New distribution channels for insurance companies and banks

The financial services industry is expanding its sales horizons. As growth through traditional sales channels loses steam, insurance companies and banks are tapping into new distribution channels outside their industry.

For example, banks in the United Kingdom have been partnering with retailers, such as Tesco and Marks & Spencer, to offer financial services. Now banks and financial services firms in other countries are beginning to build similar partnerships — with some hesitation, however, given the number of failed partnerships in recent years.

Partnership approaches for insurance companies and banks
A.T. Kearney has researched four partnership approaches that can be successful for financial services firms and their partners. These include:

• Advanced marketing where the partner only supplies a space for a product next to its own products, for example partnerships with discount grocery retailers such as Migros, ALDI or Coop, and newsstands, or tobacconists
• Sales push where the partner addresses its customers directly at the point of sale or through a direct marketing campaign, for example a partnership with a car rental company
• Promoting value where the value proposition is turned into one that generates strong customer demand based on the partner’s unique qualities, for example the partnership between Hypo Vereinsbank and soccer club FC Bayern in Germany
• Value push where both partners 'push’ the unique value proposition into the market, for example the partnership between Hanse Merkur (eyewear insurance) and Fielmann (optical store chain) in Germany

Key success factors for partnerships
In these partnerships, it is not enough to find the right partner with the right clientele and merely offer sales commissions. Successful partnerships depend on creating the right “trigger points” to entice new customers. The partners must build effective marketing approaches and thoroughly plan and continuously manage the relationship.

The key is creating a win-win situation for both of the partner companies and for their customers.

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Juergen Thiele is a principal in A.T. Kearney's Berlin office.
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