How best can a Conventional insurance company and Takaful Operator work together?

Last week I have a discussion with a counterpart from the takaful segment of our industry – the subject was on how best the conventional insurance segment could possibly work out a joint venture with the takaful operator. How can both sides of the divide cross path and yet work together to achieve a common goal?

On one side, the takaful is looking for the more lucrative non-Malay markets but this segment seems to be illusive to them. On the other hand the conventional is lamenting the overly tight control that the Bank is having on them so much so they are unable to work on any innovative adventures. The two major tariffs especially the motor also did not help.

Available options?
So how can we possibly work out something especially where the question of what’s in it for me count most? After much discussion I guess we may have four viable options to work on or perhaps think about….
1. Can we do a share swap so that both sides of the divide could be driven by common shareholding, therefore a common objective to do something together….? Something along the line of the now defunct MAS – AirAsia joint venture,
2. A common product that could package both essence of Takaful and the Conventional together,
3. Supporting one another with Co-insurance and facultative reinsurance in respect of large risks,
4. Joint Research & Development (R&D) into an IT platform to enable agency to improve on their marketing and sales performance – very much a tool for agency to utilise and also for principals to deploy new products any services.

But then if we analyse these options there is really nothing much in option 1, reason being, the process would be long and tedious,something that is beyond management.

Option 2 can also be difficult as those Sharia compliant adoptions by the Takaful operator would surely stand in the way. Even if darurat (emergency) (a term for curing non compliance matters that somehow stands in the way of business) could be triggered, there is really nothing for the Conventional guys; neither are the clientele from the Conventional could get anything out of this combined and so-called unique product packaging…. So, it is the question of what’s in it for me counts.

Option 3 is perhaps more logical and straight to the point but that’s what both sides of the divide have already been doing. Sharing business that is large and sizeable beyond treaty capacity is already a norm, so, no discussion is absolutely necessary; just let the business people and those reinsurance guys deal with the process.

Option 4? What could both sides achieve by building an internet marketing platform? I would like to think, as a start, both sides of the agency channel can utilise to expand their business, at least, prospecting with email marketing and Autoresponder that’s available in the system. Thereafter both sides can move forward to create options for mutual customers in the guise of an aggregator where customers can sign into the portal or platform to seek the best buy or to check out what’s available. Of course there are plentiful of opportunities with this kind of R&D, certainly both sides of the agency force would find it great working and cooperating with potential partners over the platform; with such combination of both companies working in converting effort an economy of scale could be more efficiently achieved.

What say you? Any comment, shoot them straight!

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