THE COMBINED offer of insurance and banking products is still a new trend in Slovakia, but following developments in mature economies it is starting to take off.
It's not surprising that Slovakia is somewhat behind in this field, as it is less than a decade since the Slovak Insurance Act allowed insurance companies to offer anything besides insurance products. The Act opened up a new field of operation not only for insurance companies but also for banks, which have begun to offer combined bank-insurance products on a large scale.
Banks operating in Slovakia, the majority of whom belong to international banking houses, are following global trends in combining bank and insurance products, a move advantageous to both kinds of institution. Banks gain a larger portfolio of products to offer, while insurance companies gain more outlets, selling their products through the network of bank branches.
"Financial institutions around the world are trying to satisfy as many client needs as possible. Comfort and savings in time and money are now becoming more important to people. Combining bank and insurance products and cooperation between banks and insurance companies is one way to meet this goal," Henrieta Gahérová, head of product planning and development at Slovenská sporiteľňa (SLSP), told The Slovak Spectator.
Roman Začka, director of public relations at Tatra banka, said the cooperation allowed banks to provide clients with more complex services.
"If some banking products require insurance, such as property insurance in the case of a mortgage, it can now be taken care of under one roof," Začka said.
Alena Walterová, spokesperson for VÚB bank, said that initially the main reason behind bank-insurance products was to protect clients who were applying for a loan from unforeseen events that could affect their incomes - in other words, insurance against the inability to pay back a loan.
"Currently, the main reason for these products is to provide complex financial advisory services," she said. "We want to offer our clients information on all the ways they can use their money to work for them. For example, clients with life insurance can get more favourable terms for a loan."
Banks tend to cooperate with insurance houses that have a similar corporate culture. This is why VÚB bank, owned by the Italian IntesaBCI, often cooperates with the Italian insurer Generali. VÚB also offers products from the French Cardif insurance house.
VÚB works with Generali in offering pension insurance through their joint VÚB-Generali pension fund management company. Generali is also a supplier of various types of life insurance, travel insurance, property insurance as collateral for mortgages, third party liability insurance, insurance against the inability to repay debt, and other products.
VÚB sells its products with Cardif providing insurance against loss of a bank card or insurance on the key person in a company.
The SLSP bank established its own insurance company in June 2003. The SLSP Insurance Company (Poisťovňa Slovenskej sporiteľne), like the bank itself, is part of the Erste Bank group of Austria. The bank also cooperates with the Kooperativa insurance company.
Together with the insurance houses the bank offers many types of insurance such as life, travel, property, and third party liability insurance. The bank accepts life insurance policies from the SLSP Insurance Company, Generali and ING životná poisťovňa as collateral for consumer loans.
Tatra banka cooperates with several insurance companies such as Uniqa, Allianz-Slovenská poisťovňa and Union. The bank offers an investment programme with life insurance, property insurance, travel insurance with some credit cards and insurance against the inability to repay debt.
Walterová from VÚB said bank-insurance products are primarily used by two types of clients.
"The first group understands the advantages of insurance especially when taking a loan. Insurance against the inability to repay the loan gives them a feeling of security.
"The second group consists of clients buying life insurance. They have extra money and they are looking for an additional effect that cannot be offered by classic banking products," she said.
Gahérová of SLSP said bank-insurance products benefited banks because it allowed them to offer a more complex range of services, to save on the cost of a sales organisation, and to increase their client numbers.
On the other hand, clients can save time and money by visiting a single institution and having access to banking and insurance products at one sales point. They can communicate with a single financial advisor who becomes familiar with their needs. Bank-insurance products increase the value of clients' money, and at the same time protect them against various unexpected events.
According to the Generali insurance company, which cooperates with VÚB, the market share of insurance products sold through banks has been growing steadily in developed countries - for example, in Italy it is 40 percent and in Austria and France it is 60 percent.
The company said it would be difficult to estimate the market share in Slovakia because the bank-insurance market is relatively new. However, Generali said that the market was growing fast.
Začka of Tatra banka agreed: "The bank is seeing great interest in all bank-insurance products on offer."