Abstract
The risk management arena engulfs a wide breadth of issues ranging from hedging instruments to risk strategies for multinational giants, and from natural to man-made disasters across the world. When newly developed economies with non-traditional corporate structures come on stage, then the risk management science has a role to play. Close monitoring of these markets becomes essential for future planning and avoids negative externalities for the financial system as a whole. Thus, the current study aims to provide a survey of the bank–insurance ventures in the Greek market. The review unveils the significant changes and rapid growth of the Greek financial services sector. Multinational financial intermediaries have been keen in making their presence felt in the region. This is translated into mergers and acquisitions between banks and insurers, as well as strategic alliances and joint ventures. In parallel with the involvement of international corporate giants, domestic cross-business alliances and corporate partnerships are also present to strengthen the bancassurance trend. The study further proposes a three-dimensional approach for the distribution platform. The three dynamics put forward embrace product complexity, distribution infrastructure and market segmentation.
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Notes
For an excellent discussion on the issues surrounding mergers and acquisitions, see Sudarsanam (1995, 2003).
See Boyd et al. (1993) and Nurullah and Staikouras (2008) for an examination of the risk-return relationship of bancassurance firms
See Vander Vennet (2002) for an excellent examination of the cost and profit efficiency in financial conglomerates.
The authors are grateful to Michel Zanatta, Managing Director Emboriki Life, for providing his valuable comments and statistical figures.
The authors are obliged to Nikolaos Violakis, Manager Alpha Insurance, for providing data and suggestions.
The ING Groep N.V., with 150 years of experience, is present in 64 countries all over the world and in all Eurozone countries with total assets of €865 billion. They provide a wide array of banking, insurance and asset management services. Based on market capitalization, ING is one of the 20 largest financial institutions worldwide.
It is one of the three biggest private banks in Greece. It was also awarded, by “The Banker” FT, The Bank of the Year award in 2003.
NovaBank was established in 2000 as a joint venture between Greek Interamerican Insurance Group and the Portuguese bank BCP (Banco Comercial Purtugues) with the aim to focus on electronic banking services, ATMs and Call centres. Interamerican has been now acquired by Eureko, originally formed in 1992 as an alliance of European insurers and banking operations.
The people involved are usually product specialists who, on a daily basis, work closely with the bank employees. Their role also aims to solve problems, answer questions and guide the entire sale process. At the same time, this becomes a learning and training process for those involved from the bank.
The company Phoenix General Insurances was founded in 1928 and was listed on the ASE in January 1964. It was also the second largest general insurance company in Greece with a 10% market share. The company Metrolife Emporiki was founded in 1986 and was listed on the ASE in December 1994. In 2002, Phoenix and Metrolife Emporiki merged to form the new powerful insurer Phoenix-Metrolife Emporiki.
The capital contribution is equally split between the two firms and amounts to €10,000,000 in total.
The EFG Eurobank Group was created from the merger of Eurobank, Crete Bank, Interbank and Ergobank. Note that Deutsche Bank has bought Bankers Trust, the Belgium activities of Credit Lyonnais, cooperates with the Japanese Nippon Life Insurance Co. and is involved in the mutual funds of NBG.
In 2000, the merger of the Ionian Bank through absorption by Alpha Credit Bank created Alpha Bank.
In 1999–2000, Aspis Pronia has made a number of acquisitions (Gota, Nordstern Colonia, Commercial Union and Scoplife) and claims a good position in the life insurance market.
This was formerly known as Bank of Central Greece, which was a subsidiary of the Agricultural Bank of Greece and was subsequently sold to private investors.
The term “market globalization” refers to the level of market integration with developed economies and how segmented the industries are, in the sense of sharing activities and/or collaborating with each other.
These are only limited examples, as the insurance employee should be able to promote a wide range of other services ranging from death, career change, birth, divorce to natural catastrophes, terrorism attacks and many more.
The theories of corporate management endeavour to address the issues (a) of how managers should act (normative approach) and/or (b) based on the fact that managers act in this way, what does it tell us about their decisions – in other words, how decisions are made (positive approach). The latter attempts to explain the behaviour of managers arising from the separation of ownership and control (agency theory).
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Acknowledgements
We express their gratitude to Christos Chrisanthakopoulos, Bank of Greece; Christos Copelouzos, Copelouzos Group; Petros Kourtis, Agrotiki Insurance; Nikolaos Violakis, Alpha Insurance; and Michel Zanatta, Credit Agricole for providing information and valuable comments. Special thanks are due to Paul Dawson, Kent State University, Ohio, US, for continuous support, as well as Maria Agathokleous and Dr Sahad Al-Mosawi for excellent research assistance. We are also indebted to the anonymous referees and the editor for their useful comments. The views in this paper do not necessarily reflect those of the aforesaid people or the institutions that are affiliated with. The usual disclaimer applies.
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Artikis, P., Mutenga, S. & Staikouras, S. Corporate Bancassurance Structures: The Case of Greece. Risk Manag 10, 85–103 (2008). https://doi.org/10.1057/palgrave.rm.8250041
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DOI: https://doi.org/10.1057/palgrave.rm.8250041