DISTRIBUTION CHANNELS
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Elements of encouragement ambient in insurance:a)Tax deductions in part that is in correlation with the development of life insurance;b)Expanison of distributive channels - sales force by legal changes that are expected in the following period.
Main goal of these changes is to increase the number of employees, it is assumed that 5000 people can be educated in life insurance sales, therefore this can be practised as an additional business (current legal stand inhibit insurers from having any additional practise).
TRADICIONAL CHANNELS
INTERNAL – SALES FORCE
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Agenda:
1.Structure of channels developed on the Serbian market2.Focus on profitabile channels and action in that matter3.Balanced development of internal and external sales4.Differences between domestic market and foreign market of insurance via distributive channels
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Dunav evenly developes external and internal network guided by the following principles:
1.Maximum usage of advantages in internal network expertise (UW capacity, claim adjustment, extended network), with the concern on profitabillity of internal network.2.Operating with large number of external network sales – conditioned by the structure and client demands as well as actions on the market;3.In the process of Company transformation focus has altered from product to client. Client segmentation has conditioned defining sales channels determening which is the best way of aproaching a certain client category.
FOCUS ON PROFITABLE CHANNELSAND ACTION IN THAT METTER
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
• Internal network – 30% in the MOT area and 50% in other types of nonlife insurance• Main objective is to increase sales via internal network using the following tools:Sales plans and defining product mix (for empolyees) Cross sell tehnique, education Recuperation of businesses that maintain MOT’sInvesting in our own capacity, in developing our front desk sales, instalation and purchasing new Tehnical inspections (MTPL) of the highest standards
Maximum usage of advantages in internal network expertise
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
DISTRIBUTION CHANNELS
Client Segmentation and distributive channels eligable for sales:
Individual segment Small and medium businesses segment Large Commercial Clients
“Dunav” Sales network “Dunav” Sales network “Dunav” Sales networkMOT’S Independent Agents Independent AgentsIndependent Agents Brokers BrokersMunicipal utilities Leasing companies Associations Associations Travel agencies Call centers Call centers Internet Internet Banks Banks Mobile phones
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Individual Small & Medium Businesses
Large comercial utilities
Products / Segment
Automobile liability insurance
Hard Asset
General liability
Accident
Travel insurance
Life insurance
Pension insurance
Health insurance
Product liability
Farming insurance
Marine insurance/Cargo
Machine breakage insurance
Group Accident insurance
Group Health isnurance
Group Life insurance
Group Pension insurance Main product
Aditional product
Periodical product
Unnecessary product
DISTRIBUTION CHANNELSPRODUCTS BY SEGMENT
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Product importance Products Sales network. "Dunav"
Vehicle Inspection
Agents (independent)
Brokers Companies/Associations
Leasing companies
Municipal Utilities
Banks Call centres
Internet Travel agencies
Very importantAutomobile liability insurance
Very important Estate
Very important General Liability
Medium important Accident insurance
Travel insurance
Less important Life insurance
Less important Pension insurance
Less important/out Health insurance
Medium important Product liability
Very important Farming insurance
Medium important Marine insurance/Cargo
Medium importantMachine breakage insurance
Very important Group Accident inurance
Less important/out Group Health isnurance
Medium important Group Life insurance
Medium important Group Pension insurance
Main channel
Additional channel
Periodical channel
Future chanell
Unnecesary channel
DISTRIBUTION CHANNELS AND PRODUCTSBY SEGMENT: INDIVIDUAL
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Product importance Products Sales network. "Dunav"
Vehicle Inspection
Agents (independent)
Brokers Companies/Associations
Leasing companies
Municipal Utilities
Banks Call centres
Internet Travel agencies
Very importantAutomobile liability insurance
Very important Estate
General Liability
Very important Accident insurance
Medium important Travel insurance
Medium important Life insurance
Less important Pension insurance
Less important/out Health insurance
Product liability
Medium important Farming insurance
Medium important Marine insurance/Cargo
Medium importantMachine breakage insurance
Group Accident inurance
Group Health isnurance Group Life insurance Group Pension insurance
Main channel
Additional channel
Periodical channel
Future channel
Unnecesary channel
DISTRIBUTION CHANNELS AND PRODUCTS BY SEGMENT: SMALL AND MEDIUM BUSINESSES
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Product importance
Products Sales network. "Dunav"
Vehicle Inspection
Agents (independent)
Brokers Companies/Associations
Leasing companies
Municipal Utilities
Banks Call centres
Internet Travel agencies
Very importantAutomobile liability insurance
Very important Estate
Very important General Liability
Accident insurance
Travel insurance
Life insurance
Pension insurance
Health insurance Medium important Product liability
Very important Farming insurance Medium important Marine insurance/Cargo Medium important
Machine breakage insurance
Medium important Group Accident inurance Less important/out Group Health isnurance Medium important Group Life insurance Medium important Group Pension insurance
Main channel
Additional channel
Periodical channel
Future channel
Unnecesary channel
DISTRIBUTION CHANNELS AND PRODUCTSBY SEGMENT: LARGE UTILITY USERS
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Agenda:
1.Structure of channels developed on the Serbian market2.Focus on profitabile channels and action in that matter3.Balanced development of internal and external sales4.Differences between domestic market and foreign market of insurance via distributive channels
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
SHARE OF EXTERNAL SALES CHANNELS IN COMPANIES GROSS PREMIUM
External sales channels gross premium: 7.353.358.000 din.Companies gross premium: 15.142.985.426 din.
External sales channels gross premium: 7.353.358.000 din.Companies gross premium: 15.142.985.426 din.
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
What determens insurance market in Serbia is high presence of Motor third personl liabillity (MTPL) – 30% of the total premium is generated from MTPL.
Sales structure of MTPL:• 70 % via external sales channels – agencies and tehnical inspections (MOT)• 30% is sold via internal network.
BALANCED DEVELOPMENT OF INTERNAL AND EXTERNAL SALES
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
The only way in conducting a concept of enhancement market share and cost decline is investing in our own capacity:• Front desk salesFront desk invesments Development of Precompensation system• Sales channels of „Dunav Auto“Recuperation of businesses that maintain MOT’s Instalation and purchasing of new Tehnical inspections in cooperation with „Dunav Auto“
BALANCED DEVELOPMENT OF INTERNAL AND EXTERNAL SALES
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Agenda:
1.Structure of channels developed on the Serbian market2.Focus on profitabile channels and action in that matter3.Balanced development of internal and external sales4.Differences between domestic market and foreign market of insurance via distributive channels
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
•Brokers – relatively new channel on Serbian market•Problem characteristics of MTPL – MOT•Banking insurance is used for non-life products selling
DIFFERENCES BETWEEN DOMESTIC MARKET AND FOREIGN MARKET OF
INSURANCE VIA DISTRIBUTIVE CHANNELS
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
•Brokers – relatively new channel on Serbian market
Preferences: Rarely extrapole for physical entities Mostly clients are taken by the insurer
DIFFERENCES BETWEEN DOMESTIC MARKET AND FOREIGN MARKET OF
INSURANCE VIA DISTRIBUTIVE CHANNELS
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
• Concerning Tehnical inspections
obsolete Motor pool (around 2 million vehicles – average age of the vehicles is 12 years)MOT’s are conducted every year appliance of the new legal act that standardise the rules of tehnical inspections (MTPL)
DIFFERENCES BETWEEN DOMESTIC MARKET AND FOREIGN MARKET OF
INSURANCE VIA DISTRIBUTIVE CHANNELS
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
It still in its conception allthough in the end of the year 2006. it was enabled by an legal act for the banks to do business in presenting insurance. Characteristics and variety in relation to the foreign market:a)This sales channel is more succsesfull in non life insurances and thereby is uprising;b)Life insurances are sold less trough this channel for multiple reasons:•Low level of developing in life insurance due to historical reasons (inflation, war, etc);•Life insurance policy is not a liable element with credit products.Productivity trough banks sales is 2 times larger in relation with the traditional agent network.
• Bankaassurance
DIFFERENCES BETWEEN DOMESTIC MARKET AND FOREIGN MARKET OF
INSURANCE VIA DISTRIBUTIVE CHANNELS
Insurance sales via Distributive channels – „Dunav Osiguranje“ a.d.o.
Vienna September 2009.
Asumption for good cooperation between Banks and insurers is contribution and benefit for both sides. Foreign insurers in cooperation with foreign banks that are present on the domestic market use the same mechanism and similar is with the leading domestic insurance „Dunav Osiguranje“.
Partner Provides Gain
Bank• Brand• Client base/distribution• Complementary products
• Cross sales income• Additional barrier of client exiting
Insurer • Expertise in insurance and damage costs• Capacity in risk bearing
• Brand and client base access • Margin on the core business
Client • Loyalty to the Brand• Keeping record of other products
• Adapted products that provides magnitude for money from a reliable provider of services
DIFFERENCES BETWEEN DOMESTIC MARKET AND FOREIGN MARKET OF
INSURANCE VIA DISTRIBUTIVE CHANNELS