Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Europe Series Prospectus December 2012 1
Prospectus contents Page What is the research? Which titles are available? Which features and services can card protection insurance incorporate? What methodology has been used? How does the consumer sample break down? What is the report structure? What are the key features of the research? How can the research be used? Who can use the research? What are some of the key findings? What is the cost and format? How can the research be purchased? 3 4 5 6 7 8 9 10 11 12-15 16 17 2
What is the research? Finaccord s Card Protection Metrics series of reports offer unique and detailed insights into the behaviour of cardholders in the context of card protection insurance. Based on a primary survey of over 6,000 consumers in France, Germany, Italy, Poland, Spain and the UK carried out in the second half of 2012, the research provides valuable data describing the extent to which consumers with debit and / or credit cards take out card protection insurance. In addition to calculating the percentage of cardholders holding card protection insurance in each country, the investigation also analyses the types of policy that they hold (i.e. insurance that they are paying for separately or 'free' cover), the range of features and services that they believe that their insurance includes, and the distribution channels and interfaces used to take out card protection insurance paid for separately. Finally, the reports measure the extent to which respondents with card protection insurance actually use their policy to make a claim or call for assistance, thereby calculating the implied annual ratio of usage to total policies in force. 3
Which titles are available? The Card Protection Metrics series is composed of seven separate publications, namely: an overview study providing comparisons for the metrics gathered across all six countries as well as the results for each country; and six country-specific titles providing the results for the investigation into card protection insurance for a single country. The titles in question are as follows: Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Europe Card Protection Metrics: Consumer Approaches to Card Protection Insurance in France Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Germany Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Italy Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Poland Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Spain Card Protection Metrics: Consumer Approaches to Card Protection Insurance in the UK 4
Which features and services can card protection insurance incorporate? Features and services that card protection insurance can incorporate and about which the reports in the Card Protection Metrics series explore consumer perceptions are the following: - dedicated telephone number for reporting lost or stolen cards - emergency cash if the card is lost or stolen abroad - legal or other assistance in the event that the card is cloned - notification of new address to all companies providing payment cards to respondents - protection in the event of fraudulent use of card if lost or stolen - replacement cash if cash is lost or stolen with card or while using card to withdraw cash -reimbursement if travel tickets are lost or stolen with card - reimbursement if driving licence, identity card or passport are lost or stolen with card - reimbursement if handbag or wallet are lost or stolen with card - reimbursement if house or luggage keys are lost or stolen with card - reimbursement if mobile phone is lost or stolen with card - reimbursement of goods acquired with card if lost or stolen following purchase - SMS text message sent to mobile phone each time card is used to make a payment - some or all these services for all of payment cards held - some or all these services for other family members with payment cards living at the same address 5
What methodology has been used? The research for this study, which covers over 6,000 consumers in six European countries, was carried out during the second half of 2012 using an online research methodology. A breakdown of the eventual sample by country, age group and annual household income is presented on the following page. Additional breakdowns by geographical region of respondents in each country are provided in the reports themselves. 6
How does the consumer sample break down? The research for this study, which covers over 6,000 consumers across six European countries, was carried out during August and September 2012. A breakdown of each country s sample by age and annual household income is presented below. SEGMENTATION BY AGE SEGMENTATION BY ANNUAL HOUSEHOLD INCOME 100% 100% 65+ Upper 80% 80% 55 64 60% 45 54 60% Middle 40% 35 44 40% 20% 25 34 20% Lower 18 24 0% France Germany Italy Poland Spain UK 0% France Germany Italy Poland Spain UK 7
What is the report structure (for the overview report)? 0. Executive Summary: providing a concise evaluation of the principal findings of the report. 1. Introduction: offering rationale and definitions. 2. European Overview: this chapter provides a comparison across all six countries of the proportion of cardholders with card protection insurance and how this penetration rate varies between respondents according to the type(s) of cards that they hold and according to their age, annual household income, employment status and gender. It also differentiates insured cardholders between those paying separately for their insurance and those who acquired their insurance at no extra cost through packaging with an added value account or payment card. In addition, it highlights the features and services of card protection insurance which insured respondents believe that they have access to, compares the distribution interfaces used to acquire policies paid for separately (namely, a face-to-face setting, online, a telephone call to the insurance provider, a telephone call from the insurance provider or the post) and the distribution channels used in the same context. Finally, it presents data illustrating the extent to which insured cardholders actually ever use their policy to make a claim or call for assistance, facilitating computation of an implied annual ratio of usage to total policies in force. 3. France: this chapter presents the same information as described above exclusively as it pertains to consumer approaches to card protection insurance in France. 4-8: Germany, Italy, Poland, Spain and UK (all contents as for France). 9. Appendix: including a full transcript of the online questionnaire used for the research. 8
What are the key features of the research? Key features of the reports in this series include: robust analyses showing the percentage of cardholders that acquire card protection insurance in each country, the potential for this proportion to grow further and how cross-selling rates differ between debit and credit cards; the key segmentation of insured respondents between those that report acquiring their card protection policy at no additional cost (i.e. bundled with an added value account or payment card) and those making a separate payment for it; unique data describing the proportion of cardholders in each country stating that their insurance provides them with particular features and services, including whether it covers all of their own cards plus those of other family members; accurate statistics illustrating the extent to which sales of card protection insurance are made through remote interfaces (i.e. internet, telephone and post) as well as through face-to-face contact; reliable information displaying how many insured cardholders in each country actually use their policy each year and, among those that do, whether they do so once, twice or three or more times. 9
How can the research be used? You may be able to use the reports in this series in one or more of the following ways: understand the differing penetration rates of card protection insurance among cardholders in France, Germany, Italy, Poland, Spain and the UK, and the variations that occur for particular sociodemographic groups; appreciate how many cardholders are paying separately for their card protection insurance and how many acquire it packaged with an added value account or payment card as a 'free' benefit; evaluate the evidence for increasing penetration of card protection insurance by enriching the features and services that are offered to cardholders by means of such policies; consider the likely success in each country of developing or optimising online distribution channels to promote card protection insurance to uninsured cardholders; assess the degree to which cardholders with card protection insurance actually use their policy in any given year to make a claim or to call for assistance, and what this might mean for the profitability of this type of cover. 10
Who can use the research? 1. Insurance underwriters: underwriters with an interest in card protection insurance in Europe will be able to arrive at a detailed understanding of the dynamics of this under-researched market which can be used when planning strategy or negotiating new distribution partnerships; 2. Insurance administrators and brokers: specialised insurance administrators and brokers play a fundamental role in the development of card protection insurance policies in all six countries researched; 3. Banks and other card issuers: enhancing revenues from cardholders through associated insurance policies such as card protection insurance is likely to be of increasing importance in future as other card-related revenue streams remain under pressure; 4. Management consultancies: are you helping a provider or distributor of card protection insurance to improve its performance in this sector in France, Germany, Italy, Poland, Spain or the UK? If so, this research will provide you with unique insights into consumer behaviour in these markets. 11
What are some of the key findings? 1) In Country X, insurance penetration rates are significant higher among respondents with both debit and credit cards Debit card(s) only 16.1% 13.5% Credit card(s) only Debit and credit card(s) 19.0% No additional cost 23.1% 20.0% Paid for separately 28.5% Average 17.9% 17.4% 0% 10% 20% 30% 40% 50% 60% Note the identity of Country X is revealed in the overview and relevant country-specific report Source: Finaccord Card Protection Metrics survey 12
What are some of the key findings? (cont.) 2) In Country Y, there are several viable distribution systems for selling card protection insurance Insurance company - direct Credit card issuer Debit card issuer Face-toface Online Inbound telephone Note the identity of Country Y is revealed in the overview and relevant country-specific report Source: Finaccord Card Protection Metrics survey Outbound telephone 13 Post
What are some of the key findings? (cont.) 3) The implied annual ratio of usage to make a claim or call for assistance to policies in force in Country Z is 0.215 Yes on one occasion, 12.0% Yes on two occasions, 2.3% Yes on three or more occasions, 1.4% No, 84.3% Note - the identity of Country Z is revealed in the overview and relevant country-specific report Source: Finaccord Card Protection Metrics survey 14
What are some of the key findings? (cont.) Key findings from executive summaries in this series include the following: averaged across all six countries, 89.3% of respondents stated that they held a debit or credit card (or more than one of either) among whom 11.3% were reportedly covered by card protection insurance that they were paying for separately and 18.1% by card protection cover that they had acquired at no additional cost giving an overall take-up rate of 29.4%; an average of 47.3% of insured respondents stated that their policy covered one card only, 13.5% that it covered all cards in their possession and 39.2% that it also covered the debit or credit cards of other family members living at the same address; respondents in France were by far the most likely to have acquired their policy in a face-to-face setting while respondents in Germany, Italy and the UK were much more likely to report that they had purchased their policy online; with regards to the degree to which respondents reported having made use of their card protection insurance to make a claim or to call for assistance on at least one occasion, those in Italy displayed the highest utilisation rate, followed by those in Spain and France. 15
What is the cost and format? All of the reports in the Card Protection Metrics series are available as standard PDF documents and Excel data annexes. Costs for the various titles in the series and for three related multi-country market reports are as shown below. REPORT COST * Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Europe Card Protection Metrics: Consumer Approaches to Card Protection Insurance in France Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Germany Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Italy Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Poland Card Protection Metrics: Consumer Approaches to Card Protection Insurance in Spain Card Protection Metrics: Consumer Approaches to Card Protection Insurance in the UK Insurance and Assistance linked to Payment Cards and Bank Accounts in Major Global Markets Insurance and Assistance linked to Payment Cards and Bank Accounts in Northern, Central and Eastern Europe Insurance and Assistance linked to Payment Cards and Bank Accounts in Southern and Western Europe GBP 2,495 GBP 595 GBP 595 GBP 595 GBP 595 GBP 595 GBP 595 GBP 3,995 GBP 2,495 GBP 2,495 * VAT at the prevailing rate will be added to the basic price for UK-based buyers except for where the request is for hard copy only. Costs quoted are for a single office, single country licence only. For corporate user licence options, please see the next slide for further details. Invoices can be paid in EUR or USD, at the prevailing exchange rate, if preferred. 16
How can the research be purchased? Simple. Just go to the relevant area of the Finaccord web site available at www.finaccord.com/order_eu_cfsr_cpm.htm and fill in the online order form, clearly indicating: report required type of corporate user licence, if required * billing name address and e-mail address purchase order number, if applicable Please allow up to one working day for the delivery of electronic copy by e-mail. * For the corporate user licence please choose one of the following options: 1. One office, one country: no supplement over and above basic cost of reports ordered 2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered 3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered 4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers. 17