TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY... 1

Transcription

1 TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY... 1 Gross written premiums across the 20 European markets amounted to over EUR 39 billion in within which mortgage-related policies made up about 70% of the total and cover for temporary incapacity and unemployment accounted for more than one quarter of premiums... 4 The leading ten groups are likely to account for around 62% of the total European market... 7 CNP Assurances is prominent for two main reasons... 7 BNP Paribas Cardif holds by far the most partnerships... 7 Creditor insurance is a relatively fast-growing business segment for CNP Assurances... 7 and it is also a demonstrably important one for several other insurance groups INTRODUCTION... 9 What is this report about?... 9 Distribution partnerships with banks and other lending institutions constitute the focus of this report... 9 with telecoms and utilities firms also included in the analyses of bill payment protection... 9 Rationale... 9 The report identifies 1,570 initiatives for marketing creditor and lifestyle protection insurance... 9 Methodology Survey of banks and other lending institutions Market data Market data for creditor and lifestyle protection insurance is generated from a proprietary methodology plus use of multiple external sources Definitions Bill payment protection insurance Creditor insurance Mortgages, consumer finance and credit cards Weighted provider share of partnerships Operating models Abbreviations and exchange rates PartnerBASE and market data annexe Finaccord EUROPEAN OVERVIEW Introduction Market analysis consumer lending Total retail lending balances outstanding in Europe are on track to exceed EUR 10 trillion before with residential mortgage lending the largest segment by far Balances for non-mortgage consumer lending are slightly higher in France than in Germany, Italy or the UK Switzerland s lending market is the largest in per capita terms followed by those of Norway and Denmark Mortgage balances per capita remain below EUR 1,000 in Russia, Romania and Turkey Consumer non-mortgage balances per capita are highest in Norway and lowest in Russia Mortgage credit has increased as a proportion of total consumer lending in most European markets The UK accounts for nearly one fifth of Europe s total credit and other pay later cards in circulation but is ranked third behind Norway and Sweden in terms of cards per capita Insurance provision rates and operating models Creditor insurance linked to mortgages A majority of mortgage lenders sell related creditor insurance in almost all countries in scope with use of a single external underwriter the preferred operating model in most of them although captive underwriters are more commonly employed in five countries When analysed on a weighted basis, the use of captive underwriters is significantly more prominent FINACCORD 01/2018) I

2 When analysed at a group level, the leading ten providers account for around 65% of this market with CNP Assurances likely to be the regional leader due to its strong position in France Creditor insurance linked to consumer finance Creditor insurance is most commonly available from providers of consumer finance in Turkey Over half a half of initiatives are organised in conjunction with a single external partner On a weighted basis, use of captive and joint venture providers becomes more prominent within the total BNP Paribas Cardif and CNP Assurances vie for regional leadership in this sphere with Crédit Agricole and Société Générale respectively ranked third and fourth Creditor insurance linked to credit cards Credit card payment protection insurance is offered most commonly by card issuers in Poland followed by Portugal and Turkey When viewed in weighted terms, captive underwriters account for nearly a third of all initiatives The captive programs of Crédit Agricole make it the regional leader for card-related insurance Bill payment protection insurance Bill payment protection is an under-developed market relative to the three types of creditor insurance Most schemes for it are placed with a single external underwriter whose share as an operating model increases in the weighted analysis MetLife claims the highest weighted share of partnerships, ahead of AXA and BNP Paribas Cardif The affinity divisions of major brokers are involved in some of the schemes identified Creditor insurance and bill payment protection risk coverage A clear majority of policies analysed cover temporary incapacity and / or unemployment but cover for critical illness is less commonly incorporated Market analysis creditor and lifestyle protection insurance The total market value is predicted to advance to EUR 45.4 billion in gross written premiums by but may be held up by the rising popularity of a new generation of online lending institutions Fair growth is predicted for the life insurance elements of creditor insurance while the value of cover for temporary incapacity and unemployment is likely to rise more quickly In terms of its value, the French market for mortgage-related creditor insurance is the largest although that of Turkey is most well-developed relative to the size of its mortgage lending sector Germany is likely to be the largest market for policies linked to point-of-sale automotive finance France hosts the largest market for creditor insurance linked to other forms of consumer finance albeit that of Turkey is predicted to increase most rapidly in nominal terms through to The relative development of the market in each country varies widely from one to another Russia is forecast to be the largest market for credit card payment protection insurance by overtaking France and Turkey in the process Poland features the highest value of premiums per card followed by the Czech Republic and Slovakia The market for bill payment protection cover is likely to be largest in France, Poland and Spain AUSTRIA Banks, other lending institutions and telecoms / utilities firms covered The banking system can be divided according to how banks operate at a national, regional and local level card complete Service Bank and Pay Life are significant in the Austrian payment card market Consumer lending market size and growth Mortgage lending Mortgage balances advanced at a steady and consistent rate between 2012 and Non-mortgage lending whereas non-mortgage lending declined slightly Credit and other pay later cards Credit card penetration in Austria is low in comparison with most European countries Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages The most significant partnerships derive from more wide-ranging strategic bancassurance initiatives such as the link of Vienna Insurance Group with Erste Group and that of UNIQA with the Raiffeisen Bankengruppe FINACCORD 01/2018) II

3 Generali works closely in Austria with both the 3-Banken-Gruppe and BAWAG PSK Creditor insurance linked to consumer finance The vast majority of lending institutions that could sell creditor insurance actually do so in reality Allianz, AXA Partners and Cardif are all used in this sphere by automotive captives Creditor insurance linked to credit cards Only two card issuers offer credit card payment protection cover Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Most creditor insurance policies comprise relatively comprehensive cover Alternative distribution channels Risk life policies that can be used to protect credit balances are available directly from a few insurers Creditor insurance market size, growth and forecast BELGIUM Banks, other lending institutions and telecoms / utilities firms covered BNP Paribas is the owner (or co-owner) of several consumer-facing banking entities in Belgium in a market that has seen some important structural changes in recent years Crédit Agricole has exited the retail banking sector but Crédit Mutuel has strengthened its presence in it China s Anbang Group has also acquired a foothold in the Belgian market Consumer lending market size and growth Mortgage lending Mortgage balances per capita exceeded EUR 18,000 at the end of Non-mortgage lending Non-mortgage balances in Belgium hit a plateau between 2014 and Credit and other pay later cards while the number of credit cards in circulation has been in retreat in recent years Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages AG Insurance ranks first by weighted share of partnerships for mortgage-related cover ahead of KBC Verzekeringen and NN Insurance Several smaller captive underwriters are active in this field, most with just one partnership Creditor insurance linked to consumer finance All but three providers of non-mortgage credit have a scheme for associated creditor insurance Cardif s distributors include automotive captives belonging to BMW and VW group Creditor insurance linked to credit cards Credit card payment protection insurance is on offer from a slim majority of card issuers Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Most mortgage-related policies lack a temporary incapacity or unemployment element Alternative distribution channels Borrowers can also choose to acquire creditor cover directly from underwriters or from insurance or mortgage brokers Creditor insurance market size, growth and forecast CZECH REPUBLIC Banks, other lending institutions and telecoms / utilities firms covered Following its divestment by GE, MONETA Money Bank has become the largest indigenous competitor Several Czech banks have fallen under new ownership in recent years Consumer lending market size and growth Mortgage lending Mortgage balances increased in value by more than EUR 8 billion between 2012 and Non-mortgage lending Non-mortgage balances also increased at a reasonably healthy rate FINACCORD 01/2018) III

4 Credit and other pay later cards although progress in the Czech credit card market has been somewhat uneven Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Captive underwriters are prominent in the Czech market for mortgage-related cover with ČSOB Pojišťovna holding the highest weighted share of partnerships followed by Pojišťovna České spořitelny, a subsidiary of Vienna Insurance Group Cardif holds relationships with five mortgage lending institutions and Allianz with two Creditor insurance linked to consumer finance ČP Zdravi is ranked in the top five insurers in this field thanks to its link with Home Credit and Cardif adds ties with PSA Finance and ŠkoFIN to its wider roster of partnerships Creditor insurance is not on offer from many of the new generation of lenders with a fintech background Creditor insurance linked to credit cards Card-related creditor insurance is available from a majority of credit cards issuers in the Czech Republic Cardif and Komerční pojišťovna hold the most partnerships in this field Bill payment protection insurance Schemes for bill payment protection have been established by a number of distributors Creditor insurance and bill payment protection risk coverage Compared to other European countries, policies in the Czech Republic incorporate comprehensive cover Alternative distribution channels Most creditor and lifestyle protection business is sold via lending institutions Creditor insurance market size, growth and forecast DENMARK Banks, other lending institutions and telecoms / utilities firms covered The Danish banking market remains fragmented although the number of smaller entities has diminished Consumer lending market size and growth Mortgage lending Mortgage balances stagnated between 2012 and Non-mortgage lending and non-mortgage balances declined quite significantly Credit and other pay later cards Credit cards in circulation fell in 2013 before increasing in subsequent years Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages By weighted share of partnerships, three entities account for over three quarters of the market The duo of Letpension and PFA holds numerous partnerships with smaller banks Danica Pension is likely to be the largest captive insurer in this field Creditor insurance linked to consumer finance Over a half of lending institutions that could sell creditor insurance actually do so in reality and AXA holds the highest number of deals in this field although its weighted share remains low Over 20 providers of consumer finance have no arrangement for related creditor insurance Creditor insurance linked to credit cards AXA also holds the most ties for credit card payment protection insurance in Denmark Bill payment protection insurance Both AmTrust and Cardif are seeking to compete in this arena Creditor insurance and bill payment protection risk coverage The majority of policies are comprehensive and include cover for temporary incapacity / unemployment Alternative distribution channels Creditor insurance market size, growth and forecast FINLAND FINACCORD 01/2018) IV

5 Banks, other lending institutions and telecoms / utilities firms covered Numerous local co-operative and savings banks are active in the Finnish market although it is fairly concentrated at a group-wide level Several banks compete at the pan-nordic level Consumer lending market size and growth Mortgage lending Between 2012 and 2016, mortgage balances advanced steadily to more than EUR 90 billion Non-mortgage lending and non-mortgage balances to almost EUR 30 billion Credit and other pay later cards Growth in credit cards in circulation has been more rapid Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Six underwriters are active in the market for mortgage-related creditor insurance among which LähiTapiola and AXA are likely to be the leaders Creditor insurance linked to consumer finance AXA is also a leader in payment protection insurance cross-sold with consumer finance as a result of five partnerships in this arena Creditor insurance linked to credit cards Only one credit card issuer in scope ran a scheme for card payment protection insurance Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Around a half of all policies analysed incorporate cover for critical illness Alternative distribution channels Creditor insurance market size, growth and forecast FRANCE Banks, other lending institutions and telecoms / utilities firms covered The French consumer banking sector is a fairly concentrated one and all major banking groups have set up captive insurance providers Consumer lending market size and growth Mortgage lending Mortgage lending balances per capita reached EUR 15,445 in Non-mortgage lending Growth in non-mortgage consumer lending has been more subdued Credit and other pay later cards Several major card issuers have terminated a high number of inactive or under-performing accounts Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages CNP Assurances leads the French market for mortgage-related creditor insurance and has put in place new arrangements with Groupe BPCE and La Banque Postale Most of the other leading competitors are captive underwriters although smaller opportunities exist for non-captives Creditor insurance linked to consumer finance CNP Assurances is also ranked first for creditor insurance sold in conjunction with non-mortgage loans ahead of captive underwriters belonging to Crédit Mutuel and Société Générale CACI, Cardif and Swiss Life hold multiple partnerships with automotive captives and specialised lenders Creditor insurance linked to credit cards Captive underwriters belonging to Crédit Agricole and Groupe BPCE are likely to be leaders in this field with those of BNP Paribas and Crédit Mutuel also prominent Bill payment protection insurance AXA and CNP Assurances have both won partnerships for bill payment protection cover FINACCORD 01/2018) V

6 Creditor insurance and bill payment protection risk coverage The status of France as a mature market for creditor insurance means that risk coverage is broad Alternative distribution channels A series of regulatory interventions has fuelled the development of alternative distribution channels with mortgage borrowers increasingly free to switch their creditor cover to non-tied insurers Policies can be bought directly from most large life and non-life insurers, including major mutuals plus both long-established wholesale brokers and newer online comparison websites Key competitors in this context are APRIL, BPSI s-naoassur and CBP plus several multi-line aggregators and specialists such as Crédit Assurance and Magnolia.fr However, lending institutions remain the single most important distribution channel for this policy type Creditor insurance market size, growth and forecast GERMANY Banks, other lending institutions and telecoms / utilities firms covered The German banking market can be divided into three main categories including private sector banks plus public sector and co-operative banks Taken as a whole, the co-operative banks possess the most retail branches in Germany Consumer lending market size and growth Mortgage lending Mortgage balances advanced at a steady and consistent rate between 2012 and Non-mortgage lending as did non-mortgage balances Credit and other pay later cards Growth in credit cards in circulation has been more rapid Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Germany s still-fragmented banking market produces a fairly fragmented market for creditor insurance Allianz has strengthened its position as a result of becoming the strategic partner for HypoVereinsbank AXA Partners benefits from its relationship in this sphere with Santander Consumer Bank Creditor insurance linked to consumer finance Over 80% of lending institutions that could sell creditor insurance actually do so in reality Cardif has been most prolific in establishing distribution partnerships in this arena although a number of other specialised underwriters are present in it including Protect, which distributes through public sector savings banks Creditor insurance linked to credit cards CNP Santander is ranked first by weighted share of partnerships for credit card payment protection cover Bill payment protection insurance Several insurers are potentially able to offer bill payment protection cover Creditor insurance and bill payment protection risk coverage Most policies offer comprehensive cover although cover for critical illness is not usually available Alternative distribution channels Hannoversche promotes creditor insurance directly to consumers Consumer research shows that mortgage-related policies are often bought via alternative channels Creditor insurance market size, growth and forecast ITALY Banks, other lending institutions and telecoms / utilities firms covered Four, or arguably five, retail banking groups lay claim to a genuinely nationwide network although these are challenged by an array of ambitious regional competitors including the 'banche di credito cooperative' and 'casse Raiffeisen' as well as a few insurer-owned banks and banks falling under foreign ownership Consumer lending market size and growth Mortgage lending The value of mortgage balances outstanding changed little between 2012 and FINACCORD 01/2018) VI

7 Non-mortgage lending Non-mortgage consumer lending balances have risen slightly from a low point reached in Credit and other pay later cards The number of credit and other pay later cards in circulation has been in steady decline Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Creditor insurance is on offer from all mortgage lenders in Italy and the field is dominated by captive and joint venture providers UniCredit s history means that it continues to employ multiple joint venture underwriters Several underwriters have built up distribution relationships with a number of smaller banks Creditor insurance linked to consumer finance Virtually all providers of non-mortgage credit are distributors of associated creditor insurance Many partnerships in this sphere are identical to those for mortgage-related creditor insurance although the large number of specialist consumer credit providers results in a more diverse market Creditor insurance linked to credit cards Schemes for credit card payment protection insurance are less widespread Bill payment protection insurance and those for bill payment protection insurance are even less common Creditor insurance and bill payment protection risk coverage Across all policy types, cover for temporary incapacity and / or unemployment is widely available Alternative distribution channels Credit intermediaries constitute a significant alternative distribution channel for creditor insurance especially in the market for so-called 'cessione del quinto' or workplace loans Creditor insurance market size, growth and forecast NETHERLANDS Banks, other lending institutions and telecoms / utilities firms covered The Dutch banking market has restructured but remains relatively concentrated Consumer lending market size and growth Mortgage lending The Dutch mortgage market is very large but its value has stagnated in recent years Non-mortgage lending and non-mortgage lending balances have declined precipitously Credit and other pay later cards Credit cards per capita remain at a fairly modest level in comparison to some other European countries Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Captive and joint venture insurers are prominent in the market for mortgage-related cover Brokers may be as important as mortgage lenders for this type of insurance The Nationale Hypotheek Garantie is important in the context of mortgage-related insurance Creditor insurance linked to consumer finance Very few schemes remain for either loan payment protection insurance Creditor insurance linked to credit cards or for card-related creditor insurance Bill payment protection insurance Housing protection insurance can act as a substitute product for bill payment protection Creditor insurance and bill payment protection risk coverage Policies distributed by lenders focus mainly on cover for death and permanent disability Alternative distribution channels Both mortgage-related cover and substitute products are commonly acquired from brokers Creditor insurance market size, growth and forecast Regulatory intervention by the Autoriteit Financiële Markten has had a substantial effect on the market FINACCORD 01/2018) VII

8 with a decree issued in 2013 causing three main areas of impact NORWAY Banks, other lending institutions and telecoms / utilities firms covered The banking market is composed of a mixture of indigenous and foreign entities Consumer lending market size and growth Mortgage lending Mortgage balances advanced at a steady and consistent rate between 2012 and Non-mortgage lending as did non-mortgage balances Credit and other pay later cards The number of credit cards in circulation fell in 2013 before rising strongly in subsequent years Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Captive and joint venture underwriters dominate Norway s market for mortgage-related cover although at least one captive insurer also works with external partners Creditor insurance linked to consumer finance Insurers owned by DNB and SpareBank 1 Gruppen are most prominent in the weighted analysis followed by Cardif AXA has established multiple distribution partnerships in this arena with smaller lending institutions Six (out of 39) lenders have no arrangement for related creditor insurance Creditor insurance linked to credit cards Credit card payment protection cover is available from almost a half of card providers in Norway Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Critical illness cover is commonly incorporated in creditor insurance policies Alternative distribution channels Creditor insurance market size, growth and forecast POLAND Banks, other lending institutions and telecoms / utilities firms covered Several of the top ten banking institutions by retail customers are owned by foreign parents although the market leader, PKO Bank Polski, is an indigenous institution A number of foreign groups have exited Poland s retail banking market in recent years Consumer lending market size and growth Mortgage lending Mortgage lending balances per capita reached just under EUR 2,500 in Non-mortgage lending Non-mortgage consumer lending has also shown significant and consistent growth Credit and other pay later cards but the number of credit cards in circulation has been falling consistently since Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages PKO TU, AXA and Allianz are likely leaders in the Polish market for mortgage-related creditor cover followed by Nationale-Nederlanden and BZ WBK-Aviva Ample smaller opportunities exist for non-captive underwriters Creditor insurance linked to consumer finance PKO TU is also ranked first for creditor insurance sold in conjunction with non-mortgage loans with many of the partnerships for mortgage-related creditor insurance carrying over to consumer finance CACI Life / CACI Non-Life and ERGO Hestia hold multiple partnerships with non-bank lending institutions Newer mobile and online lending institutions have thus far eschewed distribution of creditor insurance Creditor insurance linked to credit cards Most credit card issuers in Poland have a scheme for related payment protection cover FINACCORD 01/2018) VIII

9 and a number of the partnerships in question are unique to this particular field Bill payment protection insurance Several schemes for bill payment protection cover exist among telecoms and utilities firms with four underwriters having won mandates in this sphere Creditor insurance and bill payment protection risk coverage A comparatively high proportion of policies in Poland incorporate critical illness cover Alternative distribution channels Some insurance companies (and agents) promote creditor insurance directly to their customers Creditor insurance market size, growth and forecast PORTUGAL Banks, other lending institutions and telecoms / utilities firms covered More recent banking sector re-organisation has involved ABANCA, Barclaycard and NOVO BANCO Consumer lending market size and growth Mortgage lending Mortgage balances outstanding in Portugal fell consistently between 2012 and Non-mortgage lending but non-mortgage consumer lending balances ticked up in Credit and other pay later cards Credit cards per capita reached 0.79 in 2016 having bottomed out at 0.75 in Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages The top three underwriters hold a combined weighted share of partnerships of well over 50% Ageas has taken complete control of Ocidental Seguros but Ocidental Vida remains a joint venture Six captive underwriters compete in the Portuguese market for mortgage-related creditor insurance Creditor insurance linked to consumer finance Loan payment protection cover is on offer from nearly all providers of non-mortgage credit Cardif and MetLife hold the most partnerships in this sphere Creditor insurance linked to credit cards The supply structure for card-related creditor insurance is a comparatively fragmented one Bill payment protection insurance Just one program is identifiable for bill payment protection cover Creditor insurance and bill payment protection risk coverage Few policies incorporate cover for critical illness (as opposed to death or permanent disability) Alternative distribution channels Mortgage-related creditor insurance policies are often available directly from insurers and several intermediaries are also active in this field Creditor insurance market size, growth and forecast ROMANIA Banks, other lending institutions and telecoms / utilities firms covered Foreign banking groups play an important role in the Romanian banking sector and the lending market is populated by a growing number of online competitors Consumer lending market size and growth Mortgage lending Mortgage balances increased rapidly from 2014 onwards Non-mortgage lending but non-mortgage balances have been in retreat Credit and other pay later cards Credit cards per capita remain low in comparison to most European countries Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Mortgage-related creditor insurance is organised through a variety of operating models FINACCORD 01/2018) IX

10 Groupama enjoys ties in this sphere with three banks, including two of the largest ones and is followed by UNIQA, BCR Asigurări and BRD Asigurări in terms of weighted partnerships Several smaller mortgage lending institutions have no arrangement for related creditor insurance Creditor insurance linked to consumer finance Cardif s tie with sister company Cetelem causes it to be ranked fifth in this sector and there are several other partnerships unique to non-mortgage credit albeit a significant number of lenders do not distribute this type of insurance Creditor insurance linked to credit cards Seven schemes exist for credit card payment protection insurance albeit only one underwriter has more than one partnership in this field Bill payment protection insurance Via its affinity division, UNIQA has developed a bill payment protection policy Creditor insurance and bill payment protection risk coverage Products incorporating cover for temporary incapacity and / or unemployment are comparatively rare Alternative distribution channels Creditor insurance is available directly from at least two underwriters and one broker Creditor insurance market size, growth and forecast RUSSIA Banks, other lending institutions and telecoms / utilities firms covered State-controlled banks continue to exert a strong influence on Russia s banking sector and the experience of foreign entrants has been mixed Consumer lending market size and growth Mortgage lending The authorities have sought to encourage home ownership through subsidising the mortgage market Non-mortgage lending Progress in the Russian consumer credit market has been much less even Credit and other pay later cards and this inconsistency is also visible in the data about credit cards in circulation Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Russian banks adhere to a variety of operating models for mortgage-related creditor insurance with four of the five leading providers classifiable as captives albeit some of these also act as external underwriters for banks apart from their parents Many mortgage lenders offer insurance from multiple providers which is partly a consequence of the regulatory environment in this field although others do not have any kind of agency agreement at all Creditor insurance linked to consumer finance Sberbank Strakhovanie is the leader by weighted share of partnerships followed by Russian Standard Insurance, VTB Insurance and Cardif Cardif is used in this field by at least six lenders in addition to Cetelem Other significant providers include AlfaStrakhovanie, Home Credit Strakhovanie and Renaissance MetLife works with major automotive dealer groups and retailers as well as lending institutions Creditor insurance linked to credit cards Credit card payment protection insurance is available from most of the larger card issuers and over 20 different underwriters are involved in this field Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Around three quarters of policies analysed offer cover that is relatively comprehensive Alternative distribution channels Borrowers can also acquire cover directly from major insurers Creditor insurance market size, growth and forecast SLOVAKIA FINACCORD 01/2018) X

11 Banks, other lending institutions and telecoms / utilities firms covered Many lending institutions in Slovakia have ultimate holding companies based overseas Consumer lending market size and growth Mortgage lending Mortgage balances outstanding increased considerably between 2012 and Non-mortgage lending as did non-mortgage consumer lending balances Credit and other pay later cards By the end of 2016, there were almost 1 million credit cards in circulation in Slovakia Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Creditor insurance is on offer from all mortgage lenders in Slovakia with Cardif and ČSOB Pojišťovna ranked as leaders in this field Creditor insurance linked to consumer finance Loan payment protection insurance is on offer from most non-mortgage lending institutions Cardif benefits from additional partnerships in this field Creditor insurance linked to credit cards and is also a clear leader in the market for card-related creditor insurance Bill payment protection insurance Allianz and MetLife have established partnerships with major mobile network operators Creditor insurance and bill payment protection risk coverage Policies in Slovakia typically incorporate relatively comprehensive cover Alternative distribution channels Creditor insurance market size, growth and forecast SPAIN Banks, other lending institutions and telecoms / utilities firms covered The Spanish banking sector has been re-shaped by numerous mergers and acquisitions with Santander and BBVA ranked first by number of retail customers and with Santander having taken over Grupo Banco Popular at the start of June Consumer lending market size and growth Mortgage lending Mortgage balances declined at a nominal compound annual rate of 4.1% between 2012 and Non-mortgage lending The value of total non-mortgage consumer lending has rebounded from the trough of Credit and other pay later cards Credit and other pay later cards per capita moved up from 0.88 in 2012 to 1.00 in Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Virtually all Spanish mortgage lenders offer related creditor insurance with captive and joint venture underwriters prominent in this context Several mortgage lenders use a hybrid operating model for this type of creditor insurance as a result of the fact that it combines both life and non-life elements Creditor insurance linked to consumer finance Providers of non-mortgage credit are also enthusiastic distributors of related creditor insurance Many partnerships in this sphere are identical to those for mortgage-related creditor insurance although the large number of specialist consumer credit providers results in a more diverse market Ten of the lending institutions surveyed are lacking a proposition in this field Creditor insurance linked to credit cards Credit card payment protection insurance is less commonly marketed in Spain Bill payment protection insurance and schemes for bill payment protection cover are also comparatively few FINACCORD 01/2018) XI

12 Creditor insurance and bill payment protection risk coverage Most policies include an option to cover temporary incapacity and / or unemployment Alternative distribution channels Several major insurers offer mortgage-related creditor insurance directly to consumers although brokers are not thought to be significant in this context Creditor insurance market size, growth and forecast SWEDEN Banks, other lending institutions and telecoms / utilities firms covered Sweden s banking market is mainly populated by indigenous organisations including many local savings banks that are affiliated to Swedbank Recent years have seen an influx of online lenders deploying smart technologies Consumer lending market size and growth Mortgage lending Mortgage balances increased in value by more than EUR 70 billion between 2012 and Non-mortgage lending Non-mortgage balances also increased at a reasonably healthy rate Credit and other pay later cards although in terms of the number of cards issued, the credit card market remained quite flat Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Captive underwriters are especially prominent in the Swedish market for mortgage-related cover albeit the status of Swedbank Försäkring is not always that of a captive AXA Partners holds important relationships with three mortgage lending institutions Creditor insurance linked to consumer finance AXA Partners has also been prolific in creating ties for creditor insurance linked to consumer finance including one with IKANO Bank caused by the bank s sale of its captive underwriters Cardif Nordic also maintains multiple distribution partnerships in this field and there is then a fairly long tail of smaller competitors Most of the new generation of lenders with a fintech background do not intermediate creditor insurance Creditor insurance linked to credit cards Nearly a half of organisations offering credit cards also promote related payment protection cover AmTrust Nordic is most likely to be the leading underwriter in this arena Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Cover for critical illness features in a significant proportion of all policies analysed Alternative distribution channels Borrowers can also acquire payment protection cover from brokers such as Freedom Finance and Lendo Creditor insurance market size, growth and forecast SWITZERLAND Banks, other lending institutions and telecoms / utilities firms covered Credit Suisse and UBS account for over 50% of Swiss banking assets Most cantonal banks are backed by regional governments Many of Switzerland's savings banks belong to the Clientis grouping Consumer lending market size and growth Mortgage lending Residential mortgage balances per capita reached EUR 78,745 at the end of Non-mortgage lending but non-mortgage balances declined between 2012 and Credit and other pay later cards At the end of 2016, there were around 6.4 million credit cards in circulation Insurance provision rates, operating models and partnerships FINACCORD 01/2018) XII

13 Creditor insurance linked to mortgages Switzerland s market for mortgage-related creditor insurance is a fairly concentrated one Schweizerische Mobiliar benefits from numerous partnerships with cantonal banks Helvetia is the underwriter employed by both Credit Suisse and Raiffeisen Switzerland Swiss Life is the preferred bancassurance partner of UBS Creditor insurance linked to consumer finance Chubb dominates the weighted analysis of partnerships thanks to its relationship with cashgate Many of relationships for mortgage-related cover carry over to this type of creditor insurance although there are a number of unique ones, especially among automotive captives Creditor insurance linked to credit cards Chubb is also ranked first by weighted share of partnerships for credit card payment protection cover Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Most policies afford comprehensive protection including cover for critical illness Alternative distribution channels Creditor insurance is also on offer from a few online credit brokers in Switzerland Creditor insurance market size, growth and forecast TURKEY Banks, other lending institutions and telecoms / utilities firms covered The five largest banking networks by number of retail customers still have Turkish owners although foreign competitors have entered the market, often through acquisitions These include Burgan Bank, Commercial Bank of Qatar, QNB and Sberbank Consumer lending market size and growth Mortgage lending Mortgage balances almost doubled in value between 2012 and Non-mortgage lending albeit growth in non-mortgage lending balances tapered off somewhat from 2014 onwards Credit and other pay later cards Credit cards in circulation are likely to break through 60 million in the near future Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages By weighted share of partnerships, four entities account for nearly half of the market led by Allianz, Anadolu Hayat Emeklilik and AvivaSA Four of the underwriters ranked from fourth to eighth are captives with MetLife the exception in this context Creditor insurance linked to consumer finance The vast majority of providers of non-mortgage loans have a scheme for creditor insurance and provider shares are driven mainly by the same ties as for mortgage-related creditor insurance albeit Cardif also benefits from several relationships in this sphere Creditor insurance linked to credit cards Credit card payment protection cover is commonly on offer from Turkish card issuers and the leading seven providers are quite closely bunched by weighted share of partnerships Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Around two thirds of policies include an option to cover temporary incapacity and / or unemployment Alternative distribution channels Regulatory intervention has yet to spur the development of alternative distribution channels Creditor insurance market size, growth and forecast UK Banks, other lending institutions and telecoms / utilities firms covered The UK lending market is populated by a very broad variety of competitors FINACCORD 01/2018) XIII

14 Consumer lending market size and growth Mortgage lending Mortgage balances outstanding stagnated between 2012 and Non-mortgage lending but consumer credit balances have been growing rapidly since Credit and other pay later cards The number of credit cards in circulation reached 66.1 million in Insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Mortgage-related life insurance is available from most significant mortgage lending institutions Aviva, Legal & General and Scottish Widows are dominant by weighted share of partnerships albeit with the former insurer having been replaced by AIG as the partner of RBS Group in July Wren Sterling works as an intermediary for this type of insurance with ten building societies Creditor insurance linked to consumer finance and credit cards Regulatory intervention has put an end to any market for these types of cover Bill payment protection insurance Creditor insurance and bill payment protection risk coverage Mortgage-related policies distributed by lending institutions are limited to types of life insurance cover Alternative distribution channels Mortgage-related life insurance can be bought directly from several underwriters and also on an intermediated basis from many aggregators and brokers Short-term income protection (ASU) insurance has developed as a niche substitute product Consumer research shows that most mortgage life insurance is not bought from the lenders themselves Creditor insurance market size, growth and forecast Citizens Advice filed its original super-complaint as long ago as September on the basis of at least five concerns Lending institutions began to withdraw from the payment protection market from 2007 onwards and have already paid refunds and compensation to customers with a value approaching GBP 30 billion FINACCORD 01/2018) XIV

15 LIST OF GRAPHICS / TABLES 0.0 EXECUTIVE SUMMARY... 1 Summary table: gross written premiums for total creditor and lifestyle protection insurance in Europe, 2012, 2016 and 2020 (forecast) INTRODUCTION... 9 Banks, other lending institutions and telecoms / utilities firms in Europe researched by Finaccord, segmented by country and type EUROPEAN OVERVIEW Total consumer lending balances outstanding in Europe, segmented by country, Total consumer lending balances outstanding in Europe, segmented by country, 2012 to Total consumer lending balances outstanding in Europe, segmented by country, 2012 to 2016 (table) Residential mortgage balances outstanding in Europe, segmented by country, Residential mortgage balances outstanding in Europe, segmented by country, 2012 to Residential mortgage balances outstanding in Europe, segmented by country, 2012 to 2016 (table) Consumer non-mortgage balances outstanding in Europe, segmented by country, Consumer non-mortgage balances outstanding in Europe, segmented by country, 2012 to Consumer non-mortgage balances outstanding in Europe, segmented by country, 2012 to 2016 (table) 28 Total consumer lending balances outstanding per capita in Europe, segmented by country, Total consumer lending balances outstanding per capita in Europe, segmented by country, 2012 to 2016 (table) Residential mortgage lending balances outstanding per capita in Europe, segmented by country, Residential mortgage lending balances outstanding per capita in Europe, segmented by country, 2012 to 2016 (table) Consumer non-mortgage lending balances outstanding per capita in Europe, segmented by country, Consumer non-mortgage lending balances outstanding per capita in Europe, segmented by country, 2012 to 2016 (table) Consumer non-mortgage balances outstanding as a percentage of total consumer lending balances outstanding in Europe, segmented by country, 2012 to 2016 (table) Total number of credit and other pay later cards issued in Europe, segmented by country, Total number of credit and other pay later cards issued in Europe, segmented by country, 2012 to Total number of credit and other pay later cards issued in Europe, segmented by country, 2012 to 2016 (table) Total number of credit and other pay later cards issued per capita in Europe, segmented by country, 2012 to Total number of credit and other pay later cards issued per capita in Europe, segmented by country, 2012 to 2016 (table) Provision rates for creditor insurance linked to mortgages in Europe, segmented by country, Operating models (unweighted) used for creditor insurance linked to mortgages in Europe, segmented by country, Operating models (unweighted) used for creditor insurance linked to mortgages in Europe, segmented by country, 2017 (table) Operating models (weighted) used for creditor insurance linked to mortgages in Europe, segmented by country, Operating models (weighted) used for creditor insurance linked to mortgages in Europe, segmented by country, 2017 (table) Weighted group share of bancassurance partnerships for creditor insurance linked to mortgages in Europe, re-weighted by country market size, 2016 / Provision rates for creditor insurance linked to consumer finance in Europe, segmented by country, FINACCORD 01/2018) XV