Insurance Committee

Areas of cooperation between insurers and banks - October 2000

The first meeting of AmCham Egypt’s new Insurance Committee was held on October 29. Chairman Michel Khallaf introduced and welcomed speakers Ian Viney, managing director of Commercial International Life Insurance Co., and Shayne Elliott, vice president and country corporate officer of Citibank Egypt.

Viney defined bank insurance as the process of delivering a variety of financial service products to an identifiable and approachable customer base linked to a financial services company. He said that some common product offerings in the field of "bancassurance" (merging banking and insurance) include consumer credit life insurance (mortgage or motor vehicle), retirement savings accounts (pure investment or risk wrapper), credit cards and individual savings accounts. The advantages of bancassurance, meanwhile, are cost-effective distribution, value-added product range and fee-based income, he said. The challenges, meanwhile, are dependence on another organization, merging two corporate cultures and disruptive acquisitions.

According to the second speaker, Elliott, "banking and insurance are both in the risk-management business, moving around with cash flows." From Citibank’s point of view, he said, there are three strategies to be implemented to reduce risks: first, reducing the costs of distribution – especially following a large merger – by closing branches; second, creating more high-value products at a premium price; and third, trying to grab the biggest share of what customers are planning to spend on financial services.

Through a full merger with an insurer, banks can achieve these goals, Elliott said. However, "the overriding motivation is to have the biggest share of the customer’s wallet."

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