HSBC plans to double the proportion of profits it makes from insurance by 2012. The world’s third largest bank has decided it is under-represented in this area.
HSBC has told shareholders and financial analysts that it makes $2bn a year, approximately 10 per cent of pre-tax profits, from insurance, but wants to double that to 20 per cent.
The bank has increased its focus on insurance lines, moving Clive Bannister from the important private banking division to a new job heading the insurance business globally.
Stephen Green, executive chairman, told the FT this month that insurance was a “key part” of the sales effort.
“Our penetration rates for insurance products are not always as good as they could be, either by our own benchmarks or by external benchmarks,” he said.
“It’s quite a fragmented business that we’ve got, which has developed in some ways off the back of acquisitions of other businesses, but I think there’s a lot we can do with it.”
Putting the business under a global chief could help integrate the bank’s different business lines, which provide a wide range of services from underwriting to sales, but vary from country to country.
The company confirmed that it was aiming to double the insurance profits, but it is unclear whether it will need to make acquisitions to achieve this, as efforts to cross-sell insurance through bank branches have made little headway outside France and emerging markets.
HSBC is set to provide details of its insurance profits for the first time when it announces interim results this summer.
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