THOUGH foreign clients have known for some time that combining bank and insurance products can be beneficial, the Slovak market is just discovering the advantages. Many banks in Slovakia have started to cooperate closely with insurance companies to offer bank insurance products to their clients.
The market share of insurance products sold through banks has been steadily growing in developed countries - for example, in Italy it is 40 percent and in Austria and France it is 60 percent.
"I do not think I would be able to estimate the share in Slovakia. It is still developing. However, I believe the market is just as prospective in Slovakia," said Roman Juráš, member of the board of directors of the Generali insurance company, which cooperates with VÚB - one of Slovakia's major banks - in the bank insurance field.
The bank insurance boom arrived in Slovakia a bit later than in neighbouring countries partially because it was only recently that the new Insurance Act enabled insurance companies to offer products other than insurance.
"Before, it was not possible; but now we can expect a growth in the sale of banking products through insurance companies," added Juráš.
Clients mainly appreciate the opportunity to take advantage of a variety of financial products through one combined product.
"Bank insurance makes it possible for a wide spectrum of financial services to be available to a client in one place. Additionally, a bank clerk has better knowledge of a client's finances, so he is able to give better advice.
"Such a solution is more comfortable, safer, and often more advantageous," said Eva Güttlerová, the spokeswoman of Slovenská Sporiteľňa, the biggest bank in Slovakia.
According to banks that offer such products, customers are mainly interested in investment life insurance, which combines life insurance with investments in funds. They also show interest in travel insurance through payment and credit cards. Insolvency insurance is a favourite among clients when taking out a bank loan.
Banks often offer various types of health insurance to customers who open a current account, and offer real estate insurance through mortgage loans.
Bank representatives emphasise that insurance products must be simple and attractive to win over clients.
"We offer insolvency insurance together with revolving loans. When we offered insurance on a separate application form, few clients were interested. Since we began offering the combined product on one application form, it has been successful," said Mário Drosc, a member of the board of directors of VÚB.
"It's the same with consumer loans. Eight out of 10 applicants mark the option for insolvency insurance on the application form," he added.
Banks usually create bank insurance products along with selected insurance companies that are closest to their corporate culture.
Sometimes, they use different insurance houses for different types of insurance, or they offer such products through their own daughter insurance companies.
Drosc said that cooperating with insurance companies to create good bank insurance products is not always simple. That is why VÚB ultimately chose to partner with only one insurance house, which also cooperates with VÚB's major shareholder, IntesaBCI.
"We are trying to act as both a brokerage and a consultancy, so our clients can satisfy needs that a bank alone would be unable to provide. This is the main reason why we support bank insurance," added Drosc.
Slovenská sporiteľňa (SLSP) established its own daughter insurance company, which has only operated on the Slovak market since June 2003.
"The insurance company of SLSP, like the bank itself, is part of the Erste Bank group. Such an alliance enables our clients to use products 'tailored' to their needs," said Güttlerová.
OTP Banka Slovensko also chose to open daughter companies, one of which focuses on life insurance (OTP garancia životná poisťovňa), and the other on property insurance (OTP garancia poisťovňa).
Tatra banka cooperates with several insurance companies. The bank offers life and property insurance through Uniqa and travel insurance through Allianz and Union.
The results show that Slovak customers are getting used to bank insurance products quite quickly.
For example, VÚB only began offering specialised products for investment and capital life insurance through Generali in 2002. Their sales increased 10 times year-on-year in 2003.
In 2003, the year it was established, the insurance company of SLSP generated Sk317.6 million (€7.9 million) in the sale of insurance provisions, which represented 1.8 percent of the whole Slovak life insurance market.
"The combination of bank and insurance products is increasing. Bank insurance has come to Slovakia and it is beginning to play an important role for clients," said Silvia Nosálová, the spokeswoman of VÚB.