What forms of the bancassurance alliance model is ... - Emerald

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JM2 3,3 If A is a consistency matrix, eigenvector X can be calculated by: ðA 2 l max IÞX ¼ 0: ð4Þ 210 2.2.3 Consistency test. Saaty (1990) proposed utilizing consistency index (CI) and consistency ratio (CR) to verify the consistency of the comparison matrix. CI and RI are defined as follows: CI ¼ l max 2 n n 2 1 ; ð5Þ CR ¼ CI RI ; ð6Þ where RI represents the average CI over numerous random entries of same order reciprocal matrices. If CR # 0:1, the estimate is accepted: otherwise, a new comparison matrix is solicited until CR # 0:1. 2.3 Overall hierarchy weight computation After weight computation for the various hierarchies and elements, then compiles the overall hierarchy weight computation, and finally to decide our goal of the most suitable plan. 3. Evaluation process for the preferable bancassurance alliance model In this paper, bancassurance alliance models are classified into six categories stand on the bank whether direct cross-operation insurance business activities by the current status and business model of bancassurance in Taiwan. We introduce the following alliance models. 3.1 Direct cross-operation . Financial holding company (FHC). An FHC is a financial conglomerate that engages in at least two different financial industries as a single entity, including the banking, security, and insurance industries (Li, 2006). For the purposes of this study, FHC means a company that is established in accordance with Taiwan’s “Financial Holding Company Act” and has a controlling interest in a bank or an insurance company. . Holding shareholding (HS). The bank makes equity investment in insurance companies. It becomes an insurance companies’ limited liability shareholder. . Establishing a new joint venture (JV). A bank and an insurance company jointly establish another, new insurance company. 3.2 Indirect involvement . Precompetitive alliances (PA). For purposes of this study, indirect involvement means that the agreement or the cooperative relationship is usually established according to the terms of a written contract. Moreover, it has a specified duration and does not establish another, new company.
. Establishing insurance intermediaries. A bank invests to establish an insurance “agency” or “brokerage” (IA or IB) company and then an agent or a broker contract with the insurance companies. At the same time, the bank sells products of these insurance companies and gains commissions. The difference between insurance agents and insurance brokers is that agents can be a substitute for insurance companies to issue policies, insurance brokers cannot. The proposed evaluation model aimed at determining the preferable bancassurance alliance model for Taiwan’s customers through the following steps. 3.2.1 Step 1: define the evaluative criteria and sub-criteria for determining the preferable bancassurance alliance model e and establish a hierarchical framework. Here, the modified Delphi method (Murry and Hammons, 1995) is applied to define the evaluation criteria and sub-criteria. About 12 experts contain two financiers, two academicians, and eight the advanced or well-informed customers are then issued a preliminary questionnaire in which three evaluation criteria and nine evaluation sub-criteria are incorporated and are described in the definition of operation type for each criterion. Finally, based on the modified Delphi method, there was a general consensus among experts that a hierarchical structure should be established. The preferable choices for a bancassurance alliance model can be selected and assessed based on three evaluation criterion, nine evaluation sub-criterion and, finally, the alternatives (Figure 1). Bancassurance alliance model 211 3.3 Executive aspect (C 1 ) Customers will consider the financial institution’s operating conditions, financial products and sales channels before they purchase insurance products. And then select a sound and stable bancassurance alliance to be traded: . Product development (SC 1 ). Financial institutions should grasp the different needs of the customers to develop new financial products for them, such as endowment insurance, credit insurance and investment-linked product. . Economies of scale (SC 2 ). Here is to mean the service network rationalization. In other words, the service networks of a financial institution should be average distribution in the Taiwan area for customers’ convenience. . Stability of the operation (SC 3 ). For customers, it is very important that financial institutions whether have sufficiency of capital, solvency and solidity. Because of this may affect customers’ rights and interests. 3.4 Supervisor aspect (C 2 ) The customers will evaluate that the supervisory authorities whether effectively supervise the financial alliance before they purchase financial products. If supervisory authorities cannot supervise effectively, the customer may choose in the traditional sector to transact: . System risk control (SC 4 ). Systemic risk is usually caused by environmental factors, such as the overall political, economic, and social conditions. The characteristic of the system risks is that if one business operator fails, so happens to a second and a third one, etc. It was stated that efficient supervision is the way to prevent the realization of system risks (Korhonen et al., 2005).
Page 1 and 2: The current issue and full text arc
Page 3: 2.2 Various hierarchies’ elements
Page 7 and 8: . Supervisory authorities has bette
Page 9 and 10: FHC HS JV PA IA IB SC 1 FHC 1 3.364
Page 11 and 12: Criteria C 1 C 2 C 3 Weights of cri
Page 13: Murry, J.W. and Hammons, J.O. (1995

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