Building bridges with customers
The Talanx Group has established one of the largest bancassurance networks in Germany. The strands of its highly efficient alliance with two banking partners converge in Hilden in North Rhine-Westphalia.
Hilden has always been somewhat overshadowed by famous cities nearby such as Düsseldorf or Cologne, but that is of little consequence to its inhabitants, who have long been aware of the advantages the location offers. It is precisely because other towns are standing in the spotlight that Hilden enjoys optimal road and local rail connections in all directions.
If networking is regarded as a major strength, then this town on the river Itter is just the right place for Talanx’s bancassurance business, which is headquartered here. Together with its partners TARGOBANK, Postbank and Sparkasse savings institutions, it represents one of Germany’s largest and most successful bank insurance networks. While 7,500 branches and numerous other agencies sell insurance from Talanx companies that blends perfectly with their brand family, in the background, the different strands converge at the insurers, at both neue leben in Hamburg (see box on page 30), and in Hamelin and Hilden. The two bancassurance sections in Hilden, with around 490 employees, are joined together by a glass passageway. It is as if the structure emphasises what is most important, namely, building bridges between insurers, cooperation partners and their customers. In 2013, TARGO, PB insurers and neue leben generated around EUR 3.1 billion in premium income.
Björn Kniffi, Head of Marketing and Sales Support at TARGO Lebensversicherung AG, believes that bancassurance is the perfect mix of proximity to the customer and efficient management. He has worked in insurance for 18 years, and says that of all the areas he has been involved in during this period, it is bancassurance that fascinates him most, “because of the ideal division of labour”. On the one hand, the insurer can concentrate completely on its own competencies, while on the other hand, the bank offers an optimal distribution structure. He explains that customers know that, at their local bank, their money is well looked after, and so it is entirely natural that security and pension issues should also be discussed there.
»Bancassurance is the perfect mix of proximity to the customer and efficient management.« SAYS BJÖRN KNIFFKI
A good bank advisor will be familiar with the financial situation of the customer, and with their plans and wishes. “That makes the advisor the ideal point of contact for insurance matters.” Although there are German bancassurance alliances where the insurers’ employees work in the branches,, Talanx companies use their banking partners’ own employees. “In return, we provide the training for the branch employees,” explains Kniffki.
The fact is that, with both insurance partners in Hilden located under one roof, they can capture synergies while retaining their independence as far as possible. A joint back office takes care of administrative matters, whilst product development and sales and marketing are organised independently – tailored to the individual customer structure of each bank. “As we process the customer requests of both sales divisions in one back office, we can be highly efficient in developing processes and procedures, as each process only needs to be designed and created once,” explains Achim Cramer, head of Hilden’s back office. Last year, for example, TARGO life insurance introduced the “lifestyle protector”. This new product aims to secure the livelihood of the insured in the event of incapacity – not as comprehensively as an occupational disability insurance, but with the advantage of lower premiums. “Many people are either unable or unwilling to take out occupational disability insurance,” explains Kniffki, “So we’ve developed a product that meets their requirements.” No matter whether a product is designed to protect or provide, when it comes to deciding whether it is still appropriate or in need of updating, the insurance company and bank work together as equals. “In this way we benefit mutually from our expertise and experience,” explains Björn Kniffki. He does not see firm ties with a bank’s customer base as a restriction. “If you know your target group, then you can create tailor-made products, and being close to the customer becomes an advantage.”
» By processing the customer requests of both sales divisions in one back office, we can be highly efficient. « SAYS ACHIM CRAMER
In Germany, the potential in bancassurance is far from being exhausted. In Italy, Spain and France, up to three quarters of all retirement provision policies are sold by banks, but in Germany, only one in three or four policies are bought over the bank counter. The proportion of life insurance treaties concluded in banks has levelled off at around 30%. Björn Kniffki remains confident, explaining that Germany has a long tradition of selling products through brokers and that a new form of competition has emerged recently with the introduction of direct selling. Bancassurance has chosen a different route by using existing sales networks and developing reasonably priced products tailored to the target group, while coordinating everything under one roof. The success of this strategy is evidenced by the fact that Talanx bancassurance new business and administration expenses are below the market average.
A look at the highly automated back office in Hilden, where TARGO and PB insurers’ portfolios are managed, reveals just how efficiently the system functions. Most transactions from bank branches are sent to staff electronically – the direct policy issuance ratio is 86%. At the same time, the mailroom handles around 4,000 items of customer correspondence every day, they are scanned by three members of staff into the IT system. “It makes no difference whether a TARGO or PB insurer transaction is involved,” Achim Cramer explains, “each sales partner and customer gets the same level of service.”
Around 40% of transactions are processed automatically, including items as diverse as cancellations or changes of bank details. Then, when technology reaches its limit, staff take over. There are around 120 employees in the Hilden back office, and a further 65 in Hamelin. However, not every member of staff can deal with any issue. Staff are prepared for imminent surges in enquiries through targeted training courses. “Before introducing a new product such as the ‘lifestyle protector’, we aim to foresee issues that may crop up and the skills we will need to deal with them,” explains Achim Cramer. When planning training it is important to be able to forecast upcoming work as accurately as possible; by using sophisticated statistical evaluation this can be done up to 16 months in advance.
» If you know your target group, you can create tailor made products. «
EXPLAINS BJÖRN KNIFFKI
“When the work then materialises we can be sure, firstly, that enough staff have the necessary skills and, secondly, that staff are only given tasks for which they have been trained.” The aim is to provide top quality service that is fast and trouble-free. Indeed, maintaining this ambitious level of service is a key aspect of back office organisation.
A LOOK AT THE HISTORY OF TALANX´S BANCASSURANCE BUSINESS
- 1995: Talanx acquires the precursor of TARGO Versicherung AG
- 1998: It founds PB insurers together with Postbank
- 2002: The Magyar Posta insurance company is founded with the Hungarian post office
- 2004: Talanx AG acquires a majority stake in neue leben Holding AG
- 2007: It acquires the former BHW Leben and BHW Pensionskasse
Achim Cramer explains that in the event of a claim, the customer generally receives the money within seven days, and that policies are issued against applications within 24 hours. To motivate staff to meet the set targets, variable remuneration has been introduced that takes into account both quantitative and qualitative elements. Staff receive a financial bonus at the end of the year, provided that agreed service levels and quality targets have been met. This incentive is bearing fruit. The testing organisation TÜV Rheinland has accredited Talanx bancassurance’s customer service, quality management and sales support under ISO 9001. Björn Kniffki and Achim Cramer maintain that it is good cooperation between back office and marketing that has led to this great success.
At joint meetings, delegates from TARGO and PB insurers and neue leben come together in a spirit of trust and partnership. “Blue, yellow and red parties set out their views”, says Björn Kniffki, referring to the colours of the company logos. The Talanx Group’s bancassurance business makes it abundantly clear how interconnection leads to efficiency. And so does Hilden on the Itter; no city like Cologne or Düsseldorf. More one like both.
neue leben: a strong partner for savings banks
Talanx’s bancassurance division not only has offices in Hilden and Hamlin, but also in Hamburg. The neue leben insurers have their head office in the Hanseatic city. This provision specialist for Sparkasse savings banks was founded in 1965 as a subsidiary of today’s Hamburger Sparkasse. Talanx AG acquired a majority stake in the company in 2004.
neue leben now cooperates with over 100 savings banks nationwide, including 12 out of Germany’s 15 largest. “Savings banks are strongly rooted in their region and know exactly what their customers’ needs are,” explains Hans-Jürgen Löckener, Chairman of the Board of Management of neue leben Lebensversicherung AG. “The individual institutions have different needs, depending on their size and region.” neue leben therefore carries out regular surveys among savings banks to ensure they are satisfied. “This enables us to maintain a close relationship with our partners, and the results show us that we’re on the right track,” says Hans-Jürgen Löckener.
Furthermore, independent rating agencies regularly confirm that the products and companies are of high quality. With solid investments, low administrative expenses and a surplus participation that is above average for the sector, neue leben continues to be a reliable and efficient partner for customers and savings banks.