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Finaccord’s report titled Bancassurance in Zambia: Current State and Future Perspectives to 2020, plus the PartnerBASE™ and market data file that accompany it, provides comprehensive and detailed insights into the prospects for bancassurance in Zambia.

In addition to offering a review of key macro-economic metrics in Zambia, the research also provides a background to the banking sector through the following information: identification of the ten largest banks by number of retail banking customers; data to illustrate the development of the banking market including number of fully-licensed banks, deposit accounts, branches and ATMs and how each of these have developed since 2005; and review of the value and growth of the consumer mortgage and non-mortgage lending market.

The research then focuses specifically on bancassurance with commentary in several areas: the regulatory environment and general importance of banks as an insurance distribution channel; the insurance product range, operating models and bancassurance partnerships of the ten leading banks; and future outlook for the value of the life and non-life insurance market of Zambia through to 2020.

Table Of Contents

Bancassurance in Zambia: Current State and Future Perspectives to 2020
TABLE OF CONTENTS
0.0 EXECUTIVE SUMMARY ... 1
1.0 INTRODUCTION 3
What is this report about? .. 3
The development of the bancassurance channel in Zambia is the focus of this report .. 3
Rationale . 3
Sub-Saharan Africa hosts a number of fast-growing financial services markets… 3
… with bancassurance poised to grow in several of these .. 4
Methodology ... 4
Macro-economics, banking and insurance sectors .. 4
Survey of banks .. 4
Market data . 5
Definitions ... 5
Investment-related life insurance ... 5
Retirement savings . 6
Risk life insurance ... 6
Accident insurance . 6
Health / hospital cash plans ... 6
Medical expenses insurance .. 7
Personal motor insurance .. 7
Household insurance .. 7
Creditor insurance ... 7
Travel insurance . 7
Agricultural insurance . 8
Commercial insurance 8
Mortgages and consumer finance . 8
Weighted provider share of partnerships .. 8
Operating models ... 9
Abbreviations and exchange rates 9
PartnerBASE .. 9
Finaccord .. 10
2.0 MARKET ANALYSIS ... 11
Macro-economic background .. 11
Gross domestic product and purchasing power parity (PPP) 11
Zambian GDP is likely to have grown at a compound annual rate of 9.2% between 2008 and 2014… . 11
…but poverty and employment remain key challenges . 11
Total population, age structure and level of urbanisation ... 12
The country's population is set to grow by a further 3 million between 2014 and 2018 12
Political risk 14
Zambia has experienced a significant upturn in its political stability index 14
Other key indicators .. 15
Zambian women can now expect to live to an average age of just over 60 (and men to over 56) .. 15
Mobile phone subscriptions have increased very rapidly in recent years . 16
Introduction to the banking sector ... 18

Structure of the banking sector 18
Banks with foreign parents play an important role in the Zambian banking sector… ... 18
… competing alongside a variety of non-bank financial institutions .. 18
Zanaco is the country's largest bank with around 750.000 customers .. 18
Barclays Zambia and Finance Bank are its main competitors ... 18
Development of the banking sector . 20
The number of bank branches more than doubled between 2005 and 2013 ... 20
Consumer lending . 21
The mortgage market remains in an embryonic state… 21
…and is mainly limited to high-income households ... 22
Non-mortgage consumer lending balances are poised to exceed USD 1 billion in value 23
Introduction to the insurance sector 24
Motor insurance accounts for over 40 % of all non-life insurance premiums 24
The bancassurance market . 28
Regulatory environment ... 28
Banks need to be licensed as insurance agents in order to distribute insurance policies… 28
…although many are active in this area on a referral basis ... 28
Importance of bancassurance as a distribution channel 28
The distribution share of banks is far higher in life insurance than in non-life insurance .. 28
Barclays Life was the first captive underwriter to operate in Zambia . 28
Product range, operating models and partnerships of the ten leading banks ... 29
All of the top ten banks apart from Investrust Bank are involved in bancassurance . 29
Ten (out of 15) insurance types are available from at least one of the top ten banks… ... 29
… although four from just one bank 30
Banks generally source insurance products from external underwriters ... 30
ZSIC leads by weighted share of partnerships thanks to its key relationship with Zanaco…... 31
… with Professional Life used by two of the top ten banks… 31
…and Aflife (majority-owned by Sanlam) by three . 31
Barclays Life is the one captive underwriter active in Zambia ... 31
Future outlook ... 34
The Zambian insurance market is likely to triple in value between 2014 and 2020 .. 34
More banks may be tempted to follow the example of Barclays by launching captive underwriters ... 35

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY ... 1
Bancassurance in Zambia: key data points .. 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS ... 11
GDP in current prices and PPP (purchasing power parity) per capita in Zambia, 2008 to 2020 (forecast) 12
Total population and level of urbanisation in Zambia, 2008 to 2020 (forecast) 13
Population age structure in Zambia, 2014 .. 13
Key economic indicators for Zambia, 2008, 2014 and 2020 (forecast) (table) . 14
Index of political stability, regulatory quality and rule of law in Zambia, 1996 to 2012 . 15
Life expectancy at birth in Zambia, 2005 to 2013 ... 16
Mobile phone subscriptions, fixed broadband subscriptions and fixed phone lines per 100 people in Zambia, 2005 to 2013 .. 17
Other key indicators for Zambia, 2005 to 2013 (table) ... 17
Ultimate holding companies and credit ratings of the ten largest retail banking organisations in Zambia, 2014 .. 19
Total assets, number of customers and number of branches of the ten largest retail banking organisations in Zambia, 2014 19
Number of fully-licensed banks and deposit accounts in Zambia, 2005 to 2013 . 20
Number of branches and ATMs per 100,000 adults in Zambia, 2005 to 2013 21
Key banking sector indicators for Zambia, 2005 to 2013 (table) ... 21
Residential mortgage lending balances outstanding in Zambia (absolute and per capita), 2009 to 2013 . 22
Consumer non-mortgage lending balances outstanding in Zambia (absolute and per capita), 2009 to 2013 ... 23
Key data points for the consumer lending market in Zambia, 2009 to 2013 (table) . 24
Gross written premiums for life and non-life insurance in Zambia, 2009 to 2013 25
Gross written premiums per capita and as percentage of GDP in Zambia, 2009 to 2013 .. 26
Gross written premiums for life and non-life insurance in Zambia, 2009 to 2013 (table) . 26
(table) 26
Segmentation of non-life insurance gross written premiums in Zambia, 2013 . 27
Involvement in bancassurance of the ten largest retail banking organisations in Zambia: provision of bundled and stand-alone products, 2014 ... 29
Overview of provision rates for different types of insurance offered by the ten largest retail banking organisations in Zambia, 2014 30
Bancassurance in Zambia: provision rates, weighted operating models and weighted provider share of partnerships, 2014 ... 32
Summary of use of captive and joint venture bancassurance partners by the ten largest retail banking organisations in Zambia, 2014 33
Summary of use of external bancassurance partners by the ten largest retail banking organisations in Zambia, 2014 ... 34
Forecast for gross written premiums for life and non-life insurance in Zambia to 2020 ... 35

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