DCG Ecommerce Solutions - Want Bancassurance Success? Try the 'British Model,' say Financial Services Experts

How to Avoid Merger Heartburn

June 01, 2005 — CIO — As I recently noted in the Harvard Business Review, 70 percent to 80 percent of mergers are considered failures from an acquiring shareowner’s perspective. Management has gone to the merger and acquisition gaming table on Wall Street over the past couple of decades and placed billion-dollar bets using their owners’ capital, despite knowing that the odds of winning were far worse than roulette. Is anyone surprised that the owners of these companies took a beating again and again? Deal activity during the past five years of the 1990s annihilated at least $1 trillion of acquiring shareowners’ wealth, more than the entire dotcom bubble. Now, M&A activity is again rising.

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Want Bancassurance Success? Try the 'British Model,' say Financial Services Experts

BRIMFIELD, Mass.--(BUSINESS WIRE)--July 19, 2000, If bancassurance is to succeed in the US, it must follow the integrated banking and insurance model that has been successfully practiced in Great Britain, says bancassurance consultant Maria Thomson, FSA, MAAA, Managing Principal, Thomson Management Solutions, Inc., Brimfield Massachusetts. Following a fact-finding trip to Great Britain and Spain that resulted in an alliance with NMG Financial Services Consulting of London, Thomson observed, "We were excited to find Britain successfully utilizing this integrated model. We further believe this same model will work well in the US, after factoring in some modifications to comply with our regulatory environment."

Britain has successfully demonstrated, Thomson explains, that diversified financial services providers can sell a wide range of products to customers of modest means by utilizing a financial needs analysis approach. British providers have learned that it is far more cost effective to sell multiple products to each customer than to constantly be seeking new customers for individual product lines.
R. Alan Wade, TMS Principal specializing in sales operations in banks, agrees. "What's needed is for banks to begin seeing themselves as true diversified financial services providers," he says. "That's what you find in Europe: one person handling it all. That way, loyalties are built and different kinds of products can be introduced seamlessly. The customer feels appreciated and taken care of."
To assist its own banking and insurance clients in moving toward this model, TMS formed its alliance with NMG Financial Services Consulting, a multi-disciplined management consultancy, in order to enable both firms to offer top-level consulting services worldwide. Areas covered as a result of the alliance will include financial services strategic positioning, marketing, organizational re-design, and implementation related specifically to such distribution channels as bancassurance, call centers, Internet, and direct mail.

Over the past decade, both firms have provided bancassurance consulting services to the world's largest banks, insurance companies and financial service firms. With its primary focus on bancassurance development, NMG in particular has gathered a vast amount of experience developing and implementing bank and insurance integration around the globe. NMG projects have extended throughout the U.K. as well as Latin American, South Africa and Southeast Asia.