Banks & Insurers form Exclusive/Strategic Alliance to Introduce more Products for Consumers!

In the past one month, we have seen increased corporate alliances among the banks ( or UT companies ) & insurance companies. you can expect more.

When the Banks' income from loans is affected ( interest rate dropping & economic downturn ), they will be more aggressive in pushing their Bankassurance to earn more commissions from the sales of other financial products, notably unit trusts & insurance..
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Reported in the Star: CIMB Wealth forms alliance with AIA
Tuesday March 31, 2009
http://biz.thestar.com.my/news/story.asp?file=/2009/3/31/business/3591419&sec=business

Tie-up will enable a holistic approach to financial planning

KUALA LUMPUR: CIMB Wealth Advisors Bhd yesterday formalised a 10-year strategic alliance with American International Assurance Bhd (AIA) to offer a wide range of differentiated and innovative insurance protection solutions.

CIMB Wealth Advisors chief executive officer Tan Beng Wah said the company’s 5,500 agents and financial planners would market insurance products underwritten by AIA and its subsidiary AIA Takaful International Bhd.

“It (strategic alliance) will enable both parties to leverage on their proven strengths and expertise in the areas of wealth planning and insurance protection solutions respectively to offer Malaysians a holistic approach to financial planning,” he told reporters after the agreement signing ceremony yesterday.

Tan said the company’s agents and wealth planners would now be able to offer customised financial solutions to clients by bundling some of the insurance products with other offerings such as unit trust funds, credit cards, structured products, wills and trusts services provided by the CIMB group.

He also said there was potential to cross-sell their products to benefit both organisations.

“It took us about a year to seal this partnership and last month we came out with a product offering that combines education with insurance,” he said.

He said CIMB would initially introduce about seven AIA insurance products.

AIA chief executive officer Khor Hock Seng said: “Through this alliance AIA will be able to tap into CIMB Wealth Advisors’ agency distribution strength and 35 regional offices to provide a full range of diversified insurance products.”
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Let's put things into perspective:

1. When two elephants fignt, pelanduks die in the middle. But When two elephants make love, the pelanduks ( mouse deers ) also die in the middle!

BUT that's a trend that cannot be reversed. So agencies must THINK & STRATEGISE, no point just complaining.

LKC: More urgent than ever, agencies must THINK OUT OF THE BOX & Re-engeneer our business model to not only survive, but can add tremendous value to our clients!
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2. There seems to be a conflict in the above news report - one one hand, the bank says that they want to provide "holistic financial PLANNING" but as you read further, the CEO starts to use wordings like "bundling insurance PRODUCTS" & "cross-selling". So are they going to do holistic PLANNING or just SELL more PRODUCTS to their customers?

LKC: Well, the 'split personality' is actually good news to agencies who can transform their business into PLANNING ( or PROBLEM-SOLVING model ) because at corporate level, the main concern is showing profitability to their shareholders. we are the ones who can adopt the HOLISTIC approach to PLAN comprehensively and SOLVE the PROBLEMS of our clients using INTEGRATED Problem Solving approach ( read more on this: http://www.lkcestateplanning.com/?i=additional_page&id=20 )
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Actually, in early March 2009, www.theedgemalaysia.com reported:

On Monday, RHB Capital Bhd — the holding company of RHB Bank — announced that the bank had executed a term sheet with AIA, which constitutes the preliminary statement of intentions of AIA and RHB Bank to establish a 10-year mutually exclusive bancassurance relationship in Malaysia.

Under the proposed terms of the bancassurance alliance, RHB Bank is to market, promote and sell conventional life insurance products developed by AIA via the bank’s network of offices, branches and other channels.

“This RHB Bank-AIA alliance is similar to the Public Bank-ING 10-year partnership that was cemented in November 2007. But the goodwill payment that Public Bank received from ING was a more substantial RM200 million with another €12.4 million (RM58.1 million) to be paid over the duration of the agreement upon fulfilment of the conditions set out in their agreement.
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So, this will be the kinds of new competitions you & your agents face when you your biz model is just PRODUCT-Focus or Single-Need Focus !!

Contact me if you feel it is time to STRATEGIZE your business model: leekheechuan@lkcestateplanning.com or visit:

http://www.lkcestateplanning.com/?i=business_opportunity