DOI: 10.5817/FAI2016-2-2 No. 2/2016
19
Evaluation of Bancassurance Functioning in Selected Countries
of the Financial Groups Erste Group Bank and UniCredit Group
Silesian University in Opava
School of Business Adm
E-mail: preckova@opf.slu.cz
Abstract: This paper will evaluate the current state of cooperation between banks
and insurance companies as well as internal integration of bancassurance products in
financial groups Erste Group Bank and UniCredit Group. The evaluation is performed
as of May 1, 2016. There shall be selected six countries which are part of the region
Central and Eastern Europe, namely the Czech Republic, the Slovak Republic,
Hungary, Romania, Croatia and Serbia. This paper aims at ascertaining whether or
not there are similarities in how bancassurance functions in selected financial groups
and countries. This paper shall apply a qualitative research approach. Bancassurance
shall be analyzed, compared and evaluated from the viewpoint of integration of
financial groups as well as of bancassurance products. A critical analysis of literature
available will frame the field of bancassurance models of cooperation and
bancassurance functioning. This review will provide a theoretical base for evaluating
the level of cooperation between banks and insurance companies and for evaluation
an internal integration of bancassurance products. The theoretical base shall be
compared with the current bancassurance practice within financial groups and
countries. To evaluate bancassurance practice, this paper shall use data available on
web sites, financial and annual reports of financial institutions. The qualitative
research shall contain a detailed analysis, sorting and comparing of set theoretical
bases. Finally, this paper shall ascertain which characteristics are similar and which
are different in integration of financial groups and bancassurance products.
Keywords: financial group, insurance group, bancassurance, bancassurance product
JEL codes: G21, G22
Introduction
Bancassurance is a quickly developing sales channel, which is a result of globalization
and deregulation trends in the banking and insurance sector. All insurance companies
based in Central European countries started to develop their distribution networks in
the 1990s. The extent of their success was evaluated by their market share which
Strategists in supranational corporations estimated that this pace of growth would
slow down after 10 years and that the growth of production would stagnate and that
it would be necessary to find other distribution channels which will help premium
with bancassurance for more than forty years, some other countries have just started
discovering this trend. Especially countries in the Central and Eastern European
20
region (hereinafter referred to as CEE) might experience a significant future income
from this distribution channel.
This paper aims at ascertaining whether or not there are similarities in how
bancassurance functions in selected financial groups and countries. This research
shall be conducted for two financial groups, namely Erste Group Bank (hereinafter
referred to as EGB) and UniCredit Group (hereinafter referred to as UCG). The
research is primarily focused on the region of CEE. The research will evaluate
countries located in the CEE region in which the financial groups operate: the Czech
Republic (CZ), Slovakia (SK), Hungary (HU), Romania (RO), Croatia (HR) and Serbia
(RS). Similarity in bancassurance functioning is evaluated by the level of integration
of financial groups (a bank and an insurance company) and by the level of integration
of financial products (a bank product and an insurance product). This is the reason
that this paper primarily introduced the theory of bancassurance from the viewpoint
of property connections and from the viewpoint of concluding strategic agreements
between banks and insurance companies as well as of integration of banking and
insurance product. There shall be set theoretical bases, which will consequently be
compared with a current bancassurance practice within financial groups and
countries.
The crucial part of the qualitative research will be comparing theory and practice. The
analysis of bancassurance functioning in practice requires that information and data
are collected from the financial institutions which is extremely demanding and
difficult. Neither banks nor insurance companies publish information about
bancassurance, as a distribution channel, in an extent that might be anticipated
supposing how much theory knows about this issue.
The bancassurance phenomenon that is unquestionably one of the most important
trends in the evolution of the European financial services industry can be considered
as a consequence of the progressive deregulation of the regulatory barriers to
(2008) consider creation of financial groups in the Czech Republic as a trend which
does not representa bankbusiness
risks of both sectors as well as the whole sector of financial services which
may, as a consequence, bring more stability to economic systems and better security
to clients. On the other hand, they also mention that bank-insurance is a very specific
hinderer of further integration and further development of bancassurance products
may be dependent on an increasing number of wealthier clients who prefer more
Bancassurance is an obvious example of convergence between banks and insurance
companies. It is associated with the idea that one-stop shopping may be a crucial
point in the selling proposition of modern insurance companies. There are several
reasons why insurance companies may be interested in bank-led distribution
channels. Insurance companies may hope to exploit the important competitive
advantage of banks, consisting of the wide customer base, the many available
branches and the stickiness of the relations between banks and clients, and at the
21
same time save on the large training and maintenance costs associated with a
captive distribution channel. (Beltratti and Corvino, 2008)
Bancassurance is a relatively new type of services and operations which will probably
further develop in the future. It is important to consider whether bancassurance has
bancassurance may be a step backwards. The main disadvantages may be found in
simplification and unification of insurance products. Bancassurance is present in every
developed economy and it opens up an immense space for a non-price competition
Development of bancassurance in individual European countries depends on various
lt with by
considered proven and applicable in other countries and regions on the international
scale. It also seems to be important to mention that the development of
bancas
The common denominator of all available definitions of bancassurance is the
structured sale of combined financial products to targeted groups of clients. A very
high effectiveness can be found in internally interconnected bancassurance product
which represents an additional utility value for the end user of such a product as it is
tailored for him based on what t
selling bancassurance products, the more the insurance product is rooted into the
pillar product of a financial institution, the more it will become its organic part and
nd
understood incorrectly. According to him, bancassurance should not be confused with
what should be referred to as cross-selling. The sale channel of bancassurance can be
understood as a channel of selling the financial product which is internally integrated
with the financial product and it brings an addition utility value for the end client of
the financial institution. The insurance product is sold as a collective policy. An
insurance company and a financial institution conclude a collective policy agreement
which directly specifies conditions of the policy including insurance conditions.
Banks tend to be the most sought-after partners for sales of insurance products.
Banking and insurance sector are two dominant parts of the financial system and
they complement each other. In general, there are not as many banks as there are
insurance companies willing to cooperate. Around the world, there are many
integrated groups and strategic partnerships which, on a national level, do not allow
partners cooperate, at least not in a larger extent, with other subjects, no matter
22
Integration of insurance and banking sector and also of other financial services takes
place not only in the area of product sales but also in the area of approximation and
property integration of financial institutions. For this reason, we sometimes talk about
a creation of financial conglomerates which may have very various structures.
Integration of financial institutions can be in the form of a total integration, a partial
integration with a parent universal bank, an integration with a banking or insurance
parent company or a holding structure. The total integration is the highest form of
integration. It means an integration of various financial services within one company.
All activities are then financed using one capital. This form of integration is more or
less constructed by theory. A partial integration with a parent universal bank leads to
an organization of financial conglomerates in which the universal bank covers
commercial and also investment banking. Utilizing daughter companies, these
conglomerates offer other financial services including insurance policies. Integration
with a banking or insurance parent company is a type of a structure in which the
parent company owns, either completely or partially, its daughter companies and
through these, it provides clients with financial services (investment banking,
insurance policies, other financial services). Finally, a holding structure is a type of
organization in which an independent parent company owns all or most shares in
independent daughter companies and each of them offers independent financial
1 Methodology and Data
This paper aims at ascertaining whether or not there are similarities in how
bancassurance functions in selected financial groups and countries. This paper uses a
qualitative approach to ask: What sort of integration is present in financial
groups and countries? What is the level of internal interconnectedness of a
bank product with an insurance product in financial groups and countries? Is
there a similarity between the type of integration and the level of internal
interconnectedness of bank and insurance product in these financial groups
and countries?
In order to be able to evaluate the integration of the financial group, the sorting
method created by used. This paper focuses on
and evaluates bancassurance (not assurfinance) from the perspective of internal
evaluated based on these characteristics: Is there a general contract for the
bancassurance contract? Does arranging an insurance policy depend on arranging of
the insurance product? Are there discounts on insurance products granted for clients
of the bank? To answer these questions the following analysis was performed:
In the first part of the research, this paper evaluates property structures of EGB and
cooperating insurance companies in selected countries. Because EGB has concluded a
strategic partnership with VIENNA INSURANCE GROUP AG Wiener Versicherung
Gruppe (hereinafter referred to as VIG), the partnership cooperation between EGB
and VIG is specified. Data was taken from the web sites and annual reports of
financial institutions as of 2015.
23
The second part of the research evaluates the property structure of UCG and
cooperating insurance companies. UCG concluded a strategic partnership with ERGO
Group (hereinafter referred to as ERGO). For this reason, this partnership cooperation
is specified as well. Data was taken from the web sites and annual reports of financial
institutions as of 2015.
The third part of the research briefly compares financial groups (EGB, VIG, UCG and
ERGO) by selected summary indicators. Indicators were selected according to their
availability on web sites and in annual reports. These indicators shall be: total assets,
total premium, number of branches and number of employees. The comparison shall
help determine size and province of financial groups. Data is taken from web sites
and from annual reports of financial institutions as of 2015.
The final part of the research shall include an analysis of bancassurance products
which are offered by banks. They are evaluated as well as the rate of internal
individual insurance companies as annual reports, and does not include this sort of
information. Finally, this paper discusses ascertained results to answer the previously
set research questions.
2 Results and Discussion
2.1 Integration of the Financial Group Erste Group Bank
Erste Bank was founded in 1819 as the first Austrian savings bank. EGB went public
in 1997 with a strategy to expand its retail business into CEE. Since then EGB has
grown through numerous acquisitions and organically to become one of the largest
financial services providers in the Eastern part of the EU in terms of clients and total
assets. -Casse The
customer base was 600.000. The new bank went public at the Vienna Stock
Exchange in November 1997. The important changes were in 2008. The separation of
the Holding and Erste Bank Oesterreich took legal effect. The registered company
name of the Holding is "Erste Group Bank AG". Ever since, the registered company
name of split-off Erste Bank Oesterreich is "Erste Bank der oesterreichischen
Sparkassen AG".
branches in 7 countries in Europe. EGB has about 46,600 employees. EBG's key
business is the retail business, covering the entire spectrum from lending, deposit
and investment products to current accounts and credit cards.
The following table no. 1 shows banks and cooperating insurance companies in
selected countries as well as their property structure.
24
Table 1 Shareholder's Structure of Erste Group Bank
Country
Erste Group Bank
Bank and shareholders
Insurance company
and shareholders
CZ
(CS CZ)
EGB (98.97%)
Kooperativa
(KOOP CZ)
VIG (96%)
(PCS CZ)
VIG (90%)
KOOP CZ (5%)
CS CZ (5%)
SK
(SS SK)
EGB (100%)
KOOPERATIVA
(KOOP SK)
VIG (94%)
Slovenskej
(PSS SK)
VIG (90%)
KOOP SK (5%)
SS SK (5%)
HU
Erste Bank
Hungary
(EB HU)
EGB (100%)
ERSTE, VIG
(ERSTE HU)
VIG (90 %)
UNION HU (5%)
EB HU (5%)
UNION, VIG
(UNION HU)
VIG (100%)
RO
Banca
Comerciala
Romana (BC
RO)
EGB (93.58)
OMNIASIG, VIG
(OMN RO)
VIG (99%)
BCR Asigurari de
Viata (BCR RO)
VIG (94%)
BC RO (5.5%)
HR
Erste &
Bank
(EB HR)
EGB (59%)
Bank and
Sparkassen
(41%)
Erste osiguranje,
VIG (ERSTE HR)
VIG (90%)
WIENER HR (5%)
EB HR (5%)
RS
Erste Bank Novi
Sad
(EB RS)
EGB (74%)
Steiermaerkische
Bank and
Sparkassen
(26%)
Osiguranje
(WIENER RS)
VIG (100 %)
Source: Summarized by authors based on website and annual report of financial institutes
(2016)
In all countries, the bank is owned by EGB, with a majority share. EGB cooperates
solely with insurance companies belonging to the VIG group. VIG operates in all
analyzed countries. None of the insurance companies is a subsidiary company of a
bank or EGB group. In all countries, except for Serbia, one of the insurance
companies has a 5% share.
Partnership Cooperation of Financial Groups EGB and VIG
VIG was established by
wechselseitige Brandschaden Versicherung in 1824. During its existence, it has
become the largest Austrian insurance group whose majority owner is Wiener
VIG
expanded into Central and Eastern Europe (CEE) in 1990. The cooperation
between EGB and VIG began in Slovakia in 2003. In 2005, the cooperation was
extended to the Czech Republic and Croatia. 2008 then VIG acquired the entire
25
insurance business of Erste Bank for EUR 1.45 billion. In Central and Eastern Europe,
this made VIG the market leader. Additionally, a mutual distribution agreement
makes it possible for both groups to use the potential client base of the other and
EGB is a strong partner for VIG. It
also operates independently, has the same values and follows a similar growth
strategy. The two companies benefit equally from a long-term cooperation agreement
concluded in 2008 for Austria and the CEE region. EGB distributes VIG insurance
products, whereas VIG companies offer EGB banking products in return.
Acquisition of the insurance operations of the EGB at the beginning of 2008, VIG
acquired the entire insurance business of the EGB in Austria, the Czech Republic,
Slovakia, Hungary, Croatia and Romania. As a result of this acquisition, VIG has risen
to the top position among insurers that are internationally active in the CEE region
and is a leading provider of life insurance. Furthermore, VIG founded a Group
reinsurance company in the Czech Republic in 2008. The formation of the company
VIG RE that has its registered office in Prague is a clear signal for the CEE region as
core market of VIG with excellent growth potential. In 2009 the corporate name was
effect since 3 August 2010, the company's operational insurance business in Austria
became legally segregated from the holding functions of the Group. WIENER
company, therefore continues to handle the property/casualty, life and health
insurance business in Austria. Besides exercising the usual international control
functions of a listed group, VIENNA INSURANCE GROUP AG Wiener Versicherung
Gruppe is also active in the reinsurance and international wholesale insurance
business. In the course of the reorganization the listed holding company gets the new
VIG with its registered office in Vienna, Austria, is one of the largest
international insurance groups in CEE. By entering the markets of Montenegro in
2010, Bosnia and Herzegovina in 2011 and Moldova in 2014, VIG gained access to
the last blank areas of the map of Central and Eastern Europe. Meanwhile, the VIG
became successfully active in 25 markets with around 50 companies and about
23,000 employees.
2.2 Integration of the Financial Group UniCredit Group
W
Banca was created, the contemporary history of UCG begins from a merger of nine
leading Italian banks, the subsequent integration with the German HVB Group and,
most recently, with the Italian Capitalia. In 1999, acquisition of Bank Pekao of Poland
into CEE. Growth continued over the next few years with purchase of the Pioneer
Investments group, the subsequent formation of Pioneer Global Asset Management,
and then further strategic acquisitions gradually carried out in Bulgaria, Slovakia,
Croatia, Romania, the Czech Republic and Turkey. UniCredit merged with the German
group HVB in 2005. By merging in 2007 with Capitalia, the third-largest Italian
26
banking group, UCG further consolidated and strengthened its position in one of its
most important markets, Italy.
million in around 22 countries and 10,000 branches. UCB operates in 17 countries of
Europe and has about 168,000 employees. In the CEE region, UCG operates the
largest international banking network with around 4,000 branches and outlets, at
which some 83,000 employees serve more than 28 million customers.
Table 2 Shareholder's Structure of UniCredit Group
Country
UniCredit Group
Bank and shareholders Insurance company and shareholders
CZ
UniCredit
Bank
(UCB CZ-SK)
UCB
Austria
(99.96%)
CZ)
Generali CEE
(100%)
Allianz SE(100%)
Generali CEE
(100%)
(AXA CZ)
SOCIETE BEAUJON
(100%)
SK
ERGO Austria
International
(85.53%)
ERGO Versicherung
Aktiengesellschaft
(14,47%)
Achmea (99.97%)
(CARDIF SK)
PNP Paribas Cardif
(100%)
HU
UniCredit
Bank
(UCB HU)
UCB
Austria
(100%)
Generali CEE
(100%)
ERG
ERGO Austria
International
(100%)
(CIG HU)
Domestic private
individual (50.11%)
Domestic entity
(45.52%)
RO
UniCredit
Bank
(UCB RO)
UCB
Austria
(95.62%)
ERGO life Insurance (ERGO
RO)
ERGO Austria
International
(99.99%)
HR Banka
(ZB HR)
UCB
Austria
(84.47%)
Allianz SE
(11.27%)
Allianz (ALL HR) Allianz SE
BNP Paribas Cardif osiguranje
(BNP HR)
BNP Paribas Group
RS
UniCredit
Bank
(UCB SR)
UCB
Austria
(100%)
Generali osiguranje (GEN SR) Generali CEE
Wiener S
(WIENER RS)
VIG (100%)
Source: Summarized by authors based on website and annual report of financial institutes
(2016)
27
The insurance group ERGO has concluded a strategic cooperation agreement with
UCG in all countries except for Serbia. The table no. 2 shows banks and cooperating
insurance companies in individual countries from the viewpoint of ownership. It was
not possible to find exact ownership share with some insurance companies. UniCredit
Bank has been offering bank products and
In all countries, the bank is owned by UCG, with a majority share. Only in Croatia, ZB
is owned by the Allianz SE group, with a share of 11%. Contrary to expectations,
banks in individual countries do not cooperate merely with insurance companies
belonging to the ERGO group. They cooperate with other insurance companies, which
shall be further analyzed in the final part of the research.
Partnership Cooperation of Financial Groups UCG and ERGO
ERGO was established in 1997/1998 as a merger of experienced German insurers. In
2001 ERGO started exclusive Sales cooperation with German HypoVereinsbank (today
a member of the UCG). Acquisition of German direct insurer KarstadtQuelle
Direkt Insurance) realized in 2002. German D.A.S.
Company merged into ERGO Versicherung, brand D.A.S. maintained in 2015.
ERGO is one of the major insurance groups in Germany and Europe. Worldwide, the
Group is represented in over 30 countries and concentrates on Europe and Asia. In its
home market of Germany, ERGO ranks among the leading providers across all
segments.
ERGO is a subsidiary of Munich Re and part of the Munich Re Group, one of the
leading reinsurers and risk carriers worldwide. With a premium income of
over
people work for the Group either as employees or as self-employed sales
representatives.
The strategic goal of the ERGO is to expand its insurance sales via banks.
Bancassurance is a primary objective in the strategy of ERGO. Working together with
the major European bank UCG means that ERGO has access to an extensive sales
network throughout Germany as well as CEE. Life and Non-Life insurances are being
sold in Slovakia, Hungary, Slovenia, Czech Republic, Croatia and Romania under the
ERGO brand. The UCG and Volksbank are acting as cooperation partners.
The cooperation of ERGO and UCG is related to their long-term business cooperation
in Germany.
ERGO Austria International AG (hereinafter referred to as ERGO Austria), an
insurance holding based in Vienna, was set up in 2007. ERGO Austria is one of
Austria's five largest insurance groups. It operates in Austria and also has
subsidiaries in a number of countries in CEE. The operating insurance company in
Austria is ERGO Versicherung. The company offers insurance solutions for private and
commercial provisions, hedging the risks of everyday life and also long-term asset
accumulation. Their main target groups are the customers of Bank Austria/UniCredit
Group and Volksbank.
28
ERGO Austria has taken on a key role in expanding the company's insurance activities
in CEE. In this region, ERGO Austria is making good use of its many years of
bancassurance experience gained in Austria. The focus is on developing existing bank
partnerships and the evaluation and tapping of new markets. CEE is a major growth
market with great potential and significantly higher growth rates compared to
Western Europe.
2.3 Comparison of Financial Groups
Table no. 3 compares all financial groups, namely EGB and UCG, VIG and ERGO
according to selected indicators. It is clear that UCG, but also cooperating with ERGO,
are more prominent financial groups in all monitored total indicators.
Table 3 Comparison of Financial Groups EGB and UCG, VIG and ERGO
Indicator Erste Group Bank UniCredit Group
201.2 1,028
Customer base, million 15.8 40
Number of countries 7 22
Number of branches 2,500 10,000
Number of employees 46,600 168,000
VIG ERGO
9,019.76 17,867
Number of countries 25 34
Number of employees 23,000 48,000
Source: Summarized by authors based on website and annual report of financial institutes
(2016)
2.4 Evaluation of the Level of Integration of Bancassurance Products
Table no. 4 shows a comparison of bancassurance products of both financial groups.
The number of insurance products (hereinafter referred to as IP) is monitored as well
as the level of integration according to presence of a general contract (hereinafter
referred to as GC), discounts and availability of products of clients of banks. Some
information about products is not available on web sites of some financial entities, it
is either incomplete or too brief. This is the reason why it was not possible to perform
more detailed analysis for some products.
29
Table 4 Comparison of Insurance Products Offered by EGB and UCG
Co.
Erste Group Bank UniCredit Group
Insurer
No.
of IP
GC Note Insurer
No.
of IP
GC Note
CZ
KOOP 5 3 Discounts GEN 5
For bank
clients
PCS 6 3 Free account CP
1
1
Common
product
Advantaged
interest
rate
AXA ZP
ALL 1
SK
KOOP 1 For bank clients ERGO 3 1
Advantaged
interest
rate
Discounts
PSS 7 4 For bank clients UNION 1
For bank
clients
CARDIF 1
For bank
clients
HU
ERSTE 2 With credits ERGO 4
For bank
clients
UNION 3 With credits GEN 2
With
credits
Discounts
CIG 1
For bank
clients
RO
OMN 3
Interconnectedness
of products unclear
ERGO 2
For bank
clients
BCR 4
For bank clients
Discounts
HR
ERSTE 3
Offer of products
only
ALL 5
For bank
clients
BNP 1
For bank
clients
RS WIENER 4 With credits WIENER 1
For bank
clients
GEN 1
Note: GC - general contract. IP - insurance product. Other abbreviation for insurers see Table
1 and Table 2.
Source: Summarized by authors based on website of financial institutes (2016)
Evaluation of Cooperation of EGB with Insurance Companies
EGB cooperates exclusively with insurance companies belonging to the VIG group
(see table no. 4). The largest interconnectedness of products is present in the Czech
Republic and Slovakia. Especially in Slovakia, there are four complex interconnected
products offered. These are arranged through the general contract. Also in Hungary
and Romania, bancassurance products are offered. However, their number is lower
and interconnectedness is at a lower level also. General contracts are not offered. In
Croatia and Serbia, integrated bancassurance products are not present.
30
Evaluation of Cooperation of UCG with Insurance Companies
UCG does not cooperate merely with insurance companies belonging to the ERGO
group. Table no. 4 shows a wide range of cooperating insurance companies in
individual countries. This is the reason why evaluation must be divided into two
steps. In the first step, it will be necessary to concentrate merely on the range of
cooperating insurance companies and to find reasons for cooperation and
consequences for the interconnectedness and number of bancassurance products.
This evaluation excludes Serbia as the ERGO group does not operate in this country.
An exclusive cooperation with the ERGO insurance group is present merely in
Romania. On the contrary, there is no cooperation with the ERGO group in the Czech
Republic and Croatia. It is necessary to say that the bank has the same province in
the Czech Republic and in Slovakia and in Slovakia, the bank cooperates with the
group ERGO.
If cooperation with insurance companies should be evaluated merely by the range of
cooperating companies, the most cooperating insurance companies are present in the
Czech Republic and in the Slovak Republic, followed by Hungary. Judging from the
number of offered products in the Czech Republic and Hungary, it is clear that
cooperation with the GEN insurance is a strong one. The insurance company ALL
shows a strong cooperation with UCG in Croatia. In the Czech Republic, the insurance
company GEN and the insurance company CP belong to the same insurance group
GENERALI Holding. A question suggests itself What is the reason for cooperation
between UCG and the insurance companies GEN and ALL?
The insurance company ALL offers mortgage loans from six banks operating on Czech
market in the Czech insurance market. One of them is UCB. From the viewpoint of
cooperation is actually becoming strategic. The insurance company ALL in the Czech
Republic is a 100% subsidiary of Allianz New Europe Holding GmbH and it is part of
the prominent global insurance group ALLIANZ. It entered the Czech market in 1993
and has gradually become one of three largest Czech insurance companies. Allianz
New Europe Holding GmbH through its subsidiaries provides insurance and financial
services. The company is based in Vienna, Austria. Allianz New Europe Holding GmbH
operates as a subsidiary of Allianz SE.
The insurance company ALL has operated in Croatia since 1999. In that year, the
insurance company ALL, together with the ZB HR bank took over the former Adriatic
insurance company. The insurance company ALL is the second largest on the Croatian
insurance market. The insurance company ALL concluded a strategic partnership
agreement with the bank ZB HR in 2001 and took part in the pension reform.
The reason for cooperation between GEN and UCG might be, not only in the Czech
Republic but also in Hungary, their common inception on Italian financial market
and their firm position on the current insurance market. In the Czech Republic,
GEN has been cooperating with UCB since 2007
in the Czech Republic. GEN is the third largest insurance company on the Czech
insurance market. GEN was the first foreign insurer in the former socialist
31
countries after the year 1989 in Hungary. GEN is the second largest insurance
company on the Hungarian insurance market.
What might be the reason for the wide range of insurance companies cooperating
with UCG on the Czech and Slovak market? Possibly the cooperation of the bank
(UCB CZ-SK) with the company Partners Financial Sevices, a. s. (hereinafter referred
ervices
represents cooperation of bank products, services and financial planning and services
launched in 2010. Under this name, through PARTNERS consultants, bank products
and services are distributed, which USB provides in cooperation with PARTNERS.
of the bank and is not an individual subject.
If cooperation of UCG with insurance companies should be evaluated according to the
mere level of interconnectedness of bancassurance products, then it is possible to
state the following: The largest number as well as the strongest interconnectedness
of products can be found in the Czech Republic and in the Slovak Republic. Clients of
banks are offered general contracts as well as discounts. Insurance products are
offered in connection with a bank product. Bancassurance products are also offered in
Hungary and Croatia. However, their number is lower and the interconnectedness
(see table no. 4) is not as significant as in the Czech and Slovak Republic. General
contracts are not offered. Integrated bancassurance products are not present in
Romania and Serbia. Available information is too brief and it is thus not possible to
perform further detailed evaluation.
Conclusions
This paper aimed at ascertaining whether or not there are similarities in how
bancassurance functions in selected financial groups and countries. This paper
applied a qualitative research approach to investigate the following research
questions: What sort of integration is present in financial groups and countries? What
is the level of internal interconnectedness of a bank product with an insurance
product in financial groups and countries? Is there a similarity between the type of
integration and the level of internal interconnectedness of bank and insurance
product in these financial groups and countries? Six countries located in the CEE
region were selected, namely the Czech Republic, the Slovak Republic, Hungary,
Romania, Croatia and Serbia. Both selected financial groups are present in these
countries.
What sort of integration is present in financial groups and countries? Based
on the performed research, it is possible to conclude that, in selected countries, there
None of the insurance companies is a subsidiary of a bank. Cooperation of banks
(within EGB and UCB) with insurance companies exists on the basis of concluded
strategic agreements. EGB exclusively cooperates with VIG whilst UCB cooperates
with the insurance group ERGO, but also with ALL and GEN.
32
UCG widely cooperates with the insurance company ALL in the Czech Republic and in
Croatia, on the basis of strategic agreements. In the Czech Republic, the cooperation
started when mortgage loans of UCB began to be offered. UCB offers insurance
products of ALL. In Croatia, cooperation with the insurance ALL has a historic origin.
The insurance company ALL together with the bank ZB HR took over the former
Adriatic insurance company in 1999. The insurance company ALL concluded a
strategic partnership agreement with the bank ZB HR in 2001 and participated in the
pension reform.
The reason of cooperation between GEN and UCG might be, not only in the Czech
Republic but also in Hungary, that they both started operating at roughly the same
time on Italian financial market and another reason might be their firm position on
the current insurance market.
What caused that UCG has concluded strategic agreements with several insurance
companies and that it does not exclusively cooperate with only one insurance
company? The reason for this might be found in creation of financial institutions in
the countries (Czech Republic, Hungary), then obligations from the past (Hungary),
but also cooperation with the company PARTNERS (Czech Republic and Slovakia),
which represents a specific distribution channel of UCB.
What is the level of internal interconnectedness of a bank product with an
insurance product in financial groups and countries? The research found out
that the highest level of internal interconnectedness from the viewpoint of financial
groups and countries is reached on the Slovak financial market followed by the Czech
and then Hungarian financial market.
Is there a similarity between the type of integration and the level of internal
interconnectedness of bank and insurance product in these financial groups
and countries? The type of integration is the same in all the countries and it is
based on strategic cooperation. From the viewpoint of financial groups, a higher level
of integration of bancassurance product within EGB is observable. From the viewpoint
of countries, it is possible to observe a higher level of integration in the Czech
Republic and in the Slovak Republic.
In accordance with the set target it is possible to state that a similarity can be found
in the existence of strategic cooperation of banks and insurance companies in all
countries and within both financial groups. Another similarity can be found in
integration of interconnectedness of financial products of both financial groups in the
Czech Republic and in the Slovak Republic.
Acknowledgments
Research behind this paper was supported by the Czech Science Foundation within
the project 16-
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References
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