RGA Welcome

Reinsurance Group of America, Incorporated (RGA) is a recognized leader in the global life reinsurance industry. RGA provides clients with life reinsurance, risk management, facultative underwriting, product development and distribution, and capital-motivated reinsurance services. RGA is an industry leader in the United States, counting more than three-quarters of the 100 largest life companies as clients. RGA has successfully exported their extensive experience in North America to other locations, adapting proven concepts to meet the needs of their client companies around the world.

C F Effron Company LLC, is a boutique consulting firm specializing in the insurance industry and is a recognized leader in the bank insurance industry. We conduct leading market research in the bank insurance field.

RGA has hired C F Effron Company LLC to conduct a number of surveys in the international market.

RGA International

RGA International is responsible for expanding RGA's international operations into those new markets that provide the best opportunities for growth and profitability. They tailor their mix of products and services to the unique demands of each of these markets, allowing RGA to export the same flexible approach that has served them well in their existing markets.

RGA International serves global clients through its headquarters in Toronto and subsidiaries or offices in Australia, China, Hong Kong, India, Japan, Ireland, Malaysia, Mexico, Poland, South Africa, South Korea, Spain, Taiwan and the United Kingdom.

RGA South Africa

RGA SA supports all lines of individual and group life reinsurance business with both traditional and non-traditional solutions, with treaties in place with all the major direct life insurance companies in the region.

RGA SA’s presence in the financial services centres of Johannesburg and Cape Town provides a national footprint and ensures localized support to clients based in and around these cities.

Surveys

RGA SA identified Bancassurance as a key business development area and wished to expand its knowledge of this field as well as assist its clients internationally with focused research. RGA SA conducted a first of its kind survey in South Africa for both bancassurance and credit life business. The 2007 Bridging the Cultural Divide between Banks and Insurers conducted by C F Effron along with the 2006 survey ''2006 Giving Credit Where Credit is Due'' forms a part of RGA’s international benchmarking exercise in identifying best practices and reviewing and comparing businesses across international markets.

2007 South Africian Survey

I would like to thank RGA and RGA South Africa for their support and interest in working together to understand the differences between bank and insurance cultures and their efforts to help define a more robust common culture. It has been a pleasure working with so many talented and dedicated people and I am looking forward to continuing the dialogue as we find new and innovative answers to overcome the obstacles that follow in this report and ''Bridge the Cultural Divide.''

2007 South Africa Study—the First of its Kind

This Study explores the cultural and perceptual issues that divide banks and insurers. It uses a statistical “gap analysis” technique to quantify the cultural issues; therefore using hard evidence to uncover and explore the qualitative issues banks and insurers must tackle to achieve success.

The Study concurrently examines bank and insurer views; therefore it is a reflection of both of their opinions about insurance distribution, marketing & sales, product design, administration & operations, effectiveness and risk & profitability. The findings emphasize major gaps between banks and insurers in their satisfaction and evaluate the elements needed to optimize their joint distribution relationships.

The study is based on two questionnaires; one submitted to life insurance companies and another to banks. The questions are essentially the same, differing only in recognizing the institution’s distinctive role in the bank-life insurer relationship

Questions encompassed life, annuities disability capital, and income products, dread disease, impairment and coupon-type execution only products such as credit life, funeral and hospital cash insurance.

The Study shines a spotlight on the bank/insurer relationship to determine clues on behaviors that lead to success. It also identifies weaknesses in the relationship. This Study, moreover, highlights useful information in finding ways to surmount the obstacles between banks and insurers, preventing them from functioning in an optimal manner. This Study only focused on business transacted within the life insurance industry.

South Africa Marketplace

To establish meaningful context, the Study analyzed participants’ share of the bank and insurance markets. One of the challenges in conducting this Study has been the different ownership models that exist between banks and insurers. Believed to influence the meaningfulness of the analyses, results are shown overall as well as split according to affiliation where these results are deemed significantly different.

Key Findings 17 insurers participated in the survey. 7 banks participated in the survey. 54 % of the insurers and 71% of the banks use a combination of distribution methods. 4 out of the 7 banks own an insurer, while 12 of 17 insurers are not owned by banks; 3 of the banks and 5 of the insurers have exclusive arrangements. 13 unique insurers and 6 unique banks participated. If a bank’s agency sales force is dedicated to one insurer and sells that insurer’s product exclusively, it is considered an agency force. If the bank’s agency sales force sells more than one insurers’ product, it is considered a broker. A majority of the market and in excess of 70% of the bancassurance market in South Africa is believed to be represented in this Study. For the purposes of this Study, the term bank includes traditional banks, car financing companies and mortgage origination companies. Large and small banks participated, each representing 43% of responses. The small- to mid-sized insurers were the predominant participants, representing 53%of responses.