Here are the 2 secrets to the success of OCBC's bancassurance business

Sales increased 160% to $268 million in 2012.

According to a statement, OCBC Bank has led the bancassurance business in Singapore for 12 years, with sales (based on total weighted premiums) closing in at S$268 million in 2012 – an increase of 160% from 2009. Last year, the Bank made significant inroads in protection products, with sales growing sevenfold year-on-year.

OCBC Bank offers a wide range of insurance products – including endowment plans, protection products (whole-life, mortgage insurance and health plans) and universal life – through its Personal Financial Consultants and Relationship Managers located at 55 OCBC Bank branches and 19 Premier Banking centres, and a mobile team of more than 30 Financial Protection Specialists.

Typically, the category of endowment products is the biggest contributor to all banks’ bancassurance business. It is no different for OCBC Bank. In 2012, sales of regular premium endowment plans grew 26%, contributing more than 40% to OCBC Bank’s overall bancassurance business.

While the Bank continues to do well for its endowment plans, it saw the need to place more emphasis to increase customer awareness of its offering of protection plans. As a result, sales of protection products increased – total gross premiums collected grew sevenfold in 2012.

One protection plan which has done well is mortgage insurance. In 2010, OCBC Bank became the first financial institution in Singapore to offer Mortgage Protector Plus (MPP), a single premium mortgage insurance plan which refunds the premium to the customer at the end of the policy term if no claim is made. Following the success of MPP, a regular premium version, called Mortgage Protector Advantage, was launched in December last year.

These two products proved to be popular because customers can get back their premiums if nothing untoward happens and, at the same time, enjoy protection throughout the policy term. As a result, OCBC Bank saw the biggest growth in mortgage insurance within its bancassurance business in the last two years. Total gross premiums collected grew eightfold in 2012.

Head of Global Wealth Management, OCBC Bank, Mr Lim Wyson, said: “We have remained number one because we were able to move away from a product-centric business model towards one that places emphasis on customer centricity and segmentation, with a differentiated delivery of advice and products.”

He added: “We offer a holistic analysis of the customer’s financial health and a comprehensive suite of financial products and services to suit the varied needs of customers. It’s like a one-stop service centre. Customers can come to OCBC to purchase insurance, make an investment, and conduct their daily banking transactions.”

The two key success factors of OCBC Bank’s bancassurance business are:
1) Close collaboration with Great Eastern (GE)
2) The continuous effort to simplify communication materials

Close collaboration with Great Eastern
OCBC Bank launched the bancassurance business in 1992 with a suite of insurance products underwritten by The Overseas Assurance Corporation Limited (OAC), a wholly-owned subsidiary of GE and a member of the OCBC Group.

Mr Lim said: “Our deep understanding of customer needs, coupled with GE’s capability in manufacturing relevant products, gives us a competitive edge in the industry. We also work closely together with GE to simplify the underwriting and application process for customers. Take our mortgage insurance plans for instance, the underwriting period for most of the cases was reduced from one month to within a week.”

Wealth and Simplicity
The other key factor that contributed to the success of OCBC Bank’s bancassurance business is the emphasis placed on presenting product terms in a clear and simple manner that not many financial institutions in Singapore do.

The language was simplified in the financial needs analysis (FNA) form. Complex explanations and financial jargon were weeded out from marketing brochures, market outlook reports and advisory reports.

Lengthy texts in these documents were replaced with more appealing visuals that clearly illustrated key product features and benefits. Investment recommendations were rephrased in simple language and the overall advisory experience was enhanced by embedding videos featuring wealth advisors and treasury specialists.

In 2012, OCBC Bank received the Crystal Mark from the Plain English Campaign, based in the United Kingdom, for its wealth management documents – FNA form, unit trust, dual currency returns and mortgage insurance brochures.